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The Female Health Company (NASDAQ: “FHCO”)

The Female Health Company (NASDAQ: “FHCO”). The Female Health Company. The Female Health Company (FHCO) owns certain world-wide rights to the Female Condom (FC1 and FC2). The Female Condom gives a woman control of her sexual health by providing dual protection from:

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The Female Health Company (NASDAQ: “FHCO”)

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  1. The Female Health Company(NASDAQ: “FHCO”)

  2. The Female Health Company The Female Health Company (FHCO) owns certain world-wide rights to the Female Condom (FC1 and FC2). The Female Condom gives a woman control of her sexual health by providing dual protection from: Contracting sexually transmitted infections (STI’s) including HIV/AIDS, and Unintended pregnancy

  3. The Female Condom’s Significance Condoms, male and female, are theONLYmeans of preventing HIV/AIDS transmission via sexual intercourse. No other alternatives on the horizon for years Four microbicide products failed in clinical study trials Merck Lab’s leading HIV/AIDS vaccine candidate failed. Reflects extraordinary scientific challenges involved

  4. Does the Female Condom Compete with Male Condoms? • No. The Female Condom is an alternative to either using a male condom or to having unprotected sex. • Availability of the FC as an option to male condoms or using nothing results in an increase in protected sex acts and a reduction of the incidence of STI’s.

  5. Why Use the Female Condom? • Women can have more control over their sexual health • User-friendly • No interruption factor, product may be inserted prior to sexual activity • Non-allergenic versus latex condoms • Unlike latex, is usable with either water or oil-based lubricants • Not tight or constricting, males often prefer the female condom over the male condom

  6. Primary use of the Female Condom • STI prevention, especially HIV/AIDS

  7. Female Condoms’ Major Market With STI prevention being the product’s primary use, FHCO’s main market is currently the Public Sector. The Public Sector is the market in which various organizations supply critical products for distribution, at low cost or no cost, to those who need but cannot afford to buy such products themselves.

  8. Who are Public Sector Buyers? • The Public Sector includes • Large international agencies such as • UNFPA (UN Population Fund), • USAID (United States Agency for Int’l. Development), • PSI • Governmental Ministries of Health, • State and local health agencies, and • NGO’s (non-governmental organizations).

  9. Global Condom Market Male condom market (public & private) estimated at $3 billion annually(1) Latex male condom market is 13-14 billion units annually(2) Public sector male condom market is 11 billion units annually(3) Annual condom (Male & Female) market, for HIV/AIDS prevention only, will grow to 19 billion units by 2015(4) Source: (1) Goldman, Sachs (2) ISO(3) UNAIDS (4) UNAIDS

  10. Our Customers Female Condoms now available in over 100 countries Public sector agencies distribute in more than 90 countries (>90% of sales) Sold directly to consumer in 15 countries THE FEMALE HEALTH COMPANY

  11. Global Distribution of HIV/AIDS Cases by Gender

  12. Funding for HIV/AIDS Prevention & Treatment • New PEPFAR act signed July, 2008 increasing HIV/AIDS prevention and treatment funds to nearly $48 B over five years, requirement to promote abstinence eliminated • British Department for International Development (DFID) will spend $12 B over seven years to improve health systems and services in developing countries to fight HIV/AIDS • Global Fund issues grants totaling $1.1 B over two years for HIV treatment and prevention

  13. US Market • The Center for Disease Control (CDC) reports that per its most recent statistics, HIV infection was: • The #1 cause of death for African American women aged 25-34 years; • The #3 cause of death for African American women aged 35-44 years; • The #4 cause of death for African American women aged 45-54 years; • The #4 cause of death for Hispanic women aged 35-44 • In March, 2008, CDC announced that a study showed that 26% of US female adolescents have at least one STD (other than HIV/AIDS) annually. Amongst young Black females, the rate is over 40%.

  14. FY2008 – INCREASE OF 34% OR 8.8M UNITS UNIT SALES IN THOUSANDS

  15. FY2008 – 33% OR $6.3M GROWTH IN NET REVENUE NET REVENUES IN THOUSANDS

  16. FY2008 – 193% OR $3.3M INCREASE in “bottom line”, (including $1M in FX gain) NET INCOME (LOSS) IN THOUSANDS

  17. FY2009 - Nine Months’ Year-to-Date Highlights • Gross Margin widens to 49% of net revenue vs. 41% in nine months of fiscal year 2008 • Operating income up 114% • Operating margin widens to 21% of revenues vs. 11% in nine months of FY2008 • E.P.S. rise 70% to $0.15 vs. $0.09 in nine months of FY 2008 • Generates $6 million cash from operations

  18. Highlights – Q3, 2009 275% Operating Profit Increase to $1.5 Million Gross Profit Margin widens to 48% of net revenues vs. 39% in prior year quarter 54% Gross Profit Increase

  19. Recent Events • FDA approval of FC2 on March 10, 2009 • FHCO announces plan to Expand Manufacturing Capacity for FC2 Female Condom by 150% • FHCO named to Crain’s Chicago Business “Fast Fifty” list of the area’s fastest-growing companies. • FHCO moves to NASDAQ in June, 2009 • FHCO named to Russell 2000 in June, 2009 • FHCO named #8 in Fortune Small Business’ Top 100 Fastest Growing Small Companies – July, 2009 • FHCO receives USAID-funded order for 12 M units of FC2

  20. Impact of FC2 FDA Approval on FHCO • Customers requiring FDA approved products (US market, USAID, RSA), can transition to lower-price, higher margin FC2 • Consumer market opportunities in US and other countries (lower price product can be marketed and sold at an affordable price at a reasonable profit) • Increased volume – increase margins/profitability • 100% shift to FC2 by 12/31/09

  21. Advantages of FHCO Business Model Modest inventory level, production primarily against orders Low sales and marketing expense Infrastructure stable in growth mode No Debt Limited Foreign Exchange Rate Risk Low Credit Risk

  22. Condensed Balance Sheet June 30, 2009 ($000) Other: UK Net Operating Loss carryforward of approx. $66 M Federal Net Operating Loss carryfowards $42 MIL State Net Operating Loss carryfowards $22 MIL

  23. FHCO Near-Term Growth Opportunities • Proprietary Products - Lack of Direct Competition • More Profitable 2nd Generation Product (FC-2) • Increased Global Demand • Countries with established prevention programs - Brazil • Countries with High HIV/AIDS incidence - Sub-Saharan Africa, e.g. South Africa, Zimbabwe • Countries with expanding prevention programs - India

  24. Experienced Management Team • International • Financial • Manufacturing • Marketing • Regulatory • Research • OB Parrish- Chairman/ CEO • Pfizer - Executive V. P. of International Division • G.D. Searle – President of Global Pharmaceuticals • Donna Felch- VP/ CFO • LyphoMed/ Fujisawa /American Pharmaceutical Partners • Mike Pope- VP Global Operations • Chartex/ Franklin Medical/ Warner Surgical Products

  25. Outlook • Growing need for HIV/AIDS prevention for women driving increase in Global Demand • Lack of HIV/AIDS Prevention Alternatives • Increased Prevention Funding • Increasing Profitability • FC2’s FDA approval presents new consumer market opportunity

  26. Investment Data

  27. The Female Health CompanyQUESTIONS???

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