Dare Bioscience Inc (DARE) 2023 Q3 法說會逐字稿

Welcome to the conference call hosted by Daré Bioscience to review the company's third-quarter financial results and to provide a general business update. This call is being recorded. My name is Chris, and I'll be your operator for today. With us today from Daré are Sabrina Martucci Johnson, President and Chief Executive Officer; John Fair, Chief Commercial Officer; and Lisa Walters-Hoffert, Chief Financial 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 September 30, 2023. Today we will review our third-quarter results and discuss developments and expectations for our pipeline and portfolio.

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 fact 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 September 30, 2023, 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, November 9, 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.

For those of you joining us via webcast, you should be able to access presentation slides from within the webcast module. We've included these slides to provide some additional context to our portfolio that you may find helpful while you listen to the call. The slide deck is also available on the Investor Relations section of our website under Presentations, Events and Webcasts and will remain on the site for two weeks.

As you know, our sole focus at Daré is women's health. Women's health products make up 27% of total blockbuster products while contributing to 35% of total blockbuster sales, and there continue to be many unmet needs in the market. We believe we have an exceptionally strong pipeline of product candidates that positions us well for the short, medium, and long term.

I'm excited to share today the recent strides we've made to advance innovative therapies for women with our most promising near-term opportunities.

Since the beginning of the third quarter, we have had several important achievements. First, we achieved our first commercial milestone for Xaciato, which was the initial shipment of the product associated with the launch. Second, we shared additional positive data from our Phase 2b RESPOND study of Sildenafil Cream, which has the potential to be the first FDA-approved treatment for any form of sexual arousal disorder in women. And third, we made further progress toward patient enrollment for the anticipated start of our pivotal Phase 3 study of Ovaprene, our potentially first-in-class, hormone-free, monthly intravaginal contraceptive candidate.

Overall, we continue to advance our key pipeline programs, each of which, if approved, represents a potential first-line or first-in-category opportunity. Additionally, we are actively engaging our commercialization collaborators, including leading players in women's health, Organon and Bayer, as we steadily execute on our mission to accelerate innovative treatments that women want and need.

I'll now provide an update on our potentially disruptive late-stage candidates, Sildenafil Cream and Ovaprene, then John will provide an update on Xaciato's launch, and Lisa will review our financial results for the quarter ended September 30.

So let's start with Sildenafil Cream, which is our investigational therapeutic candidate to treat female sexual arousal disorder, or FSAD, and female sexual interest arousal disorder, or FSIAD. Last week, we announced additional updates from our Phase 2b RESPOND study results in preparation for our confirmed upcoming end-of-Phase 2 FDA meeting this year.

Sildenafil, which is a PDE5 inhibitor, is the active ingredient in a tablet or for oral administration, currently marketed under the brand name Viagra for the treatment of ED, erectile dysfunction, in men, which was undoubtedly one of the most successful prescription products ever launched.

Our Sildenafil Cream is an investigational proprietary topical treatment cream formulation, specifically designed to be used on-demand at the time of sexual activity to increase blood flow to the genital tissue in women. If development is successful, Sildenafil Cream has the potential to be the first FDA-approved product to treat any form of arousal disorder in women.

Women who experience no or low sexual arousal are bothered by and dissatisfied with their sex lives. They're frustrated with their sexual problems, they experience guilt about their sexual difficulties, and they are likely to feel sexually inadequate, inferior, and embarrassed. Market research suggests that approximately 20 million women in the US aged 21 to 60 experience symptoms of low or no sexual arousal, and approximately 10 million women are considered distressed and actively seeking treatment. We believe this is a promising untapped market, given the numerous equivalent products approved for men, not only Viagra, but also Cialis and Levitra to name a few.

Last week, we announced additional positive data from our Phase 2b RESPOND study of Sildenafil Cream, having completed our study analyses in preparation for our upcoming FDA meeting. Importantly, these additional analyses indicate that we can use our Phase 2b study approach in Phase 3.

Specifically, this means we can propose a Phase 3 study with the same co-primary endpoint structure that we used in Phase 2b, which assesses arousal sensation and evaluates concerns related to the difficulties with sexual arousal; and two, that we can propose that in the Phase 3 study, we evaluate Sildenafil Cream in a broader patient population of women that includes not only women with arousal disorder only, or FSAD, but also those with arousal plus desire disorder, otherwise stated as women with female sexual interest arousal disorder, or FSIAD.

This would be the first-ever Phase 3 pivotal study of a therapeutic candidate for the treatment of arousal disorder in women, and we remain on track for our end-of-Phase 2 meeting with the FDA this year. We look forward to keeping you updated on those developments.

Now I'd like to turn to Ovaprene. Ovaprene is our investigational, potentially first-in-category, hormone-free, monthly, intravaginal contraceptive. We have been working closely with our Phase 3 study collaborator, the National Institute of Child Health and Human Development, or NICHD, of the NIH on the pivotal study planned to start later this year.

The pivotal Phase 3 study of Ovaprene is being supported by NICHD's Contraceptive Development Program, which oversees the Contraceptive Clinical Trials Network, or CCTN, which was established in 1996 to conduct studies of investigational contraceptives like Ovaprene. We remain on track to start enrolling patients this fourth quarter of 2023, and we will issue an announcement after the first patient is enrolled.

As a reminder, this study is a multicenter, single-arm, non-comparative pivotal Phase 3 contraceptive study of Ovaprene to evaluate its effectiveness as a contraceptive, along with its safety and usability. Based on our communications to date with the FDA, if successful, we believe that only this single registration study will be required to support a premarket approval application submission with the FDA.

We believe Ovaprene has the potential to be a disruptive product in the contraceptive category and potentially life-changing for women who cannot take hormone-based therapies, such as some cancer patients, or those who would prefer not to do so. In fact, survey data indicate that nearly 85% of women would prefer a monthly option with a lower hormone dose than the oral birth control pill.

In addition to providing innovation as a nonhormonal contraceptive, the clear differentiation and disruptive potential of Ovaprene is in its convenience and potential efficacy. Its convenience includes easy monthly use and self-administration without requiring action at the time of intercourse, with target efficacy approaching hormonal birth control methods.

There are currently no FDA-approved monthly hormone-free contraceptives. And based on market research, approximately 35 million women in the US are potential candidates for Ovaprene. We see parallels to NuvaRing when it entered the market as the first monthly intravaginal hormonal contraceptive, and to Mirena when it entered the market as the first hormone-releasing intrauterine system. And Bayer, which commercializes Mirena, is a leader in commercializing contraceptive products in the United States, and they hold the US commercial rights to Ovaprene under a license agreement with us.

In summary, I am very excited about the progress we've made on our late-stage programs since our last call in August. As the only company solely focused on developing women's health products, Daré is developing first-in-category products. Our investigational products are some of the most potentially disruptive candidates for women in decades, and we collaborate with leading companies to commercialize and deliver these treatments to as many women as possible. And as you'll hear from Lisa later on this call, we do all of this with thoughtful and efficient capital deployment and leveraging nondilutive sources of capital wherever feasible.

I'll now turn it over to John to provide a commercial update on the Organon Xaciato launch, as well as Ovaprene's pre-commercialization activities underway in collaboration with Bayer.

Thank you, Sabrina. As a reminder, Xaciato, clindamycin phosphate vaginal gel, is a lincosamide antibiotic for single-dose vaginal administration indicated for the treatment of bacterial vaginosis, or BV, in female patients 12 years of age and older in the United States. As many of you know, Organon recently launched Xaciato. The product is in the channel as of last month, and the initial focus in Q4 is on high BV prescribers in the US aligned to end-of-year product availability in select retail pharmacies.

As we have communicated on previous calls, Organon's go-to-market strategy leverages the knowledge and experience of the established NEXPLANON commercial team. Organon believes there is a roughly 95% overlap of healthcare providers who prescribe their contraceptive product, NEXPLANON, that also have the potential to prescribe Xaciato based on provider treatment patterns.

And to drive product pull through, their skilled market access team is meeting with customers to review Xaciato. Because of the strong relationships the Organon sales team has with these healthcare providers, we expect them to be well positioned to detail Xaciato.

Looking ahead to our Phase 3 trial initiation for Ovaprene, we are excited to begin Phase 3 study activities with our US commercial collaborator, Bayer. In parallel, our team has been collaborating with Bayer on key downstream commercial initiatives intended to ensure a seamless transition from clinical development to commercial introduction. These activities will help set the foundation to maximize the value of this disruptive technology.

With that, I'll turn the call over to Lisa.

Thank you, John, and thanks, everyone, for joining us today. I would now like to summarize Daré's financial results for the third quarter of 2023.

For those of you who are newer to the story, Daré's business strategy is to assemble in advance a portfolio of differentiated product candidates that address meaningful unmet needs that 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 the portfolio includes corporate overhead, portfolio acquisition and maintenance costs, and of course, the ongoing research and development, or R&D expenses.

So during the third quarter of 2023, our general and administrative, or G&A, expenses were approximately $2.7 million, unchanged from G&A expenses recognized during the third quarter of 2022. Our R&D expenses, which vary from period-to-period based on clinical, preclinical, manufacturing, regulatory, and other activities across our entire portfolio were approximately $6.7 million and primarily reflects the costs related to the Sildenafil Cream Phase 2b clinical trial, and manufacturing and regulatory affairs activities related to Ovaprene's planned Phase 3 study.

While my comments are focused largely on our expenses, I should note that during the third quarter, we also recognized license fee revenue of $1 million under our global license agreement with Organon. Our comprehensive loss for the third quarter was approximately $8.3 million. We ended the third quarter with approximately $13.9 million in cash and cash equivalents. And as of November 8, we had approximately 98.6 million shares of common stock outstanding.

So moving to the fourth quarter of 2023. Under our license agreement with Organon, we will receive a $1.8 million commercial milestone payment as a result of the first shipment of Xaciato in connection with its launch in the US during the quarter. Thereafter, we will receive tiered double-digit royalties based on net sales, as well as additional potential milestones of up to $180 million over time.

Now that the sales efforts have commenced by Organon, Daré will begin to recognize estimated revenues in our financial statements, reflecting the royalties from Xaciato's net sales. It goes without saying that we at Daré are thrilled that Xaciato is now available in the US, and I look forward to reporting on Xaciato's progress in the months ahead for all Daré stakeholders.

I started my remarks with a review of our business strategy, so it now feels appropriate to take a moment and review our financial strategy. Since our inception, we have made fiscal responsibility a top priority, maintaining a lean and focused team and managing our overhead costs closely. In the current challenging market, we have reduced costs, and are exploring additional opportunities to reduce costs when appropriate and where appropriate, but seeking to do so without compromising our focus on investing and cultivating our leading product candidates.

We are looking at a wide range of opportunities to fund our high-quality portfolio, including more creative and innovative vehicles that other companies may not have access to. Based on conversations to date, we've been buoyed by the depth and advancement of our portfolio and our pipeline, and we are actively pursuing options to raise capital.

As we've said previously, and as Sabrina just noted, we will endeavor to be creative, collaborative, and opportunistic in seeking the capital needed to meet our objectives and to build shareholder value. Again, as a reminder, these include, but are not limited to, non-dilutive grants similar to those that we have obtained to finance many of our preclinical programs, equity sales, license agreements, structured financings, and strategic collaborations and alliances.

We have explored and will continue to explore a variety of options to fund our operations, advance our candidates, monetize the value of our assets, and build shareholder value. We encourage investors to read the more detailed discussion of our financials, financial condition, liquidity, capital resources, and risk factors in our Form 10-Q for the quarter ended September 3, 2023, which was filed today, as well as in our annual report on Form 10-Q for the year ended December 31, 2022, which was filed on March 30, 2023.

I would now like to turn the call over to the operator for Q&A.

(Operator Instructions) Catherine Novack, JonesTrading.

Hi, good afternoon. Thanks for taking my questions. A couple on Ovaprene. First is, do you plan to issue periodic updates regarding enrollment? And is it possible that we might expect to see updates on some of the efficacy endpoints potentially before the top-line data readout?

Hi. Thank you for the great questions, and thanks for asking about Ovaprene. Obviously very excited that the study's starting.

In terms of providing updates, that definitely is our intention. As a reminder to people, the study duration is 13 cycles, which is about 12 months. So that's how long the women in this study will be using Ovaprene over the course of that period. And as we've guided in terms of how long the study will take beyond that, it really comes down to the enrollment rate.

So we do really want to keep people informed as the study progresses, so that's definitely our intent. But the first announcement you'll get is that first patient enrolled, and then we do intend to keep people updated as enrollment progresses, as we have information that is suitable for that.

And in terms of providing data updates, that's really a fantastic question as well. Because as you probably noted in the comments, it is a non-comparative study, which means everyone's on Ovaprene. Everyone gets Ovaprene in the study. And in contraceptive studies, you're looking at pregnancy rates over time.

Having said that, right now, there's not necessarily a plan to disseminate any data before the study is completed. However, that is something that certainly we are discussing with our collaborators at the NICHD, who are collaborating with us on the study, in terms of the merits of doing that and whether or not there might be a situation where that makes sense. So we will keep you posted on that as well.

Great. And can you remind me the estimated cost of this Ovaprene study and to what extent it's already funded in some part by NICHD?

So just as a reminder for everyone, and thank you for asking the question so that we can do that, because it's kind of a nice position to be in to have a Phase 3 study starting that actually we already paid for.

And so the way the collaborative research agreement works with the NICHD is we have already provided, into an account basically under that [creta], $5 million towards the cost of the study. And then obviously, the NICHD is providing resources as well to cover the cost of the study. And right now, we're working through the Contraceptive Clinical Trial Network, which is the 20 sites that the NICHD works with on these types of studies.

And so that's -- those costs and our funding to the NIH was really based on our determination with them and our CRO partner that they work with on these studies in terms of the anticipated cost and needs of the program. Obviously, there's always a potential for us to provide additional funding under circumstances, for instance, if we felt we wanted to add sites or things like that. But right now, the study is funded for what is planned currently. It's obviously underway.

And based on the funding that's been provided, and also just the way the NICHD does their contracts, that really even -- and we actually touched on this in our 10-Q related to questions we might get about what happens if there's a government shutdown -- even just the way they do their contracts, it kind of obligates the funds out till through the third quarter of next year. So that's the plan right now with the study.

Okay. That's helpful. And then if I can just get in one more on Sildenafil Cream. So you're moving this product into pivotal studies. Are you considering partnerships, as you did with Ovaprene, Xaciato, either regional or US-based? And at what point do you think it makes sense to start having those partnering discussions?

Yes. So as we noted upfront, we're very proud that we are in collaboration with some of the leaders in women's health, including Organon and Bayer. And as you noted, we've entered into those partnerships in different times to different programs.

So with Ovaprene, as you noted, we entered into that collaboration before the Phase 3 trial, whereas with Organon on Xaciato, we entered into that collaboration after that product was taken all the way through registration. Every product is different, obviously, or I hope it's obvious given everything we've talked about today. Sildenafil Cream is a very interesting program. There's nothing approved for female sexual arousal disorder.

And so, given that, it's an interesting program. There's a lot of interest in the program from a lot of different stakeholders. As a company, we always look at what makes the most sense in terms of, ultimately, where can we build the greatest value for shareholders, which I am myself a shareholder as well, so we look at all the different aspects and possibilities.

And so as you've seen historically, we've considered partnerships at different times in the trajectory of that program. As Lisa commented, strategic partnerships are certainly a non-dilutive way of funding certain activities, but we've also very much had a practice of we don't talk about those things in advance. When the time is right, and that partnership is in place, and it makes sense, then we will talk about it. But we obviously consider all the possibilities for every program, and really look at all the ways that we can fund our portfolio to build value.

And with something like Sildenafil Cream, given it's a first-in-category product and there are no FDA-approved treatments, there's interest in a program like that. So what's nice about that, I should stress, is it puts Daré in a nice position of being able to think about what makes sense for Daré and our shareholders.

Got it. That's very helpful. Thank you. And thanks so much for taking my questions.

Absolutely.

Douglas Tsao, H.C. Wainwright.

Sabrina, along those lines of Sildenafil Cream, in terms of seeking a partner, have any of the stakeholders that you've spoken with expressed interest in having a voice in helping design the Phase 3 program? Because obviously, it is such a novel program, and it's a clinical development program that could go in a lot of different directions.

Yes. Another great question. So if I may take a step back on the Sildenafil Cream program because I think as many people know, and I know you know in particular, Doug, like this is the first, right? The Phase 2b trial was the first-ever study of its kind conducted in this patient population.

And as a result, Daré had to do a lot of work to work really closely with the FDA on the design of this study, and with a lot of the thought leaders in the field of sexual health to really think about what are the endpoints, what is the patient population, how do we categorize them in this exploratory study so we could come out the other end the way we have, which I couldn't be more thrilled, to have come out the other end of it with basically now having really defined the patient population and the study endpoints that we can take forward into the Phase 3 and have the Phase 2b really be a roadmap for that.

And I say all of that to say, really, in the field of women's health and women's sexual health, quite frankly, Daré is seen as very much the thought leader in this area. And I will say, every organization who has thought about sexual dysfunction in women, and particularly arousal disorder and Sildenafil Cream specifically, has certainly looked to Daré as the leader in this area, in the work we've done already with the FDA, and then the work that we've done with all of the thought leaders to prepare for this end-of-Phase 2 meeting and design a Phase 3 program that makes sense.

So not to say that companies may or may not want to have a say in what that development program looks like, but I think it's really wonderful to be in a position where we're able to say, and not in a boasty way, but just state reality, we've done more work in this therapeutic category than anyone has and we're very much seen as the experts and the leaders.

Great. That's really helpful. And, Sabrina, I guess on Ovaprene, obviously, primary endpoint is basically just preventing pregnancy. Are there any other endpoints in the study that we should be focused on? Thank you.

Thanks for asking that. Now, this is why -- we did a lot of work with Bayer in the design of the study. And as you know, contraceptive trials on the one hand, it's very cut and dry. I mean, you're looking at whether or not someone gets pregnant.

But because Ovaprene is such an innovative, disruptive technology, there are a number of things that we and Bayer aligned on, that we would also be collecting in this study, in terms of just the -- her experience with the product. And so questions really around things that are captured on electronic diary, around her experience with the product, her use of the product, so that we have those insights.

And then additionally, because it's a once-a-month product, again, similarly, there are aspects of that that we're hoping to collect in the data from the trial, again, kind of related to that experience perspective as well as safety. There are a number of safety endpoints in this study as well to really demonstrate kind of the convenience and safety of using a product of this nature.

So when we ultimately do report the findings, it will be very much, as I alluded to in my comments, absolutely, it's about efficacy. But we have also worked very closely with Bayer to make sure in this study that we're collecting a lot of really useful, and to John's point about commercialization, useful data around usability and the patient's -- sort of her experience with the product.

Okay. Great. Thank you so much.

Yes.

We have no further questions at this time. I'll turn it back to Ms. Johnson for any closing remarks.

Great. Well, thank you. Thanks, everyone, for taking the time this afternoon. I know it's a busy time of year, earnings season, so I appreciate you dialing in to hear about our recent updates and our ongoing commitment to drive value for all of Daré's stakeholders by addressing unmet needs in women's health.

And as you heard today, we are prioritizing women's health and well-being by working to expand treatment options where none exist, or improve the current standard of care to address persistent unmet needs. We're working closely with our collaborators, including the leading players we talked about today in women's health, Organon and Bayer, to bring these treatments to women around the world who need them.

And ultimately, we believe we are uniquely positioned to improve quality of life for millions of women. We look forward to keeping you updated on our progress towards the milestones we discussed today. Thank you so much.

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