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Why TherapeuticsMD Inc Is Skyrocketing Today

What happened

After TherapeuticsMD (NYSEMKT: TXMD) announced that it plans to resubmit TX-004HR to the Food and Drug Administration for review, shares of the small-cap biotech focused on women's health shot up, gaining 44% as of 11:20 a.m. EST on Monday.

So what

TherapeuticsMD's management team held an in-person meeting with the FDA on Friday, Nov. 3, to discuss the resubmission process for TX-004HR. The drug, also called Yuvvexy, is a possible treatment for dyspareunia, or moderate-to-severe vaginal pain during sexual intercourse.

The company had previously received a complete response letter -- which is the FDA's equivalent of a rejection letter -- for TX-004HR because its application lacked long-term safety data. Investors worried that the resubmission process was going to be lengthy and expensive.

However, the company stated today that the FDA has agreed to accept TX-004HR's resubmission without the need to run any additional pre-approval studies. 

Given the update, management stated that it will move forward with the resubmission process "within the coming weeks." If everything works out, the drug should be approved within two to six months afterward.  

If that wasn't exciting enough, TherapeuticsMD also reported third-quarter results today. While the quarterly numbers themselves were fine -- net loss for the quarter was $14.7 million, and the company ended September with $148.3 million in cash and no debt thanks to a recent equity offering --  management also revealed that it plans to send TX-001HR to the FDA for review in December. TX-001HR is under study as a possible treatment for moderate-to-severe vasomotor symptoms in postmenopausal women.

Given the positive regulatory updates, it isn't hard to understand why traders are cheering today.

Image source: Getty Images.

Now what

TX-004HR looks like a layup approval at this point, and one would hope that the painful lessons learned over the last year will be applied to the TX-001HR submission. That should give it a decent chance of winning approval, too.

All in all, the future is finally looking bright for this company's long-suffering bulls. While there are still plenty of hurdles to overcome ahead -- convincing providers to actually use new drugs, and insurers to cover them, is always a huge challenge -- I certainly agree with traders that today is an exciting day. 

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Brian Feroldi has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.