Welcome to the conference call hosted by Daré Bioscience to review the company's first quarter financial results and to provide the general business update. This call is being recorded. My name is Alex, and I will be your operator for today. With us today from Daré are Sabrina Martucci Johnson, President and Chief Executive Officer; and MarDee Haring-Layton, Chief Accounting Officer. Ms. Johnson, please proceed.

Thank you. Good afternoon, and welcome to the Daré Bioscience Financial Results and Business Update Call for the quarter ended March 31, 2024. Today, we'll review our first quarter results and discuss developments and expectations from our pipeline and portfolio. I would like to remind you that today's discussion will include forward-looking statements within the meaning of the 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 Form 10-Q for the quarter ended March 31, 2024, which was filed today. I would also like to point out that the content of this call includes time-sensitive information that is current only as of today, May 14, 2024. Daré undertakes no obligation to update any forward-looking statements to reflect new information or developments after this call, except as required by law. Before we begin today's update, I'd like to take a minute to remind those of you who may be newer to the Daré story of our purpose and mission. We believe Daré is the only publicly traded company focused solely on women's health, pharmaceutical product development broadly, and we remain dedicated to advancing disruptive products for the health and well-being of women through clinical development, regulatory review, and ultimately to market. Our commitment and focus is to improve health outcomes and the lives of women by leveraging the basic science and pharmacology that is understood about certain active pharmaceutical ingredients and marketed products to accelerate innovative treatments that women want and need by boldly addressing existing therapeutic gaps. We seek to optimize these treatments for our target indications to enhance outcomes, convenience, and side effect profile, or to address a novel indication where the pharmacology is well suited that has not been previously applied to the indication in question for women. We believe we have assembled the broadest portfolio of potential high-impact first-in-category product candidates, many of which have already demonstrated proof of concept, and that our robust pipeline positions us well for the short, medium, and long term. On our recent full year 2023 financial results and update call, we discussed the strides we made last year to advance innovative therapies for women and the key milestones anticipated for 2024. So today, in addition to the continued commercialization by our collaborator, Organon, of XACIATO, clindamycin phosphate vaginal gel 2%, the first FDA-approved product to emerge from our portfolio and a treatment for bacterial vaginosis in females aged 12 and older that's now available by prescription nationwide. On that last call, we discussed anticipated 2024 milestones focused on our first-in-category product candidates relating to continued progress toward a Phase III clinical trial of Sildenafil Cream 3.6% in female sexual arousal disorder, for which there are no FDA-approved treatments, and enrollment in our Phase III study of Ovaprene, our potentially first-in-category hormone-free, monthly intravaginal contraceptive candidate. Today, we're going to cover our first quarter 2024 accomplishments as well as some important recent highlights, including the $22 million nondiluted strategic royalty financing we announced a couple of weeks ago. We'll also review our progress against the anticipated 2024 milestones, providing context and metrics that are important to our current and future shareholders, with a focus on the Phase III candidates, Ovaprene and Sildenafil Cream. Before I do, I'm going to first turn it over to our Chief Accounting Officer, MarDee, to review our first quarter financial results.

Thanks, Sabrina, and thanks, everyone, for joining us today. I would now like to summarize Daré's financial results for the quarter ended March 31, 2024, which I will refer to as the first quarter. As Sabrina mentioned, Daré's business strategy is to assemble and advance a portfolio of differentiated product candidates that address meaningful unmet needs we've identified in women's health and then to monetize the value of our portfolio's clinical and regulatory advances over the near and long term. The investment required to build and advance a portfolio includes corporate overhead, portfolio acquisition and maintenance costs, and ongoing research and development or R&D expenses. During the first quarter of 2024, our general and administrative expenses were approximately $2.7 million. Our R&D expenses, which vary from period to period based on clinical, preclinical, manufacturing, regulatory, and other R&D activities across our entire portfolio, were approximately $3.3 million for the first quarter, which is a 34% decrease compared to Q1 2023. Closeout costs related to the Phase IIb RESPOND clinical study of Sildenafil Cream and other clinical studies conducted in 2023 contributed significantly to our first quarter R&D expenses, which will not be the case in future quarters. Until we commence a Sildenafil Cream Phase III clinical study, we expect R&D expenses for future quarters to be lower than the first quarter R&D expenses. Our comprehensive loss for the quarter was approximately $6.8 million. We ended the first quarter with approximately $3.6 million in cash and cash equivalents and had approximately 101 million shares of common stock outstanding as of May 13. We recently announced a royalty monetization transaction with XOMA in which Daré received $22 million in gross proceeds, and following a prespecified total return to XOMA, XOMA will make upside sharing milestone payments to Daré equal to 50% of all remaining cash flows sold to XOMA under the transaction. This monetization of future net royalty and net milestone payments accelerates potential cash flows from the future commercial success of XACIATO and ensures that Daré and our shareholders have the opportunity to participate meaningfully in XACIATO economics as commercialization progresses. This nondilutive financing provides significant capital to help achieve our objectives and importantly, allows us to focus on advancing our Phase III investigational products, Ovaprene and Sildenafil Cream, both of which represent large market first-in-category opportunities. The structure of this transaction also underscores the significance of Ovaprene and Sildenafil Cream with future economics and the ability to achieve attractive margins through retained net sales and all commercial milestones. In addition to this financing, we received total grant funding of approximately $1.9 million in January and April under our grant agreements with the foundation in support of our investigational contraceptive DARE-LARC1 and to fund activities related to bacteria-based live biotherapeutic product development. Daré may receive up to a total of approximately $49 million under our grant agreement relating to DARE-LARC1 to advance development of DARE-LARC1 through nonclinical proof of principle studies and other work to prepare for the submission of an investigational new drug application with the FDA, approval of which is required to begin testing in humans. To date, Daré has received approximately $29.4 million under the DARE-LARC1 grant agreement. Together, the royalty financing and latest installment in grant funding represent our commitment to being creative, collaborative, and opportunistic in seeking the capital needed to meet our objectives and to build shareholder value. We encourage investors to review the more detailed discussion of our financials, our financial condition, liquidity, capital resources, and risk factors in our quarterly report on Form 10-Q for the quarter ended March 31, 2024, which we filed this afternoon, as well as in our annual report on Form 10-K for the year ended December 31, 2023, which was filed on March 28, 2024. I would now like to turn the call back over to Sabrina.

Thank you, MarDee. I'm now going to talk through our first quarter 2024 accomplishments and some anticipated 2024 milestones with a focus on our Phase III assets, Sildenafil Cream and Ovaprene. First, I'll provide an update on our on-market assets, XACIATO clindamycin phosphate vaginal gel 2%, or just XACIATO. As a reminder, XACIATO is indicated for the treatment of bacterial vaginosis in females 12 years of age and older. It's a colorless, single-dose vaginal gel that can be applied at any time of day, and it's formulated with the goal of limiting leakage and increasing vaginal retention time, known as time spent in place. In the first quarter of 2024, through our commercialization agreement with Organon, XACIATO became available by prescription across the United States. The Organon Women's Health sales team continues to see strong acceptance from clinicians who have tried with their patients multiple uses of XACIATO in their practice. This progressive ramp-up of trial from key health care provider targets continues to build momentum as we move through the first full year of launch. I'll now talk about Sildenafil Cream, 3.6%. During the first quarter, we also announced the successful completion of an end of Phase II meeting with the FDA on the development of Sildenafil Cream as a treatment for female sexual arousal disorder. In terms of market and revenue potential, there are currently no FDA-approved treatments for any form of sexual arousal disorder in women, meaning Sildenafil Cream has the potential to be the first. Sildenafil is the active ingredient in tablet form for oral administration currently marketed under the brand name Viagra for the treatment of erectile dysfunction in men, which was undoubtedly one of the most successful prescription products ever launched. Market research suggests that approximately 20 million women in the United States experience symptoms of low or no sexual arousal. In terms of probability of success, we've already demonstrated that Sildenafil Cream increased genital tissue blood flow in quantitative studies. As we most recently shared during our full year 2023 results call, we also completed all study analyses of data from the exploratory Phase IIb RESPOND clinical study of Sildenafil Cream. The patient population and the endpoints identified in the Phase IIb study and proposed to the FDA for Phase III clinical development were those were post-hoc analyses of the Phase IIb study data showed that Sildenafil Cream demonstrated both statistically significant and meaningful within-patient improvement. We are continuing to interact with the FDA as the agency reviews specifically the data generated on the proposed endpoints to take forward into Phase III development. The FDA has indicated that it anticipates providing additional feedback during this second quarter on the Phase III design, which would be the first-ever Phase III pivotal study of a therapeutic candidate for the treatment of arousal disorder in women. We look forward to providing updates on the FDA's feedback, Phase III study design and plans, as well as any relevant updates on our collaboration strategy as available this year. And now to Ovaprene. We also want to provide an update on the Phase III study of Ovaprene, which is our novel investigational hormone-free monthly intravaginal contraceptive, whose U.S. commercial rights are under a license agreement with Bayer. Non-hormonal contraception represents a significant commercial market opportunity, and there are currently no monthly hormone-free contraceptives approved by the FDA. Ovaprene has the potential to be a disruptive product in the contraceptive category and an important option for women who cannot use hormone-based birth control products or prefer not to do so. Based on market research, approximately 35 million women in the U.S. are potential candidates for Ovaprene. Working with study collaborators at the Eunice Kennedy Shriver National Institute of Child Health and Human Development, or NICHD, of the National Institute of Health, we commenced patient enrollment in the Ovaprene pivotal Phase III clinical study in December 2023. Recruitment is currently underway at 18 sites across the United States and is supported by a central advertising campaign for the study that launched in March of this year. You can find a link to the campaign materials by visiting our website home page. We were thrilled to see how many women responded immediately to our call to join the hormone-free revolution when we launched the campaign in March by checking if they qualified to participate in the study. We plan to provide updates on anticipated timing for study completion, which involves 12 months of product use as enrollment progresses and will also provide recruitment and any relevant data updates in the coming quarters. Based on communications to date with the FDA, if successful, we believe that just the single registration study will be required to support a premarket approval application submission with the FDA. And lastly, we announced in the first quarter that we achieved technological proof-of-concept for our preclinical candidates that MarDee was talking about earlier, DARE-LARC1. Importantly, this milestone reflects the drug delivery platform's transformative potential in not only women's health but also various conditions outside of women's health, where treatment requires frequent dosing or regular injections. We are developing the DARE-LARC1 implant, which utilizes this proprietary drug delivery platform as a user-controlled, long-acting reversible contraceptive solution designed to combine the benefits of long-acting reversible contraceptives with the flexibility of shorter-acting methods. But we see the potential of this drug delivery platform technology to transform treatment for certain other chronic conditions as well. So with this milestone, we are excited to begin strategic discussions with pharmaceutical companies working to address chronic conditions such as diabetes, obesity, and other conditions requiring precise and prolonged treatment, leveraging the platform's potential to precisely deliver a wide array of active pharmaceutical ingredients over longer durations with a lower burden for patients. And as MarDee mentioned earlier, current development of DARE-LARC1 implant technology is supported by an up to $49 million foundation grant. DARE-LARC1 and our other grant-funded product candidates enhance our portfolio, and we look forward to providing relevant updates on DARE-LARC1 and the other ongoing grant-funded programs as relevant this year. So in summary, we're excited about the progress we've made this year and are looking forward to providing more updates as we work to advance some of the most potentially disruptive candidates for health and well-being of women in decades, collaborating with leading companies, including Organon for XACIATO and Bayer for Ovaprene to commercialize and deliver these treatments to as many women as possible. So I'd now like to turn the call over to the operator for Q&A.

And your first question comes from the line of Douglas Tsao with H.C. Wainwright.

I guess, Sabrina, you're looking now for some additional feedback from the FDA on Sildenafil Cream. I mean can you just maybe help us walk through some of the steps that would be needed to initiate that Phase III?

Yes, Doug, thanks. Great question. So yes, as I mentioned, we're waiting for some feedback so that we can make sure we're aligned on the final Phase III design and the endpoints for that. Important things like endpoint hierarchy and all of that. But to your question, what we're trying to do is make sure that all of the other activities that are required to start up a clinical trial that we're doing everything we can to ensure that we are ready. Those activities include things such as selecting your CRO and having your study budget and materials in place, making sure we have a clear line of sight into these sites that we want to use. Now obviously, we had the experience of the Phase IIb study, so that's helpful in terms of selecting sites because we know the Phase III used in that study and who we want to continue. We're just making sure we're ready from that regard, and that we're ready with clinical supplies, materials, and right, the investigational product and placebo to test in the trial. So those are the activities that are underway, and that we really started earlier this year, quite frankly, and that are well underway to ensure that as soon as we get the feedback from the FDA that we are ready to move as quickly as feasible to proceed, and there isn't some other gating activity that we had not yet completed.

Okay. Great. That's helpful. And then just maybe on Ovaprene, maybe just help us understand when we should sort of start to think about getting initial data or just a final readout from a timing standpoint?

Yes. Great question. So the trial, for those who may not be familiar with it, is a 12-month study, meaning the subjects in the study, our goal is to follow them to have them use Ovaprene over the course of 12 months. And we'd like to have around 200, 250 women complete 12 months of use with the product. We started enrolling subjects at the end of last year. The advertising campaign, which is important in studies like this, went live in March. As I mentioned in my comments, we are definitely very happy with how much responsiveness we saw to the advertisement campaign, which really leverages social media platforms to ensure people are aware of the study and can reach out to express their interest and then matches them to sites. With the ad campaign just going live in March, it's a little bit early for us to give very specific guidance, which we do want to do and provide some perspective on timelines and when we expect all that. But having said that, we are very happy with how the advertising campaign has been going and the responsiveness that we’re seeing. And the reason this is important and going to your question about timelines is because this is an open-label study, meaning everyone is on Ovaprene. Obviously, having a line of sight into how enrollment is going gives us an opportunity to understand if there's an opportunity to look at interim data and when that will happen and when the final data will come. At this point, what I can say definitively is that we certainly do not anticipate having final data this year. That wouldn't be feasible given the timeline of the study. However, we hope to have some meaningful updates that we can share this year. As we get a little further with the live enrollment and ad campaign, we'll be able to give better guidance on when we expect last patient out.

Your next question comes from the line of Kemp Dolliver with Brookline Capital Markets.

I would like to ask a couple of questions about your current funding situation and your future plans. There are some serious notes in the 10-Q regarding your cash runway. However, given your current spending levels, it's possible that you could stretch your resources for over 12 months and reach the Ovaprene readout, especially considering the anticipated decrease in R&D expenses and the minimal obligations you have left for the Ovaprene trial. How should we approach the understanding of your spending, and what can we expect in terms of readouts with the XOMA financing secured?

Yes. Thank you. Great question. As MarDee mentioned in her comments and you noted, R&D spending until we start the Sildenafil trial, because of the nature of our arrangement on Ovaprene and the funds we had already remitted to the NIH under a collaborative research agreement, as you noted, there's not a lot left that we've already committed to spend on that. There's another $500,000 payment on that. But otherwise, the R&D spend, as MarDee noted, is significantly reduced compared to last year until we start a Sildenafil Phase III study. As I was mentioning in response to Doug's question, we want to be prepared to move on that as quickly as we can, and a single Phase III study, our expectations at this point, at least based on what we know today, is around $15 million. When you consider just our baseline burn, in our last call, we provided some guidance that our expected G&A this year was about $10 million. When you take all of that into perspective with MarDee, the $22 million is absolutely impactful. To your point, it gets us to some very important milestones in terms of Ovaprene, and the potential opportunities to look at some of that interim data timing and even to your point, depending on how enrollment goes even further than that. But we want to make sure we're being clear in our communication that a single Sildenafil trial is $15 million. In the scheme of things, is that a lot when you think about the potential of Viagra in the marketplace? No, but we do want to ensure we are being clear in our communication given that dollar amount in relation to the $22 million.

That's very helpful. And to be clear, does that $15 million include the activities you're engaged in now prior to initiation?

It does because the $15 million does include things like manufacturing, the cost of manufacturing the product for clinical trials, site startup activities, and it's what we expect the all-in number to be.

Okay. Assuming the feedback from the FDA is not surprising and there are only minor issues with preparation, what would be a reasonable expectation for starting the trial? It seems that early 2025 is a reasonable timeline, but is there a possibility to begin in early 2024?

Yes, that's definitely our hope. That's a great way to look at it, right? We're just trying to ensure that we've checked all the boxes that we can check and have that final protocol in place, allowing us to move as quickly as we can once we have the protocol. There are start-up activities, like contracting with all the sites, that we can't do until we have a final protocol. Our intent is to move as fast as we can. That's our goal. We'd love to be in a position to do that this year. But it definitely, to your point, is predicated on the timing of getting the comments back from the FDA. Hopefully, they're clear, as you noted, so we can move quickly. But like I said up front, we're ensuring that we have checked off every other activity so that we're ready to sprint.

Okay. And you have the flexibility to delay initiating the trial until you have, say, more certainty around your runway?

Absolutely. It's all within our control. The things we're doing now are not significant in terms of expenses, but they're important activities so that we are ready to go at our choice and timing, completely 100% at our discretion.

Your next question comes from the line of Catherine Novack with Jones Research.

Good afternoon. Just another one on the Sildenafil trial, the potential Phase III trial. Can you remind us what you are still waiting on with regard to feedback? We know that you were aligned previously on indication and study population. So what endpoints are you proposing? And then the timing, is this a 12-week study? Or would it potentially be longer or shorter? What's the duration?

Yes. Great question, and thanks for the reminder to refresh everyone on where we feel we already have great clarity from the FDA based on our December meeting and where really, given that this is the first Phase III study of its kind, the FDA needs a little more time to go through all the information we provided. To your question. First of all, importantly, the patient population and the indication statement and the duration of the efficacy period have all been agreed upon with the FDA. The indication statement is treatment of female sexual arousal disorder, very straightforward. The patient population comprises women with female sexual arousal disorder, including those who, as a result, may have a decrease in desire. That's very common. It’s not only common in female sexual arousal disorder. It also occurs in erectile dysfunction. So, it's very common for an arousal disorder to lead to a decrease in desire. The duration of the efficacy assessment, per FDA guidance for conditions like this includes a few different sexual dysfunctions, but the arousal disorder suggests that 24-week studies may be necessary for Phase III. However, based on our end of Phase II meeting with the FDA, and given the number of sexual events women experienced in our study, the FDA was comfortable that an adequately powered 12-week efficacy study would be sufficient. So those are areas where we've got good clarity. This allows us to be well-prepared right now, as it provides a lot of insights in terms of funding for the duration needed. Where we still have some outstanding questions is regarding what may be necessary to support safety and exposure data on the product. We included partners in our Phase IIb study to observe exposure to them, and we have the 12-week safety data from that. Thus, we want to align on any expectations surrounding that. Furthermore, we want to ensure we’re aligned on the endpoints. Therefore, to your question about what we've suggested, the Phase IIb study's primary endpoint actually had a co-primary endpoint. We had a section from a questionnaire known as the sexual function questionnaire, where we specifically asked about arousal sensation questions. This was a co-primary, including four questions about genital sensations of arousal, which are physical aspects that a woman experiences based on increased blood flow to that area. We also included a question about distress, as the diagnosis for rectal dysfunction and female sexual arousal disorder includes the inability to attain or maintain the physical genital arousal response, which can cause personal distress. So in our Phase IIb study, we included this distress question while our exploratory endpoints assessed various factors such as desire and orgasm. In the Phase IIb study, we presented a robust analysis that includes psychometric analysis to validate these various patient-reported outcomes to the FDA and provided a recommendation of the endpoint hierarchy. While the arousal sensations should remain primary, we’re interested in including all aspects of the experience. FDA is reviewing this to understand the clinically meaningful improvements we established through exit interviews, focusing not only on statistical improvements but improvements that query what matters to the woman. This is why the FDA is currently reviewing our proposal. Our primary focus remains on arousal sensations, but we wish to understand how to approach secondary endpoints and their hierarchy, and our hope is to include as many aspects of the condition as possible in our Phase III study.

Yes. No. That's helpful. Looking forward to FDA feedback, hopefully later this quarter. And then just one more question on the DARE-LARC1. That's a really interesting technology. I'm curious, what is the clinical program like that looks for it? Is it comparable to IMPLANON or NEXPLANON? Are you also trying to test the pause and resume dose?

Yes, that's a great question. We've begun mapping out what the ultimate clinical program will look like and started engaging with the FDA around it. To your first question, the contraceptive effectiveness part will indeed look very much like what NEXPLANON or other hormone-releasing implants do, where you establish through Phase I the relevant doses of those hormones, and then typically move directly into a contraceptive effectiveness study because you've demonstrated you have the hormones at the correct levels. You will, however, need to gather ample supportive data after these studies. Like those products, you tend to get approved in increments for 1-year, 2-year, 3-year durations, and then you keep following women to extend their years of effectiveness. So it's quite similar to hormone-releasing products like NEXPLANON which went for their 5-year approval. Regarding nonclinical work, we've already demonstrated the pause and resume component, and that will form part of our ongoing discussions with the FDA to determine what type of demonstration in vivo will be required in Phase I versus any requirements in Phase III.

That concludes the question-and-answer session. I would like to turn the call back over to Sabrina Martucci Johnson for any additional or closing remarks.

Thank you. Well, I really appreciate the great questions, and I do have some closing comments. First of all, thanks, everyone, for taking the time to hear about the recent updates and our ongoing commitment to drive value for all of our Daré stakeholders by identifying and advancing potential new therapies to provide additional choices and enhanced outcomes for women. Building on the momentum of 2023, there's no doubt that it's an incredible time to be working in women's health. We continue to be excited about the increased attention on the space through the various White House initiatives, including the ARPA Ideation event that we attended in February of this year, the executive order signing at the White House in March, and additionally, we're thrilled to see the recent unveiling of a bipartisan Senate bill that would authorize $275 million to boost research, training, and public awareness around menopause, specifically and mid-life women's health issues. This area is often stigmatized, overlooked, and underfunded, which is particularly relevant to us given our work on DARE-HRT1, a program we are preparing for Phase III as a potential first vaginal monthly therapy for the vasomotor symptoms of menopause, along with our Phase II-ready DARE-VVA1, our hormone-free vaginal candidate for sexual pain related to menopause. We’re looking forward to ongoing progress in the menopause space and potential progress with this new bill. Earlier this month, we were also selected as a member spoke of the Investor Catalyst Hub, which is the regional hub of arpa/inet.h, the nationwide health innovation network launched by ARPA-H. Through our participation, we get access to potential funding and flexible contracting for faster award execution compared to traditional government contracts. We can provide input on ARPA-H challenge areas and priorities and really help to ensure women’s health remains at the forefront of innovation. These moments truly show just how much can be accomplished by bringing focus and investment to the entire ecosystem so that we can boldly innovate for women. As you heard today, we're making great progress and are excited for what the rest of this year holds for Daré. As we look ahead to the rest of the year, we expect several milestones including Ovaprene and the pivotal study update where we expect to be the single registration study. We look forward to giving updates on our discussions with the FDA and activities to commence our Phase III for our potential first-in-category treatment option for female sexual arousal disorder, Sildenafil Cream. Our unique model, along with the support of our commercial collaborators through all of that, positions us well to accelerate innovation for women while also driving value for all of our Daré stakeholders. And we look forward to keeping you updated on our progress toward the milestones we discussed today. Thank you.

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.