Dare Bioscience, Inc.

Welcome to the conference call hosted by Daray Bioscience to review the company's financial results for the quarter ended June 30, 2020, and to provide a general business update. This call is being recorded. My name is Chris, and I'll be your operator today. With us today are Sabrina Martucci Johnson, Daray's President and Chief Executive Officer, John Fair, Daray's Chief Strategy Officer, and Lisa Walters-Hofford, Daray's Chief Financial Officer. Ms. Johnson, please proceed.

Thank you. Welcome to our financial results and business update call for DARE Bioscience. We're looking forward to discussing our second quarter results and highlighting recent developments and anticipated milestones for the remainder of 2020 and beyond. 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 unknowns. and Noun, Risk and Uncertainties, and so therefore 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 31st, 2019, which was filed on March 27th, 2020, and our quarterly report on Form 10-Q for the quarter ended June 30th, 2020, 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, August 12, 2020. DARE takes no obligation to update any forward-looking statements to reflect new information or developments after this call, except as required by law. As you know, DARE is a leader in women's health innovation, and we're squarely focused on improving the life and well-being of women. Our value creation strategy is to accelerate 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 with clinical stage programs in contraception, vaginal health, and sexual health. Our contraception pipeline includes our novel contraceptive candidate, Oviprene, and Investigational Hormone-Free Monthly Vaginal Contraceptives. It's under a license agreement with Bayer, a world leader in the branded contraceptive market. It includes DARE LARC1, a potential first in category long-acting user-controlled contraceptive, the development of which has received substantial funding from the Bill and Melinda Gates Foundation. It also includes DARE RH1, a novel contraceptive target that has the potential to be the first contraceptive solution that can be used by women and men, and ORB204214, potential 6- and 12-month injectable contraceptives. Contraception, as you may know, is one of the largest categories in women's health, accounting for over $5 billion in prescription sales in the U.S. alone. In addition to our contraceptive pipeline, we are developing a potential new first-line option for the more than 20 million women in the U.S., Estimated to be affected by bacterial vaginosis, a persistent and serious infection that is not adequately addressed by currently available therapies. Our product candidate, DARE-BV1, currently in a Phase III clinical trial with anticipated top-line readout this year, has the potential to deliver a meaningful improvement in the clinical cure rate over the current FDA-approved products. and our potential first in category Sidenafil cream program is the only program to our knowledge being developed to address female sexual arousal disorder or FSAG, the most analogous to the female sexual dysfunction disorders to erectile dysfunction in men. And the estimated FSAG market is expected to be as significant if not more so as the erectile dysfunction market in both the US and the rest of the world. In terms of near-term anticipated value drivers, we are currently conducting two clinical studies and anticipate having top-line data readouts each year for the next three years across four different indications with four unique product candidates. And we've maintained the pace of our product development and regulatory activities necessary to remain on track to achieve key clinical and regulatory objectives that we have previously disclosed. Now, with all life science companies, we continue to monitor the impact of the COVID-19 pandemic on our general business operations and our anticipated clinical and regulatory milestones. To date, though, we have been able to recalibrate our activities to better align with the limitations of the current environment, enabling us to continue to advance our clinical stage programs. Namely, we commenced two clinical trials this year, that we felt were the most conducive to run during the restrictions that COVID-19 imposes on in-person visit frequency and study contact. Specifically, in June, we initiated that pivotal phase three clinical trial of DRBV1 for the treatment of bacterial vaginosis. As I mentioned previously, bacterial vaginosis is a condition estimated to impact over 20 million women in the U.S. alone. and this phase three trial is assessing DERBV1 as a potential new treatment for this acute infection for which women are not postponing care according to our study investigators and thus we initiated the study and remain on track to report the study's top line results by the end of this year. DERBV1 is a novel thermosetting bioadhesive hydrogel containing clindamycin phosphate 2% and it's being developed as a one-time vaginal administration for the treatment of bacterial vaginosis. As we previously reported, data from an investigator-initiated proof of concept study demonstrated a clinical cure rate of 86% of available subjects in that study at the test of cure visit that occurred seven to 14 days after a single administration of DRBV1. In comparison, currently marketed FDA-approved products for the treatment of bacterial vaginosis have clinical cure rates ranging from mid-30s to high-60s on a percentage cure basis. If DARE BV1 delivers a similarly high clinical cure rate in the Phase III pivotal study, we believe DARE BV1 could become a new frontline treatment option for women diagnosed with bacterial vaginosis. DER-BV1 received both fast-track and qualified infectious disease product designations from the FDA for the treatment of bacterial agenosis. A drug that receives fast-track designation is eligible for more frequent meetings with the FDA to discuss the drug's development plan and ensure collection of appropriate data needed to support drug approval. More frequent written communication from the FDA about such things as the design of the clinical trials and eligibility for accelerated approval and priority review if relevant criteria are met. Turning to another candidate we believe will be a value driver, in July we announced that we initiated our Phase I clinical study of DARE-HRT1, a novel intravaginal ring designed to deliver non-oral bioidentical hormone therapy for the treatment of menopausal symptoms. DER-HRT1 is designed to deliver bioidentical estradiol and bioidentical progesterone continuously over a 28-day period, and it's being developed as a potential new option for hormone therapy for the treatment of vasomotor symptoms, commonly called hop flashes, and the genitourinary symptoms of menopause to prevent bone loss and fractures associated with menopause. More than 45 million women in the U.S. are approaching or are in menopause. The North American Menopause Society, or NAMS, which is known for its thought leadership and evidence-based menopause treatment guidelines, supports the use of hormone therapy in peri- and postmenopausal women and recommends administering both estrogen to reduce symptoms and progesterone to prevent thickening of the uterine wall and observes that non-oral routes of administration may offer advantages over orally administered therapies. DARE-HRT1 has the potential to be the first FDA approved intravaginal ring or IVR product to meet the NAMS guidelines. We believe the phase one study of DARE-HRT1 will provide important scientific information for both DARE-HRT1 but also for DARE-FRT1, which is another candidate in our portfolio which utilizes that same IVR technology as DARE-HRT1 and that same bioidentical progesterone as an active ingredient. Specifically thus, this phase one study will evaluate the ability of DER-HRT1 to achieve its target dual release objectives, as well as the ability of the IVR technology to release two different actives at two different rates. But in addition, we anticipate collecting useful pharmacokinetic characteristics of the bioidentical progesterone alone, which can be expected to directly apply to DER-FRT1. which is our bioidentical progesterone-only IVR that we are developing as part of an in vitro fertilization regimen, soluteophase support, as well as a more convenient treatment option for prevention of preterm birth. The Phase 1 study of DARE-HRT1 is being conducted by our wholly-owned Australian subsidiary at specialty women's health sites in Australia. Lisa is going to provide an overview on the Australian Tax Incentive Program, for which our subsidiary will apply, for cash payments for eligible study expenses, which will offset costs of the program. We expect to report the top-line data from this study in the first half of 2021. Turning now to our sidenafil cream and oviprene studies, We believe we will be in a position to commence both of these studies in 2021 and still maintain our prior guidance with respect to top-line data readouts for those programs. Specifically, for our Sudentifil Cream program, we expect to report top-line results of the planned Phase 2b study in 2021. You may recall that we announced in December of 2019 the important alignment we reached with the FDA on the Phase 2b study design, and the novel patient-reported outcomes, which I'll refer to as PRO, instruments should be measured to assess the achievement of the primary efficacy endpoints. Sivetafil cream 3.6% has the potential to be the first FDA-approved product for female sexual arousal disorder. So as I mentioned earlier, FSAD is the female sexual dysfunction disorder most analogous to erectile dysfunction in men. and Sidenafil is the active ingredient in a tablet for oral administration currently marketed under the brand name Viagra for the treatment of erectile dysfunction in men. Our Sidenafil cream is a topically administered formulation of that same Sidenafil, which means that active ingredient is delivered in a cream formulation that is applied locally by women to the genital tissue. It's designed to increase local blood flow, and thereby improve that general arousal response using that same pathway that's active in erectile dysfunction medications for men. While the oral version of Sidenafil is effective for men, the side effects associated with the oral formulation are particularly challenging for women and therefore oral delivery is not an optimal way to achieve that same arousal response in women. So with the potential to deliver Sidenafil in a fast-acting cream, that can be applied locally. The formulation has been designed to offer those same benefits, so that increased blood flow and improvement in that general sexual arousal response without the systemic issues observed with the oral formulation. As I also mentioned, we believe the FSAD market is as big or bigger than the erectile dysfunction market. Market research suggests that 33% of women in the U.S., ages 21 to 60, experienced symptoms of low or no sexual arousal, and 16%, which is approximately 10 million women in the US, are distressed and are seeking a solution to improve their condition. To put the market opportunity for an FDA-approved FSA-D treatment in context, The prevalence for the male version erectile dysfunction is estimated to be just 5% of men age 40, increasing to just about 15% at age 70. The planned Phase IIb study of sedentifil cream will utilize that agreed-upon PRO instrument to measure achievement at the primary efficacy endpoints, namely improvement of localized general sensations of arousal and reduction in distress that women with FSAD experience. We continue to focus our efforts on preparing to initiate that Phase 2B study, such as preparing the electronic diary and conducting other startup activities, as well as other non-clinical activities to support that future NDA submission. As I noted, the Phase 2B study is designed to evaluate sedentary cream versus placebo over a 12-week dosing period by study subjects in their own home setting, and that'll follow both a non-drug and a placebo run-in period. And as I mentioned earlier, we expect to report top-line results of the study by year-end 2021. And we expect to report top-line data for our planned pivotal study for oviprene by year-end 2022. Oviprene, as I mentioned up front, is our investigational hormone-free monthly vaginal contraceptive currently in clinical development for the prevention of pregnancy. If approved, it could be the first monthly non-hormonal contraceptive product. And earlier this year, Bayer, the marketers of the billion dollar global Mirena franchise, and DARE announced our license agreement under which Bayer can exclusively commercialize oviprene in the United States upon the satisfaction of certain conditions in the agreement. which include a $20 million payment to us by Bayer, payable at Bayer's sole discretion, following the completion of our pivotal trial of Oviprene. Under the license agreement, we're also eligible to receive up to $310 million in commercial milestone payments, plus tiered royalties on net sales in the double digits. Bayer is supporting our development and regulatory process for Oviprene, providing internal experts and an advisory capacity. These resources have already added value to the planning and implementation of the oviprene clinical regulatory manufacturing and pre-commercialization planning workstreams. More information about the terms of the agreement can be found in our filings with the SEC. We believe the licensing agreement with Bayer is validation of our broader strategy and certainly confirmation of oviprene's market potential as the first monthly non-hormonal contraceptive product. Bayer is committed to bringing to market innovation in women's health and they're the only company, as I mentioned, to have built a contraceptive brand family in excess of a billion dollars. With regards to oviprene, over the next several months we intend to continue the regulatory manufacturing and non-clinical activities needed to advance the programs. We've been using the last several months truly to align with the FDA on the development plan and the submission strategy and we're going to continue to utilize the next several months to on-go and keep on-going those discussions to leverage this pre-submission process with the FDA and continue those discussions as we prepare to file an investigational device exemption application or IDE for oviprene. In light of these discussions and our intent to commence enrollment in the Pivotal Contraceptive Effective and Safety Study of Oviprene in 2021, Our plan is to file the IDE next year, and then pending FDA's review and clearance of the IDE, we would plan to go ahead and initiate the study before year-end 2021. That supports, that timeline supports, a top-line data readout by year-end 2022, as we have guided. And if successful, we expect that study's data to support marketing approvals for oviprene in the U.S., Europe, and other countries worldwide. We believe that the variety of our programs and the diversity of our women's health indications and development stages enable us to direct our resources and our investment across the portfolio in ways that allow us to advance our programs as we have continued to do in this challenging environment. Of course, we recognize that the COVID-19 pandemic and the restrictions put in place to slow its spread have the potential to disrupt our business and increase anticipated development costs and timelines for our product candidates, and will therefore continue to closely monitor the rapid evolving circumstances. Currently, however, we remain on track to deliver the top line clinical results as we have guided, as well as the regulatory milestones on the target timelines we've just discussed. We believe our financing strategies, such as our at-the-market program and the equity line established earlier this year, together with the flexibility in capital allocation afforded by our business model, provide optionality on how and when we raise capital that supports and aligns with enhancing shareholder value. Further, we expect the pricing structures and dedicated staff and expertise in clinical development of women's health products provided under our agreement with the contract research organization health decisions that we announced in May will continue to support acceleration of clinical development of our reproductive health assets in a capital-efficient manner. And with that, I'll now turn the call over to John to provide a business and a corporate partnership update.

Thank you, Sabrina, and good afternoon, everyone. I'm pleased to provide you with a brief update on our ongoing alliance with Bayer to support the continued development of Overbrain for its first in category contraceptive potential. The relationship continues to be highly productive and value-additive, and our collective teams have achieved alignment across key areas, including clinical, non-clinical, and regulatory work streams. Bayer, as we've mentioned, is a worldwide leader in branded contraceptive sales and marketing, and their insights and expertise, as applied to Overprint, continue to be invaluable, in our opinion. And those of you familiar with our story know that partnerships and outlicensing transactions are core to our model. We remain very encouraged by the level of interest in our portfolio, and we continue to proactively pursue meaningful partnership opportunities with well-established and emerging companies, both in the U.S. and global, that are focused on delivering new innovation to women. Naturally, we have more to say if and when agreements are executed, but I want to highlight at this time that this is a priority focus for our company, and we are actively exploring partnerships that we believe will allow us to efficiently advance the portfolio and achieve the broadest commercial access opportunity possible, while at the same time maximizing shareholder value. With that, I will turn it over to Lisa to give you a financial update.