After running up for pretty much the majority of the third quarter, and reaching fresh 2017 highs in and around $8 a piece on April 6, TherapeuticsMD Inc (NYSEMKT:TXMD) has collapsed across the last day or so to the tune of more than 23% from highs to current levels at circa $6.20. The decline comes on the back of an update from TherapeuticsMD related to its lead women’s health asset. We’ll take a look at exactly what the update said, and what it likely means going forward, shortly, but let’s kick things off with a statement: this may be an opportunity to pick up a discount exposure to what looks like a very promising asset.

So, here’s why.

The drug is called TX-004HR, and it’s designed to treat a condition called dyspareunia (in this instance, moderate to severe forms of the condition), which is vaginal pain during sexual intercourse. The actual condition dyspareunia is a symptom related to vulvar and vaginal atrophy, or what’s called VVA, in menopausal women.

The treatments used in this space right now are pretty inconvenient to use. They require applicators, or are oral administration pills (which are systemic, and by proxy, have side effects associated with them), and women just don’t like using them; the majority of women, that is. According to the data, there are more than 32 million women in the US right now experiencing symptoms of VVA, with a large portion of these (as many as 75-80% at best guess) suffering from dyspareunia specifically. There are around 130 million adult women in the US right now. That’s around one in four women suffering from VVA symptoms, and three out of four of these suffering from the condition TX-004HR targets.

One more statistic: only 7% of these women are currently on prescription therapy.

What all this simplifies to is the fact that there’s a massive market on offer here, and analysts have put forward estimates for TX-004HR peak sales in excess of $1 billion annually.

So what’s gone wrong?

Well, the company announced that the FDA has issued a letter related to the drug, and specifically, the NDA that’s currently under review. TherapeuticsMD submitted the NDA back last year, and the agency accepted it for review in September. At that point, a PDUFA data of May 7, 2017 was put in place.

Now, the agency has expressed some (seemingly very) vague concerns about the application, and it’s sent a letter to TherapeuticsMD to request clarification on said concerns. Here’s all we have to go on:

“(The FDA) has identified deficiencies that preclude discussion of labeling and postmarketing requirements/commitments at this time. “

The thing is here that this doesn’t look to be efficacy related, but it could be something to do with safety (labeling and post marketing studies generally are). That’s a concern, but for us, we think there’s value in taking a punt. Nobody really knows (outside of those involved, of course) what’s going on. What we do know is that this isn’t a CRL, and as things stand, the PDUFA is still in place.

This suggests that the FDA is offering TherapeuticsMD a chance to get the issues resolved before PDUFA, which in turn, suggests they aren’t too serious. Additionally, the data on which this application is based (from an efficacy perspective, at least) seems excellent. The drug hit against four separate endpoints, across three dose levels, with very high statistical significance.

Given the fact that this is a very underserved (as illustrated by the low pharmaceutical grade treatment rate mentioned above) population, and the potential impact an applicator-less alternative could have not just on the market, but for the women involved, it’s tough to see the FDA turning the drug down on a technicality.

Of course, this is development stage biotechnology, and nothing is in the bag before it gets a green light. Even then, there’s no guarantee a drug like this is going to hit on its forecasts. That said, investors are now presented with an option to pick up an exposure at a more than 20% discount to a drug that, just a week ago, was regarded as a shoo in for approval come PDUFA.

This is a knockback, in our eyes, but far from terminal for the program and, by proxy, for TherapeuticsMD and its shareholders.