Welcome to the conference call hosted by Daré Bioscience to review the Company's Financial Results for the Year Ended December 31, 2020, and to provide a general business update. This call is being recorded. My name is Sarah, and I will be your operator today. With us today are Sabrina Martucci Johnson, Daré's President and Chief Executive Officer; John Fair, Daré's Chief Strategy Officer; and Lisa Walters-Hoffert, Daré's Chief Financial Officer. Ms. Johnson, please proceed.

Thank you. Good afternoon and welcome to our 2020 financial results and business update call for Daré Bioscience.

Thank you, Sabrina. We're entering an exciting time for DARE-BV1 as the NDA submission will move us one step closer to the introduction of this important new product for the treatment of bacterial vaginosis. We continue to be impressed with the level of interest in the product candidate as we are seeing broad activity from large strategic pharmaceutical manufacturers as well as emerging specialty healthcare companies interested in adding a new and differentiated product to their portfolio. As we've communicated in the past, we look forward to announcing our commercialization strategy for DARE-BV1 following the execution of a definitive agreement. However, because we're often asked about timing, I wanted to start by providing some context on our process. I can reiterate that we believe it's in our best interests to continue to advance our partnering discussions in parallel with our regulatory discussions which we believe reduces risk and adds value to the DARE-BV1 program. We have the flexibility to work in parallel because of the clinician awareness of bacterial vaginosis and the straightforward product profile of DARE-BV1, which mitigates some of the traditional market softening efforts required with a new therapeutic indication. We believe we are positioned to execute a definitive commercialization agreement before the end of the year. As we think broadly about our commercialization strategies, we also have considerable optionality on what type of commercialization partnership structure we can contemplate. The fact that we have a portfolio of multiple women's health products in development means that all forms of structures are viable from direct involvement in commercialization to a collaboration with a contract sales organization to a complete commercial out license, similar to the deal we executed with Bayer for Ovaprene where Bayer has complete responsibility for commercialization. Being able to play a role in the commercialization of DARE-BV1 is much more tenable for us today than it was 18 months ago. The reasons for that are driven by the appreciable reduction in the size and scale of a field force that we believe would be required to reach the target number of healthcare providers to make the brand successful. With the implementation of remote and virtual provider detailing, driven almost entirely by the COVID-19 pandemic, organizations like ours can achieve a much greater efficiency and scale more quickly, with fewer full-time resources and reduced expenses. Doctors have adjusted their workflow to accommodate virtual visits with sales representatives, and we believe this will continue even after the pandemic is over. All of this taken together provides us greater optionality to select the commercialization partnership structure that we believe is best suited for DARE-BV1 for patients and for our shareholders. In summary, given the data from the DARE-BV3 Phase 3 study and the compelling value proposition of DARE-BV1, all options are on the table. Turning briefly to Ovaprene. I want to reiterate some of the comments Sabrina made about the Bayer partnership; we believe our relationship with Bayer continues to be value-additive for both companies. Our two organizations are operating synergistically across a number of key workstreams, ranging from manufacturing regulatory affairs, medical affairs, and brand planning, which includes pre-commercialization planning. We anticipate that this collaboration will only grow stronger in the coming months, as we plan to coordinate our efforts both internally and externally in preparation for the filing of the IDE later this year and enrollment of the pivotal clinical trial in 2022. Finally, I wanted to say a few words about the strength of the Daré brand in the broader women's health ecosystem. We have been and will continue to be active on a number of fronts to seek to continue to drive value into and through our pipeline. What's new about that for this year is that Daré, the Daré brand has been elevated, and our success both on the development side and the partnering side has translated into real interest from a variety of stakeholders to help us continue to develop and deliver new and differentiated products into the category. So we are really excited to embark on what we think is the next growth phase for Daré and look forward to keeping you updated as collaboration, exploration and discussions advance. With that I will turn the call over to Lisa.

Thank you, John. And thank you all for joining us today. I share Sabrina and John's excitement, and I'm grateful to our entire team for their incredible efforts over the past year. I would now like to summarize Daré's financial results for the year ended December 31, 2020. Daré's business model is to assemble, advance and monetize a portfolio of novel product candidates in women's health. As a result, our expenses consist of corporate overhead, portfolio acquisition and maintenance costs, and research and development activities to generate the clinical and other data necessary to advance our candidates through regulatory milestones, including approval. For the year ended December 31, 2020, Daré's general and administrative expenses were approximately $6.5 million; licensed expenses were approximately $83,000; and research and development (R&D) expenses were approximately $20.8 million. In addition to personnel costs of our R&D team, this year's R&D expenses primarily reflect the costs of the DARE-BV3 Phase 3 study, activities related to Ovaprene, and preclinical development activities for DARE-LARC1. As you know, the DARE-LARC1 program is supported by our grant from the Bill and Melinda Gates Foundation. Our comprehensive loss for the year was approximately $27.4 million. During the year, net cash proceeds from financing activities were approximately $25.1 million and represented sales of stock, the exercise of warrants, and loan proceeds. Total cash received during the year 2020 was approximately $29.5 million, reflecting the financing activities I just described, as well as cash from grants, a license fee payment, and the Australian R&D incentive cash rebate. We ended the year with approximately $4.7 million in cash and cash equivalents. Following year end, between January 1 and March 29, 2021, Daré received additional cash of approximately $11.5 million, consisting of approximately $11.3 million net of fees from sales of common stock under our ATM program in equity line facility, approximately $50,000 from warrant exercises and approximately $139,000 from program funding. Following these activities, as of yesterday, March 29, shares of common stock outstanding were approximately 47.3 million. In late January, Daré's public float exceeded $75 million, meaning that we could use our existing form S3 shelf registration statement without being subject to the restrictions imposed by the SEC. A public float that exceeds $75 million adds tremendous flexibility and could enable us to explore a variety of financing options that were not available to us in 2019 or 2020. We intend to file the new form S3 shelf registration statement with the SEC that will replace our existing shelf registration and which, once effective, can be used over the next three years, allowing us to explore different financing options over time. As we have done in the past, we will attempt to do so in a manner that protects and enhances shareholder value. In addition to my comments, there are a few agreements, commitments, and arrangements worth highlighting given that they should collectively serve to reduce our costs of development during the coming year 2021 and help us manage our cash resources efficiently. First, grants; grants have been an attractive source of non-dilutive funding for Daré, and we recognize grant funding in our statement of operations as an offset to research and development expenses. During 2020, we recognized $3.7 million of grant funding as an offset to our R&D expenses related to Ovaprene, DARE-LARC1, and DARE-FRT1. To date, we have received grant money from the Eunice Kennedy Shriver National Institute of Child Health and Human Development and the Bill and Melinda Gates Foundation. We will continue to use our existing grants for allowable expenses, and we intend to continue to explore and apply for additional grant funding in the future. Second, the terms of our agreements help decisions in provide for commitments of certain staff resources as well as expense rate reductions for development activities related to our programs. These arrangements are expected to provide additional time and cost efficiencies in 2021 as well. Finally, as Sabrina mentioned, under Australia's research and development tax incentive program, we received approximately $192,000 in cash during 2020, and during the first quarter of 2021, we applied for a refundable cash credit of $268,000 based on the eligible expenses incurred in connection with our DARE-HRT1 based on a clinical study. Currently, the program allows for eligible companies to receive up to 43.5% of their eligible R&D expenses. We will continue to explore a variety of ways to raise capital to advance our product candidates and to satisfy our working capital needs. Since inception, we have raised cash through the sale of our equity, for M&A transactions, warrant and option exercises, non-dilutive grants, and license fees. We will endeavor to be creative and opportunistic in seeking the capital we need to build value as we advance our candidates and to be highly efficient in the use of such capital. A word about COVID-19. We are continuing to monitor the pandemic and its potential impact on many aspects of our business. Due to the many uncertainties surrounding the pandemic, including vaccination rates and efficacy rates and governmental responses, we are unable to predict with any reasonable accuracy the full financial and business impact on our company at this time. We encourage investors to review the more detailed discussion of our financials and financial condition, our liquidity and capital resources, and our risk factors which will be filed in the 10-K with the SEC. Now, as you know, we typically file our 10-K about a half an hour before our earnings call, but as luck would have it today, the SEC website was down. So keep an eye out and we will file that 10-K as soon as we can. I would now like to turn the call over to the operator for Q&A.

Thank you for attending the conference call. Our first question comes from the line of Zegbeh Jallah with ROTH Capital Partners.

Hi, guys, thanks for all the updates. A lot of different programs are ongoing, so it's really nice to kind of know what the update is on each of them. So just starting with the first one year for DARE-BV1, I was just kind of curious, if you were not to get the priority review, would we expect an approval, say in March?

Yes, great. And this is Sabrina. So great question. Yes, the priority review allows a six-month review from the day you file because this is a 505(b)(2) pathway. So from the day we file, if it's not priority review, then yes, you would expect the PDUFA to be towards the end of the first quarter.

Perfect. Thanks Sabrina. And then in terms of the partnership, I know John mentioned that a lot of the positives of being able to do remote and virtual as well as a really established market love the products. You guys can be more involved. And so, I was just wondering, in terms of kind of boosting your cash balance, are you going to prioritize upfront cash, or is that not a priority? We're just looking for someone that can really handle the launch?

That is really an exceptional question. And so let me try to articulate how we look at it. We really are looking at what is the best partnership for this asset, right? What is the best partnership that is going to maximize the accretive potential to Daré, to our shareholders, and access to women? Because that is the beginning and the end of what matters and what gets you there, right? So what is that best partnership structure? And there are a number of things we're looking to balance in that equation. So we're looking for who is best positioned to commercialize it successfully to the target clinicians, who is best positioned to deliver that message, and who is best positioned to give the product the attention that it deserves in order to achieve its value and success. And how does our big-picture, Daré objectives beyond DARE-BV1 fit into that? And so I think what you saw with Ovaprene should give you a sense of how we think about this. We take each asset on its own merits. So as we talked about today with Ovaprene, we felt that it was absolutely critical to that program to have the only company that has, in recent days, built a brand new contraceptive category, successfully launched into that category and created a billion-dollar brand as the partner. And so we didn't feel with that program that it made sense for us to have any involvement; it was the right thing to do to hand it off to Bayer. As we think about DARE-BV1, for all the reasons I and John communicated on this call, this particular program for a lot of reasons gives us a lot more optionality in how we think about partnerships, and how we think about that trade-off that you mentioned. Just like Ovaprene, there was a trade-off: do you take a lot of money upfront? Or do you take more on the back end? And who's going to make the product as big as it can possibly be? And who do you want by your side to do that? So just like we did with Ovaprene, we will look at all the possibilities and, as with Ovaprene, we are very fortunate to be advancing programs that people are excited about; that the partnership landscape is excited about, and that gives us optionality. I know I did not directly answer your question, but hopefully, I gave you enough perspective that we are absolutely weighing all of that. We're weighing the value of the near-term dollars that could come in under certain deal structures towards less on the front end versus the pros and cons of us having some ability to play a role in this process and how all of that also translates into cash flows. And just like we talked about with the Bayer deal, where partnerships are also our way of funding non-dilutively, how that translates into all of that as well. So stay posted. As John mentioned, we will definitely keep people updated, and hopefully you got some clarity today that as these discussions are progressing and our regulatory process towards that NDA is progressing, we're finding it definitely is in our best interest to keep the conversations going in parallel and not to rush the process so that we get the best outcome for our shareholders.

Thanks Sabrina. And then regarding Ovaprene, thanks for the color on some of that pre-commercial activities that are kind of underway. It was just curious as to what might be driving the timing of the IDE, what has been happening, just some additional clarity on that. And I think I just had another quick one here as well, in terms of the timing of the next milestone payment, because you said that could be helpful for even supporting the evolution of the rest of your pipeline as well.

Two additional important questions. Regarding the IDE process, for those who have followed Daré for some time, you may recall that we aimed to accelerate Ovaprene's progress right before the COVID pandemic hit in early 2020. We intended to expedite the Ovaprene program, but due to the pandemic and the specifics of the regulatory pathway, which falls under the CDRH and PMA categories, we encountered some delays. This pathway offers opportunities for extensive pre-submission meetings with the FDA, which we didn't have with other processes. Additionally, we were always aware of the necessary manufacturing and non-clinical work that needed to be done. Given these circumstances, we adjusted our timeline while still aiming for some data in 2022, which was one of our and Bayer's goals as we approached the regulatory phase. During this time, we've focused on the required non-clinical studies for any regulatory assessment and engaged in manufacturing activities. We spent more time preparing for the pivotal studies, especially since we preferred not to initiate this trial during the pandemic, due to the complexities of conducting contraceptive studies in this environment. Our close collaborators at NIH, who had previously funded the pre-pivotal study, indicated they had paused several of their own studies. Consequently, we shifted our focus. This is what has influenced our timeline, with an aim to submit the filing at the end of this year. Regarding the readout in 2022 and its connection to Bayer's milestone payment of $20 million for the pivotal study, as I noted previously, we need to finalize discussions with the FDA before we can confirm the duration of these pivotal studies—whether they will take 6 months or 12 months and what specific data will be required. Generally, hormone-free devices have a 6-month period while monthly vaginal contraceptive products typically require 12 months. From our knowledge of contraceptive products, clinical outcomes at 6 months serve as good indicators for what to expect at 12 months; there won’t be a decline in contraceptive rates between these periods. We have ensured that whatever the submitted package to the FDA ultimately looks like, if we start the study next year, we will be positioned to report 6-month contraceptive data by the end of 2022. However, whether this will trigger the milestone payment depends on the specifics of the required pivotal study, whether it spans 6 or 12 months, as that payment is contingent on a defined timeframe. We haven’t released all the details as some are redacted due to confidentiality in our SEC filing regarding the contract, but it is payable following the study’s completion within a specific timeframe. If the 6-month contraceptive outcomes do not conclude in 2022 but extend into 2023, then that will determine the timing of the payment.

Thanks for the additional detail, Sabrina. And then, just one last for me. As for your HRT1, just wanted to get some more details on what you are hoping to see from the data. How should we interpret the data when it does come out? And then perhaps maybe even put it in the context of how the readout could put you in a good position for the subsequent next step?

Yes. And then I will let you move on to the next question in the queue after this one; you've had awesome questions. So I’m excited to get to answer these. On HRT1, to your point, so the data is going to come in the second quarter, and it's Phase 1, right? So we're really looking at PK data; we're looking at drug release data over this 28-day period and to see that we've met our objectives. As you may recall, this work has already been done in sheep. Sheep are a great model for vaginal ring technologies because you can use full form factor for human vaginal ring in the sheep. So we've already demonstrated this in sheep. This is an opportunity to do this now in women, obviously, importantly, and also to similar to what was done in sheep, see if there are any adverse vaginal effects that are unexpected. So those are really what we're going to look for: confirmation of that same nice PK data that we saw on the sheep, and we're going to look for both of the two actives that progesterone and estradiol. We're also going to look at those, any vaginal effects. And in terms of why it's also interesting for the FRT1 program, which is the progesterone program, where we have NIH funding of up to $2.3 million to support the Phase 1, is because it's the same progesterone, and we are looking in the HRT at some of the same doses, not all the doses, but some of the same doses that we would consider for the progesterone rings. So it's actually kind of a nice, early peek at what those PK data might look like. So it also helps us plan for that Phase 1, where we're collaborating with the NIH for FRT1. And then, obviously, the next step would be for the HRT1 program to progress into Phase 2, which once we have the Phase 1 data, we can decide how we want to proceed with that program.

Our next question comes from the line of Jason McCarthy with Maxim Group.

Hi, this is Joanne Lee on the call for Jason McCarthy. Thanks for taking the questions and congratulations on your progress in the quarter. For my first question, I guess it's regarding DARE-BV1. We all saw the great data you put on the fourth quarter for the BV1 asset, which was in line with the previous results announced earlier in the study. I understand NDA submission is planned for Q2. I was just wondering if there have been any recent discussions with the FDA and what were some of the responses you heard? Or if not, do you plan on having a sort of a pre-NDA meeting with the FDA? We're obviously looking forward to the submission and announcement of the PDUFA date?

Yes, absolutely. So we had guided previously, and thanks for the reminder because I'd neglected to mention in today's call and I probably should have. We had guided previously that we would definitely have pre-NDA discussions with the FDA. Hopefully you've gathered even some from Ovaprene comments that we like to take advantage of opportunities to engage with the FDA. We've done it a lot on our Ovaprene program, Sildenafil program and absolutely similarly on DARE-BV1. We find those pre-NDA discussions. Well, any of the meetings that we have with the FDA, but pre-NDA discussions are obviously a really helpful way to do everything a sponsor can to mitigate risk with your submission, right? To make sure that anything that you have questions about, you have an opportunity to ask them. Then, you can take the FDA's guidance and suggestions and advice into consideration as you prepare the NDA. So, yes, that is something that we do as a company, and we never disclose the exact timing of those events and exactly where we are in that process. But absolutely pre-NDA communication with the FDA is a critical and important part of our NDA filing strategy.

Great. That was helpful. Thank you. So there have been a lot of exciting activities surrounding the BV1 asset but I sort of shifting focus to the FSAD program, it was nice to hear that the Phase 2b study initiated earlier this year; assuming the results at the end of this year are positive. Could you briefly just walk us through what are some of the future steps for the company following completion of this current study to get the Sildenafil cream onto the market?

Thank you for your question about that product. I find that "excited" is a useful word to describe our feelings about it. We have been looking forward to starting the study. This was something we had hoped to launch last year, but we felt that the uncertainties at that time were not conducive to starting the trial. We were eager to move forward with this study because it addresses a significant unmet need. We achieved alignment with the FDA on the primary endpoint, which we announced at the end of 2019. This is definitely a project we were eager to get underway. For those who were following at the time, part of our agreement with the FDA regarding the Phase 2b design and endpoint was to begin laying the groundwork for understanding what the entire program, including Phase 3, would look like and what the expectations would be. The FDA's guidance document from 2016 leaves much open for discussion between the sponsor and the FDA. For the Phase 2b study, we designed it to use the primary endpoint identified in our content validity work as the most suitable one for Phase 3. Additionally, part of the agreement with the FDA included incorporating several exploratory secondary endpoints that were also promising according to our content validity work. A key element of the Phase 2b study is selecting the appropriate endpoint, which could be the one we chose as primary or perhaps a different one for the Phase 3 program. This consideration is critical in the Phase 2b process. Regarding the Phase 3 study, the current FDA guidance specifies a 24-week duration, compared to the 12 weeks for Phase 2b. It remains uncertain if this will be standard for female sexual arousal disorder, as it was designed primarily for hypoactive desire disorder, a CNS condition. This topic will certainly be up for discussion. Currently, the guidance states a 24-week study for Phase 3, and we have already communicated with the FDA that two Phase 3 trials will be necessary. Although this is a 505(b)(2) program leveraging the safety of oral Sildenafil for men, this involves vaginal administration. If the Phase 2b is successful, the next step would be to conduct an end-of-Phase 2 meeting with the FDA to align on the Phase 3 strategy and proceed from there.

Okay. Thank you so much for those details and, again, for taking the question. We're really excited to hear any additional updates in the coming quarter.

Thank you. There are no further questions. I will now turn the call back to Ms. Sabrina Martucci Johnson for closing remarks.

Well, thank you all for taking the time this afternoon to hear our update and all the great questions and then our chance to share everything that transpired during 2021 in spite of the pandemic and our commitment to our company goals of improving options and outcomes for women and driving value for all of our Daré stakeholders under any operating environment. So we are grateful to our exemplary team, as Lisa mentioned, and shareholder support, thankfully, that made our 2020 achievements possible. As we look ahead, our 2021 plans demonstrate a feature of our business model that is core to its value-driving potential. Doug and his questions kind of touched on that which is namely the variety of our programs and the diversity of our women's health indications and the development stages of our programs. That really enables us to direct our resources and investment across the portfolio in ways that can advance the programs against numerous milestones simultaneously in a time and capital-efficient manner. We've demonstrated that even in a challenging environment and we look forward to keeping you updated on our progress against the key 2021 objectives that we discussed today across five of our different clinical stage programs and indications this year. So thank you so much for your time today.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.