Shortly after Evofem picked up FDA approval for its contraceptive gel Phexxi back in 2020, the company touted the product as the "first contraceptive innovation in decades" and one that offered a new solution to a "significant unmet need."
But more than three years into the launch, the company has decided to sell itself for pennies on the dollar.
Tuesday, Evofem agreed to sell itself to Richmond-based biotech Aditxt for around $100 million, the companies said in a joint release.
Under the deal structure, Aditxt has assumed Evofem's senior secured debt and will pay $5 million to Evofem's senior debtholder by the end of the year. Aditxt will also pay $8 million more to Evofem's senior debtholder by next September and up to another $5 million after that payment.
Further, Evofem's shareholders will exchange their 10.7 million-plus shares for a total of 610,000 shares of Aditxt's stock. Aditxt has also agreed to issue up to 89,126 new shares to investors and debtholders with certain interests in Evofem.
The boards of both companies have approved the deal proposal, and the agreement is expected to close in the first half of 2024, the companies said.
San Diego-based Evofem markets Phexxi, a contraceptive gel that made its market debut in 2020. In the first nine months of the year, the company generated $13.4 million.
The company's share price has crashed by more than 99% over the last few years, and shares were trading at around 13 cents on Tuesday.
In the third quarter, the company cut costs by slashing expenses across its operations, including in its sales force, R&D and administrative expenses.
After the proposed deal closes, Evofem will be a wholly owned subsidiary of Aditxt and will continue to be led by CEO Saundra Pelletier, plus its current management team, the companies said in the release.
The sale comes after Evofem in February launched a strategic review to weigh options that included a merger, asset sale or licensing.
More recently, the FDA in November accused the company of overstating the efficacy of its contraceptive gel. Specifically, the agency took issue with certain claims in a digital patient brochure.
Since the gel's approval in 2020, Perrigo has won FDA approval for an over-the-counter version of its birth control pill Opill, boosting access to contraception and ushering in a major change in the market.