Earnings Call Transcript - DARE Q2 2021

Operator, Operator

Thank you all for standing by. And welcome to the conference call hosted by Daré Bioscience to review the Company’s Financial Results for the Quarter Ended June 30, 2021, and to provide a General Business Update. Please note that this call is being recorded. This is Jessi, and I’ll 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.

Sabrina Martucci Johnson, CEO

Thank you. Good afternoon and welcome to our second quarter 2021 financial results and business update call for Daré Bioscience. Our plan today is to review last quarter’s results, discuss developments since our last call in May and use the time to highlight objectives and milestones anticipated for the balance of 2021. Before I begin, I’d 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 provision to 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-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 June 30, 2021, which was filed today, as well as our Annual Report on Form 10-K for the year ended December 31, 2020 was filed on March 30, 2021. I would also like to point out that the content of this call includes time-sensitive information that is current only as of today, August 12, 2021. Daré undertakes no obligation to update any forward-looking statements to reflect new information or developments after this call, except as required by law. Daré is a leader in women’s health innovation, and we are squarely focused on improving the lives and well-being of women. Our value creation strategy is to accelerate the availability of new prescription products for women by selecting and advancing product candidates that we believe have the potential to be first-in-category and first-line and have meaningful commercial opportunity. We currently have four clinical stage programs in the areas of vaginal health, sexual health, contraception, and menopause, and one product in the breast cancer supportive care category soon to enter Phase 1. And most of my remarks today will address these candidates. The first half of 2021 has been quite eventful for Daré. And the announcements we were able to make over the last two months have been the type of updates that every CEO enjoys making. We announced positive Phase 1 data for our hormone therapy product and up to $48.9 million grant over the course of five years for one of our preclinical contraceptive programs, the collaborative research agreement with the NIH to co-financially support and co-conduct our Phase 3 study for investigational contraceptive Ovaprene. And just this week, we announced the FDA's acceptance and priority review of our NDA for bacterial vaginosis product candidate with a December 7, 2021, PDUFA target action date. It has definitely been a meaningful few months for Daré and we hope it will continue to prove to be a meaningful year for us, given what we have yet to come. With that backdrop, I'll now provide some additional context on these accomplishments, and specifically dive deeper on the relevant updates related to our four clinical stage program, as well as that supportive care cancer program. In the vaginal health category of bacterial vaginosis, which impacts an estimated 21 million women in the United States, I'll start with DARE-BV1. During the second quarter of 2021 and in line with our custom, we submitted a new drug application or NDA to the FDA. We requested a priority review at that time of submission. We announced that the FDA accepted the filing of the NDA for DARE-BV1 for the treatment of bacterial vaginosis. The NDA is supported by positive results from the DARE-BVFREE Phase 3 randomized, double-blind, placebo-controlled clinical trial evaluating DARE-BV1 in women diagnosed with bacterial vaginosis. The acceptance of this NDA marks a major milestone not only for Daré as a company but importantly for the millions of women that are impacted by bacterial vaginosis. It is our goal as a company to bring to market products like this that have the potential to improve outcomes and convenience. As DARE-BV1 demonstrated that potential to do in the Phase 3 study where a single vaginal dose achieved clinical cure rates in the range of 70% to 81% compared to currently FDA approved branded products which only have clinical cure rates in the range of 37% to 68%. DARE-BV1 is a significant advancement in the treatment landscape for this condition. Ongoing strategic discussions and other activities to support a robust market launch of DARE-BV1 in 2022 if approved are underway, and we plan to finalize and announce the commercialization strategy for DARE-BV1 in the U.S. by year-end. John will be providing additional color in a moment. In the sexual health category, I'll now provide an update on Sildenafil cream 3.6%, our investigational product version of erectile dysfunction. In March of this year, we commenced our Phase 2b clinical study evaluating Sildenafil cream as a potential treatment for female sexual arousal disorder (FSAD). FSAD represents a large unmet need, with an estimated 10 million women in the U.S. experiencing distress from symptoms of low or no sexual arousal. No FDA approved products exist today to treat FSAD despite the fact that the FSAD market is estimated to be as significant, if not more so than the erectile dysfunction market in both the U.S. and the rest of the world. If our clinical development is successful, Sildenafil cream has the potential to be the first FDA approved FSAD treatment option. We are actively enrolling subjects into the Phase 2b study evaluating this product at sites across the country. During our last call, we certainly would continue to provide updates on the progress of the Phase 2b study and the potential impact of COVID-19 on the expected timeline. We are monitoring this closely. And particularly given the evolving COVID-19 guidance and case-loads across the country, we feel it’s challenging to confirm anticipated timing for the top-line data readout until we complete the planned interim analysis to determine the ultimate size of the study. We have recently seen the pace of enrollment at certain sites decline because of those sites being in locations where the case levels were higher and adhering to government guidelines. Due to the impact potentially on the pace of enrollment overall for the trial resulting from government recommendations or orders, we cannot predict with reasonable certainty at this time when the interim analysis will be conducted or when we will have the top-line data from the trial. As we've done today, we will continue to provide updates as the trial continues and we can better project timelines. Now I'd like to provide an update on our investigational product Ovaprene, a potential first in category option in the over $7 billion U.S. contraceptive category. Last month, we announced that we entered into a collaborative research and development agreement (CRADA) with the National Institute of Child Health and Human Development (NICHD) for the pivotal Phase 3 study of Ovaprene. This agreement will allow us to leverage the tremendous development expertise at the NICHD in contraceptive clinical studies and to share the cost of the pivotal Phase 3 study. The current agreement reflects NICHD's continued support for the development of Ovaprene and will allow us to leverage their clinical trial expertise, while also sharing costs. As I mentioned earlier, we plan to file an Investigational Device Exemption (IDE) for Ovaprene in the fourth quarter of this year, and pending the FDA's review and clearance of the IDE, we intend to initiate that pivotal study in 2022. DARE-HRT1 is our investigational hormone therapy product, and during the second quarter, we reported positive top-line data from our Phase 1 clinical study of DARE-HRT1 conducted in Australia. This technology offers a unique drug delivery system in women's health, with the potential to deliver different active drugs at different rates. The primary objective of the study was to describe these pharmacokinetic parameters of two different dose combinations over 28 days. Secondary objectives included assessing the safety and tolerability of DARE-HRT1. The results support the potential of DARE-HRT1 as an effective hormone therapy for both vasomotor and vaginal symptoms associated with menopause. We plan on submitting that Phase 1 clinical study data for publication in a peer-reviewed journal. Finally, we plan on initiating a Phase 1 clinical study later this year in Australia for our supportive care program, DARE-VVA1, a proprietary formulation of tamoxifen for vaginal administration to treat vaginal atrophy.

John Fair, Chief Strategy Officer

Thank you, Sabrina. Now that the NDA for DARE-BV1 has been accepted for filing by the FDA, and priority review has been granted. We anticipate acceleration across the three main commercialization strategies we've been progressing in parallel. Those scenarios include a straight-out license to a strategic partner, where the partner is solely responsible for commercialization in exchange for milestone and royalty payments to Daré based on revenue generated by the product; a second scenario where we strategically partner DARE-BV1, but we’ve options to have a role in the commercialization; and finally, a scenario where we can play a direct and active role in commercialization that includes influencing the go-to-market planning strategy. All three options are currently under discussion. We want to ensure that these products have broad commercial access to benefit all our stakeholders, specifically our investors. As many of you know, women diagnosed with bacterial vaginosis face challenges in finding interventions that rapidly address the signs and symptoms of the infection. Currently available FDA approved treatment options work about half the time on average. We believe that DARE-BV1’s product profile will appeal to both patients and providers, as it has the potential to provide a clinically meaningful improvement over currently approved products. In parallel with our strategic partnering discussions, we are actively executing other commercial introduction workstreams such as manufacturing and market access, with the goal of allowing us and our strategic partner to execute against a robust 2022 launch if we receive FDA approval in December of this year. We are excited at the prospect of bringing this important new therapeutic option to women and providers.

Lisa Walters-Hoffert, CFO

Thanks, John. Hi, everyone. Thanks for joining us today. I would now like to summarize Daré’s financial results for the quarter ended June 30, 2021. 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 (R&D) activities to advance our candidates through clinical and regulatory milestones, including approval. For the quarter ended June 30, 2021, Daré’s general and administrative expenses were approximately $1.8 million and our R&D expenses were approximately $7.3 million. The increase in R&D expenses compared to the same period in 2020 primarily reflects increased costs of clinical regulatory affairs and development activities related to Sildenafil cream, DARE-BV1, Ovaprene, and DARE-HRT1. Our comprehensive loss for the quarter was approximately $9.2 million. During the six months ended June 30, 2021, net cash proceeds raised from financing activities were approximately $24.6 million and reflected sales of common stock under our ATM program, equity line, and warrant exercises. We ended the quarter with approximately $9.1 million in cash and cash equivalents. Subsequent to the quarter’s end, Daré received additional net cash proceeds of approximately $25.4 million from sales of common stock under our ATM program. In addition, in July, we received an initial cash payment of approximately $11.4 million in non-dilutive grant funding to support the development of DARE-LARC1. The entire grant awarded for up to $48.9 million, with future payments contingent upon the DARE-LARC1 program achieving specified milestones. We have plans to initiate our DARE-VVA Phase 1 study later this year, which will potentially favorable impact our cash burn going forward. We believe that our collaborations and non-dilutive funding will allow for the completion of our pivotal Phase 3 study in an efficient and cost-effective manner. We will endeavor to be creative, collaborative, and opportunistic in seeking the capital necessary to advance our candidates and build shareholder value.

Zegbeh Jallah, Analyst

Hi, thanks for taking my question. Just have a few here. I think the first is for DARE-BV1. So congrats on the PDUFA date that's happening before the end of the year. We're just curious if the approval processes include an inspection of your manufacturing facility. And then we're also just curious to see who's doing the manufacturing for the product.

Sabrina Martucci Johnson, CEO

Hi, thanks for the question. Yes, so in terms of whether it will include an inspection, those are done at the discretion of the FDA. Often, there are pre-approval inspections, but they are not always held. We have not disclosed the manufacturer of this product other than to say it's a third-party contract manufacturer that specializes in the manufacturing of vaginal creams and gels.

Zegbeh Jallah, Analyst

Thanks, Sabrina. And then John also mentioned some manufacturing efforts and market access efforts. Can you elaborate on that if possible for DARE-BV1 and how you are thinking about that also in terms of helping with the partnership that's coming out, giving you more leverage?

Sabrina Martucci Johnson, CEO

So as John noted, we're purposely managing our commercialization strategy and partnership process in parallel with the regulatory process. This allows us to strategically position ourselves regardless of the approach we choose. The manufacturing work we're doing with our third-party manufacturer includes activities necessary for commercial supply readiness, ensuring that everything is in place for a successful product launch so that we are well-prepared for any regulatory inspection process. We're also focusing on market access and gaining insights into the patient journey and market access strategies.

John Fair, Chief Strategy Officer

We want to understand the market landscape we're entering and differentiate DARE-BV1 in the eyes of patients, providers, and payers. This is fundamental to our strategic launch strategy for this asset.

Zegbeh Jallah, Analyst

Thanks, John. And then just another follow-up there. I think that third scenario you mentioned for commercialization was perhaps influencing the market strategy. If you were to have your own sales team, how long do you think it could take to get the product out there? And how do you think it will impact the product launch or the timing of the launch?

Sabrina Martucci Johnson, CEO

In terms of timing of launch, we have been managing this process so that whichever path we choose, the timing remains consistent. The sales effort is certainly tied to our overall market launch strategy, and we will tailor our approach based on the product's needs. We are exploring our options carefully right now.

Zegbeh Jallah, Analyst

Thanks, Sabrina.

Chris Bialas, Analyst

Hi, everyone, Chris Bialas here. So congrats on the quarter, particularly on the NDA acceptance. Can you give us some more detail on how the Ovaprene IDE processes are going? Aside from the cost savings, what do you see as the main benefit of the collaborative research and development agreement?

Sabrina Martucci Johnson, CEO

We are progressing with the IDE activities to file the IDE, which involves pulling together the non-clinical and manufacturing-related information. The CRADA with the NIH offers financial support, planning for success, and execution support, allowing us to leverage their clinical trial expertise, which is a significant advantage for our pivotal study.

Unidentified Analyst, Analyst

You mentioned your core competency is securing non-dilutive funding. Can you tell us more about your strategy for securing such funding?

Sabrina Martucci Johnson, CEO

We take great pride in establishing relationships that lead to significant funding levels. Our track record of execution has enabled us to form these strategic partnerships. The strategy involves a concerted effort across our portfolio to seek out non-dilutive funding opportunities, which we will continue to pursue actively.

Kumar Raja, Analyst

Congratulations on all the progress. With regard to BV1, do you expect an advisory committee meeting? Regarding the labeling discussions and label expectations, when is that expected to take place, and how is that going to impact your strategy in terms of partnership?

Sabrina Martucci Johnson, CEO

I don't anticipate an advisory committee meeting for DARE-BV1, as this is a straightforward indication. In terms of labeling, we are looking at existing product labels for insights. We've been managing this process thoughtfully in parallel with regulatory milestones and will provide updates on the commercialization strategy by year-end.

Kumar Raja, Analyst

With regard to Ovaprene, how are you thinking in terms of expectations for the pivotal trial? What are your thoughts on potential exclusion criteria?

Sabrina Martucci Johnson, CEO

For the pivotal trial, we expect to achieve typical use effectiveness rates of 86% to 91%. We are currently developing the criteria for inclusion and exclusion based on standard practices in contraceptive studies. Well, thank you, everyone, for taking the time this afternoon for the call for the great questions. We appreciate your interest in our updates and our commitment to improving health outcomes for women. 2021 is a significant year for Daré, with many meaningful developments already realized and others on the horizon. We look forward to keeping you updated on our progress as we work towards our objectives.

Operator, Operator

And that concludes today's conference. Thank you all for joining. You may now disconnect.