binarypublish- Evofem Biosciences, the San Diego-based women’s health startup, has agreed to sell itself to biotech firm Aditxt for $100 million. Adixt will also assume some of Evofem’s debt.
- Evofem’s main product, a contraceptive gel named Phexxi, faced major barriers when insurance companies refused to cover the cost, despite a federal law requiring them to do so.
- The sale comes as Evofem’s CEO, Saundra Pelletier, has struggled to keep her company afloat. Despite nearly $13.4 million in sales of Phexxi in the first nine months of 2023, the company ended that period with only $400,000 in cash and cash equivalents.
- Adixt’s CEO, Amro Albanna, intends to have Pelletier continue running Evofem under its roof, indicating that the purchase will become the core of a new women’s health unit for Aditxt.
Evofem Biosciences had initially launched Phexxi with much anticipation in 2020, aiming to bring an innovative contraceptive to the 47 million U.S. women using birth control. However, due to insurance companies largely refusing to cover the cost of Phexxi and other new contraceptives, smaller pharmaceutical companies like Evofem found it increasingly difficult to recover the substantial investments they made in developing these products.
The adverse insurance landscape, combined with some internal decisions, had a detrimental impact on Evofem’s financial health and questioning its survival as a standalone unit. Furthermore, Evofem’s aggressive marketing strategies were scrutinized by the U.S. Food and Drug Administration, which accused the company of exaggerating the benefits and effectiveness of Phexxi. The company was delisted from Nasdaq in 2022 due to its crumbling finances majorly caused by the insurance-related sales issues, after which Pelletier had been seeking a buyer for Evofem since February.
The refusal of large health insurance companies to pay for newer, often more costly types of contraception, despite existing federal laws, has become a growing concern. This issue especially affects small pharmaceutical companies striving to innovate in this market. With an increasing restriction on abortion and a higher need for access to contraception for women’s reproductive health, the federal government has been urged to take action against these widespread insurance problems.
While Evofem could secure better coverage from insurers following President Joe Biden’s executive order, many contraception startups are still awaiting more government intervention.
