Welcome to the conference call hosted by Daré Bioscience to review the company's Financial Results for the Year Ended December 31, 2022 and to provide a general business update. This call is being recorded. My name is Abby 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 Commercial Officer; and Lisa Walters-Hoffert, Daré's Chief Financial Officer. Ms. Johnson, please proceed.

Thank you. Good afternoon and welcome to our year-end December 31, 2022 financial results and business update call for Daré Bioscience. Our plan today is to review our full year results, discuss development since our last call in November and use the time to review our business strategy, including why we believe investment in women's health is efficient and disproportionately impactful, and to highlight some important objectives and milestones anticipated in 2023. Before we begin, I'd like to remind you that today's discussion will include forward-looking statements within the meaning of federal securities laws which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements made during this call that are not statements of historical facts should be considered forward-looking statements. Actual results or events could differ materially from those anticipated or implied by these statements due to known and unknown risks and uncertainties. You should not place undue reliance on forward-looking statements. Forward-looking statements are qualified in their entirety by the cautionary statements in the company's SEC filings, including our annual report on Form 10-K for the year ended December 31, 2022, which was filed today. I'd also like to point out that the content of this call includes time-sensitive information that is current only as of today, March 30, 2023. Daré undertakes no obligation to update any forward-looking statements to reflect new information or developments after this call, except as required by law. By the time 2022 came to a close, we had secured our second commercial collaboration for our FDA-approved product, XACIATO with Organon. We received FDA acceptance to commence what we believe will be the single pivotal study required for our monthly hormone-free contraceptive candidate, Ovaprene, the commercial rights to which are under a license agreement with Bayer. We announced that we completed enrollment in our Sildenafil Cream female sexual arousal disorder Phase IIb study, and we announced positive Phase I/II study top line readouts for our hormone-free vaginal atrophy treatment candidate, DARE-VVA1; and one for our 28-day vaginal ring hormone therapy candidate for the vasomotor symptoms in menopause, DARE-HRT1. These accomplishments in 2022 position us well to potentially achieve additional commercialization, clinical, and regulatory milestones in 2023, which I look forward to sharing shortly. And our 2023 milestones include not only objectives related to the programs I just identified but to other portfolio candidates as well. Those who have been following Daré know that we are focused solely and squarely on women's health. With 12 independent stand-alone development stage candidates in our portfolio, we have, to our knowledge, the deepest pipeline of women's health product candidates of any company, including global pharmaceutical companies. It has been reported that a mere 1% of health care research is invested in female-specific conditions beyond oncology. And yet, based on IQVIA data for 2013 to 2022, women's health products make up 27% of the blockbuster products, defined as those that generate over $500 million in annual sales. Given those statistics, we like our odds of generating value for our shareholders and the disproportionately impactful investment a women's health product candidate can potentially represent, particularly given that a number of our candidates are in the contraceptive, menopause, and sexual health categories, all of which have seen over $1 billion and even over $2 billion individual brand sales, including the potential of our sexual health program, Sildenafil Cream, since there is yet to be an FDA-approved product for arousal disorder in women, the most analogous condition in women to erectile dysfunction in men. Our belief that prioritizing women's health is not only good for women lacking effective or convenient therapeutic options, but also for the broad set of stakeholders, including family members and partners and importantly, those investing in the category. Our current innovation efforts are focused on contraception, vaginal health, reproductive health, menopause, sexual health, and fertility. We chose these areas because we saw opportunities to bring new innovation to women in indications where we could be first to market, have a first-in-category product, or develop the first-line product in a given therapeutic category. So while we have a broad portfolio, importantly, every single product candidate in our portfolio has to stand on its own merits to justify our investment in that individual product candidate. Specifically, before we select a new candidate for development, we determine that it meets strict criteria: first, the product candidate has to address a meaningful market opportunity in the form of a persistent unmet need; second, it has to have the potential to be first in line or first in category or both; third, it should already have demonstrated proof of concept and ideally use well-characterized active pharmaceutical ingredients which committed gate development time, cost, and even risk; and finally, it should represent an opportunity to deliver a clear improvement over the standard of care as measured by clinical outcomes and patient acceptability, ultimately evidenced by a clearly differentiated product label which is critical for market access and pull-through. Our focused efforts to deliver differentiated innovation in women's health have resulted in 12 development-stage programs across 9 distinct indications, with more than 5 milestone events anticipated in 2023 that we will discuss shortly, 3 candidates in or nearing Phase III development, 2 potentially transformative collaborations with leaders in women's health product commercialization, Bayer and Organon, and 1 FDA-approved product, XACIATO. I encourage you to read our press release issued this morning since it provides a more comprehensive review of our 2022 accomplishments. We have important upcoming milestones for XACIATO, Ovaprene, Sildenafil Cream, DARE-VVA1, DARE-HRT1, and DARE-DPM1. So I'm going to focus my comments today primarily on those programs. Let me begin by highlighting our global license agreement with Organon that supports the commercialization of XACIATO, clindamycin phosphate vaginal gel 2%. As a reminder, XACIATO is an antibacterial indicated for the treatment of bacterial vaginosis in female patients 12 years of age and older in the United States. The XACIATO story is great validation of our portfolio candidate selection and development strategy. Bacterial vaginosis is the most common vaginal condition in women of reproductive age, estimated to affect approximately 23 million women in the U.S. alone. Yet a number of women with the condition have been underserved by currently available products. We hoped that by focusing on improving outcomes and overall user experience, we could deliver a novel option. Understanding the differentiation drives value, we sought to design a Phase III study to generate the data necessary to support the target labeling and create the opportunity for a commercialization collaboration that could drive value. We are thrilled that Organon, the women's health-focused spin-off of Merck, is launching XACIATO and that they will leverage their established Nexplanon sales team to accelerate XACIATO uptake. Specifically, with the manufacturing validation activities required to support the commercial launch now nearly completed, we are excited about the commercial launch activities underway at Organon in preparation for what will be Organon's first pharmaceutical product launch in the women's health category since spinning out of Merck. Given that the Nexplanon sales team will be leveraged for the XACIATO launch, we expect to benefit from the track record of commercial success that team has demonstrated. Organon believes that there is roughly a 90% overlap of those healthcare providers who prescribe Nexplanon and our viable XACIATO targets based on treatment patterns. The strong relationships the sales team has with these providers are expected to enable immediate access. We anticipate the first commercial sale before the end of the second quarter, and I will provide more on the XACIATO commercial activity when John provides his update. Regarding our Ovaprene program, the FDA's acceptance of our Ovaprene IDE last year was an important milestone for the program, as it allows us to commence what we believe will be the single pivotal clinical study required to support the PMA submission for registration. Ovaprene is our investigative potential first-in-category hormone-free, monthly intravaginal contraceptive, whose commercial rights are under a license agreement with Bayer. We announced IDE approval for our planned pivotal study by the FDA in October 2022 and confirmed our belief that a single pivotal study of approximately 12 months duration will be sufficient to support a PMA submission to the FDA. The study will target having around 200 to 250 subjects complete 13 menstrual cycles of use. The pivotal study is being conducted under a collaborative research and development agreement, or CRADA, with the NIH's NICHD division and with NICHD's contraceptive clinical trial network. In December, NICHD brought the investigators from those sites together for an investigator meeting. We anticipate the initiation of pivotal Phase III subject recruitment in the middle of 2023. So that's 2 innovative brands, XACIATO and Ovaprene, and 2 potentially transformational collaborations, one with Organon and one with Bayer.

Thank you, Sabrina. As Sabrina outlined, we strive to develop differentiated first-line or first-in-category products. We believe this creates optionality for our commercialization strategy by allowing us to enter into commercialization agreements as we have with XACIATO and Ovaprene on a product-by-product basis, and in those circumstances, where we believe a collaborator with an established commercial capability in women's health is the most effective, efficient way to bring a Daré product to market and the optimum way to provide value to Daré stakeholders. Our model gives us the flexibility to work with top commercial companies in women's health for certain products, but also to directly engage in commercial activities for other Daré products when we believe it's the most appropriate strategy, given the target product profile and the stage of development within our portfolio. To date, we have entered into commercialization license agreements with what we believe to be our 2 top commercial companies in women's health. The value of having the breadth and experience of a women's health commercial market leader behind the brand is clear when we consider the XACIATO go-to-market strategy. We continue to remain excited about XACIATO's launch as we look forward to seeing XACIATO added to the healthcare providers' armamentarium. As Sabrina noted, Organon has been working on launch activities, taking a holistic approach to the product's introduction which will include direct selling, also known as personal promotion, as well as non-personal promotion efforts, utilizing key digital platforms as well as payer and healthcare provider channels. Organon has what we believe to be a truly integrated go-to-market plan targeting all the key stakeholders, which are healthcare providers, the payers, and the patients, in order to quickly drive interest and awareness in the brand. Importantly, we have reported previously that Organon's market access team has been meeting with health plans and PBMs to review XACIATO and obtain competitive coverage in the bacterial vaginosis category, which is critical to support patient access and product pull-through. Organon will leverage its established Nexplanon sales team to optimize XACIATO uptake at launch. They believe there's roughly a 90% overlap of those healthcare providers who are already prescribing Nexplanon and have the potential to be XACIATO prescribers. This strong relationship with the sales team and the provider relationships they have in place will enable access to these HCPs, coupled with Organon's payer outreach and planned patient-centered activities. We think that will position us well for in-market success, and we look forward to launching the brand by the end of the second quarter.

Thank you, John, and thanks, everyone, for joining us today. I'd now like to summarize Daré's financial results for the year ended December 31, 2022, which I will refer to as the current year or 2022. Daré's business model is comprised of 2 parts. The first is to assemble and advance a portfolio of differentiated product candidates that address meaningful unmet needs we've identified in women's health. The investment required to do so includes corporate overhead, portfolio acquisition and maintenance costs, and ongoing research and development or R&D expenses. The second part of our model involves monetizing the value of the portfolio's clinical and regulatory advances over the near and long term. There are multiple ways to generate value from a portfolio, and one approach includes securing payments upfront and over time in the form of license fees, commercial milestones, and royalties on net sales. This is the arrangement we put in place for XACIATO. As John just outlined, pursuant to the terms of our global license agreement with Organon for XACIATO, we've already received $10 million upfront upon the agreement's effectiveness. We will be entitled to receive a milestone of $2.5 million following the first commercial sale. Thereafter, we will be eligible to receive potential additional milestones of up to $180 million and tiered double-digit royalties on net sales. During 2022, we recognized our first revenue from the $10 million license fee from Organon that I just mentioned. Our general and administrative, or G&A, expenses were approximately $11.2 million. Our R&D expenses across our entire portfolio, which vary from period to period based on our clinical, preclinical, manufacturing, regulatory, and other activities, were approximately $30 million and primarily reflected the costs of our late-stage programs, such as the ongoing Sildenafil Cream, 3.6% Phase IIb RESPOND clinical trial and manufacturing and regulatory affairs activities related to Ovaprene. Our comprehensive loss for 2022 was approximately $31.1 million. We ended 2022 with approximately $34.7 million in cash and cash equivalents. During the year, we received approximately $24.1 million in nondilutive funding, including the $10 million license fee from Organon, approximately $13.3 million in grant funding, and approximately $800,000 from the Australian government as a research and development cash rebate from clinical studies we performed in 2021. Grant funding consisted primarily of funding for the Daré-LAT1 program under a 2021 grant agreement and for the DARE-LVT1 program under a November 2022 grant agreement. Additionally, our grant funding included NICHD funding for the Daré-204, DARE-PTB1 program. As we've said before, nondilutive sources have and will continue to play a very important role in our funding strategy. Our work with the NICHD will allow Daré to share costs of the upcoming Ovaprene pivotal study and to tap into the NICHD's extensive experience in conducting contraceptive studies. Under our existing CRADA, we are responsible for providing clinical supplies for Ovaprene for the study, coordinating interactions with the FDA, preparing and submitting supporting regulatory documentation, and providing a total of $5.5 million to the NICHD to be applied towards the cost of conducting the pivotal study, $5 million of which has already been paid. NICHD is responsible for other costs related to conducting the study. As of December 31, 2022, we had outstanding warrants issued in February of 2018, that were exercisable for up to approximately 1.4 million shares of our common stock. Subsequent to the end of the year, all of those warrants were either exercised or have expired. Today, none of those warrants are expanding. We received approximately $1.3 million in cash and issued approximately 1.4 million shares as a result of such warrant exercises. As of March 28, 2023, Daré had approximately 86.2 million shares of common stock outstanding. In closing, we will endeavor to be creative, collaborative, and opportunistic in seeking the capital necessary to advance our candidates and to build shareholder value. We also encourage investors to review the more detailed discussion of our financials, our financial condition, liquidity, capital resources, and risk factors on our Form 10-K for the year ended December 31, 2022, which we filed this afternoon. I would now like to turn the call over to the operator.

Congrats on all the progress. Just thinking about the upcoming RESPOND data, can you talk about the different components that are going into the arousal sensation domains in both of the primary composite endpoints for both the SFQ 28 and the SBSBAO, and what would be considered a clinically meaningful improvement on some of these endpoints? And then again, thinking about this patient population, what proportion of women with FSIID would fall under the category that you're enrolling into the Phase IIb?

Great question. And thank you for the kind words about our accomplishments. So let's start first with the questionnaires and the nature of the questions specifically in those primary endpoints. That's a great and clinically meaningful consideration. In any clinical trial, you can only use as your primary endpoint something that has already been validated. In the place of sexual health, there are not a lot of validated questionnaires for women, not surprisingly, given that there haven't been many sponsor programs to take products through the FDA. But the endpoints you highlighted have been validated, and the sexual functioning questionnaire does have a subset of questions covering various aspects related to genital arousal response. These specific questions will assess what happens in the genital region, particularly when blood flow increases, because that's what elicits those sensations that women can experience. There are also questions related to distress, acknowledging that an inability to attain or maintain a sufficient genital arousal response can lead to distress. Since these questionnaires have not been used before in the context of arousal disorder, there is an opportunity for us in both the primaries and our exploratory endpoints to gather meaningful information. We've included a number of exploratory endpoints in this study stemming from our content validity work with women affected by the condition. This understanding will inform what is considered clinically meaningful improvement and guide us in the Phase III preparations. Additionally, we are also looking at a variety of patient populations, including those with just arousal disorder and those with combined symptoms of arousal and lack of interest, as well as others. We are very motivated to analyze these data thoroughly to pave the way for future developments in this field. There is a lot of excitement surrounding the data we will generate. I will emphasize that we plan to report top line data in the second quarter and follow it with a deeper analysis.

Just maybe first on the Sildenafil Cream program. How are you thinking about the commercialization strategy? Since you've pursued partners for XACIATO and Ovaprene, when do you think you need to make a decision on potentially becoming a commercial organization for Sildenafil Cream? Is it after Phase III data, possibly before?

Great questions. I'm actually going to start with the second part of your question about our go-forward strategy. We assess each product's commercialization pathway on an individual basis, considering their specific requirements and objectives. We continue to monitor how our candidates develop and make decisions based on the need for collaboration or for direct engagement in commercialization activities. On the one hand, we have flexibility across our product portfolio, which encompasses 12 development-stage candidates. For instance, our partnership with Bayer on Ovaprene allows us to leverage their expertise while Daré takes the lead on the development program. On the other hand, for less straightforward regulatory approval pathways, we may choose to engage partners to efficiently navigate the market. Given the unique nature of the Sildenafil program, we are working on the most advantageous approach for its commercialization, which could range from becoming a commercial entity to exploring collaborations. Moving on to the first part of your question regarding enrollment strategies, our Phase IIb exploratory study is designed thoughtfully to accommodate multiple patient profiles and analyze them, allowing us to define a patient's population that will optimize Sildenafil Cream's potential in the market. As we move forward, we think about potentially conducting 2 Phase III trials due to the novelty of the indication.

I had a question on PDMI. In terms of doses being tested, how do they compare with systemically dosed versions? Is the expectation that a single dose would be sufficient for most patients suffering pain typically seen in 24 hours?

Both great questions. Thanks for asking about that program. Since we've initiated the study, we've been excited about the response and interest in this program. The trial is designed to address the questions you've raised. We, of course, factored in what's delivered with the oral doses of diclofenac and the effects noted systemically. However, since we are transitioning from a systemic oral delivery to localized delivery, this shift does not accommodate a direct one-to-one comparison. Similar to our XACIATO program, we anticipate that delivering diclofenac locally while taking patient comfort and safety into account will provide distinct advantages. We have selected doses based on achieving therapeutic levels at the site of action while remaining cognizant of systemic effects. As for duration and effectiveness, our study will evaluate how long patients experience relief from pain. This knowledge is crucial since we will be assessing patients who are already familiar with primary dysmenorrhea. We expect to see prolonged benefits from the localized treatment with optimal dose delivery through our proprietary hydrogel. The study aims to determine the timing and frequency of dosing that achieves the most significant relief.

How are you thinking about 2023 spending levels relative to 2022?

Yes, great question. As you know, we typically don't give a lot of forward-looking guidance around our spending. We have been fairly consistent historically with our spending patterns. The majority of our expenses relate to our development programs, which are naturally variable. In 2023, our R&D expenses will largely be driven by the completion of the Sildenafil study and the manufacturing plan for Ovaprene. We will continue to monitor our capital resources and the timing of our expenses relative to capital infusion opportunities as a development stage company. Development is where we focus our capital investment, while G&A has remained relatively stable. Our strategic focus on Sildenafil and Ovaprene will define the main expense trajectory in the first half of this year, and future expenditures will align with advancing our other programs as the year progresses.

Could you walk us through the key data emerging from the Phase I/II for HRT1 and the unmet need in the space that led to the decision to progress into Phase III? What are the expected timelines surrounding the IND submission and study initiation?

Great. Thank you for the kind words and for asking about that product. We are particularly passionate about HRT1. The North American Menopause Society has identified significant gaps within this space, indicating an unmet need for effective treatment options across menopausal symptoms. Our objective is to deliver functional hormones at the lowest effective dosing levels and to counterbalance these for safety. The combination of estradiol and progesterone in a convenient, monthly vaginal format is currently unavailable and presents a new avenue for hormone therapy effectively. We are encouraged by the promising results emerging from early studies, particularly given the single monthly administration route, which improves patient compliance compared to daily regimens. Our engagement with the FDA throughout the IND preparation process indicates that a single Phase III trial may suffice, pending successful manufacturing and regulatory discussions moving forward. We'll continue to provide further updates as we progress with IND activities and the timeline for an upcoming Phase III study. Thank you for your time today and for following our progress. We remain committed to driving value for all stakeholders, particularly emphasizing women's health through our diverse portfolio. We aim to bring to market prescription therapies that enhance outcomes where current standards of care fall short and improve ease of use for women. Key upcoming milestones we discussed today include top-line results from the Sildenafil Cream Phase III response study, the U.S. launch of XACIATO by Organon, initiation of our pivotal Ovaprene study, IND-related activities for DARE-HRT1 and DARE-VVA1, and Phase III and Phase II study initiation plans for DARE-PDM1. We deeply appreciate your support, and we look forward to updating you on our progress.

This concludes today's conference call. You may now disconnect.