Dare Bioscience, Inc.

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

Thank you. Welcome to our financial results and business update call for DARE Bioscience. We are looking forward to discussing our third quarter results, reflecting on some important achievements to date in 2020, highlighting anticipated developments and milestones for the remainder of 2020, and providing some perspective regarding our plans for 2021. But before I 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 annual report on Form 10-K for the year ended December 31, 2019, which was filed on March 27, 2020, and our quarterly report on Form 10-Q for the quarter ended September 30, 2020, 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 12, 2020. DARI undertakes no obligation to update any forward-looking statements to reflect new information or developments after this call, except as required by law. Now, as you know, DARI 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 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 four clinical stage programs in vaginal health, sexual health, contraception, and menopause. As we approach the end of 2020, we are particularly looking forward to our phase three top line data readout for our DARE BV1 program this year. DARE-BV1 is our potential new first-line option for bacterial vaginosis, a serious condition that is estimated to affect approximately 21 million women in the U.S. alone. Many of the existing therapies are considered to be less than adequate, and DARE-BV1 has the potential to deliver a meaningful improvement in the clinical cure rate over the current FDA-approved products. We are excited to report that enrollment in the Phase III study was completed last month. and all subjects have also completed their last visit. We therefore expect to announce top-line data before the end of this year. During today's call, we will provide additional context on the upcoming DRBv1 Phase III readout, as well as next steps toward regulatory submission and the partnering strategy to support eventual market introduction and commercialization. We will also provide updates on activities to support ongoing development of our novel contraceptive candidate, oviprene, and investigational hormone-free monthly vaginal contraceptive under a license agreement with Bayer, a world leader in the branded contraceptive market. And we'll discuss activities we plan to commence in 2021, including the Phase 2B for our potential first-in-category Sidenafil cream program, which is the only program to our knowledge being developed to address female sexual arousal disorder, or FSAD, the most analogous of the female sexual dysfunction disorders to erectile dysfunction in men. Before we provide updates on our anticipated near-term value drivers, including those regulatory and corporate partnering milestones, as well as planned top-line data readouts occurring each year for the next three years across several product candidates, we do want to spend a moment reflecting on the accomplishments to date in 2020. 2020 has been quite a year of firsts for all of us, but for DARE, we achieved a number of important firsts that we believe serve as validation of our strategy, and our forward-looking opportunities. We started the year in January by announcing our first commercial partnership agreement. Specifically, Bayer, the marketers of the billion-dollar global Mirena contraceptive franchise, and DARE announced a license agreement under which Bayer can exclusively commercialize oviprene, our potential first-in-category contraceptive investigational product, in the United States upon the satisfaction of certain conditions in the agreement. which include a $20 million payment to us by Bayer, payable in Bayer's sole discretion, following the completion of a pivotal trial of Obaprene. 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. To our knowledge, the transaction we entered into with Bayer represents the largest such transaction for any development stage contraceptive in terms of the aggregate disclosed milestone value. We believe the transaction validates not only the Obaprene commercial opportunity, but also DARE's business model of strategic partnerships to provide capital and achieve commercial objectives. Shortly after the start of the year, as with all life science companies, we had to contend with the impact of the COVID-19 pandemic on our general business operations and our anticipated clinical and regulatory milestones. However, we were fortunate in that we were 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 towards the target top line data readouts previously projected. As a result, in June, we commenced our first phase three trial at DARE, which is a major milestone on its own. And we're excited to confirm that we expect to have that top line data readout from the DARE BV-free trial, our pivotal study of DARE BV-1 for the treatment of bacterial vaginosis this year, per our previous guidance. Assuming a positive outcome, we believe the DARE BV-free phase three study positions us for a new drug application or NDA submission in the first half of 2021, and potentially also regulatory action in late 2021. We were also able to advance another novel program into the clinic during 2020, our DARE HRT1 program, which utilizes our innovative vaginal ring technology originally developed at MIT and offers a potentially new and more convenient way to address the vasomotor symptoms associated with menopause. In the U.S. alone, more than 45 million women are estimated to be approaching or are in menopause. We're excited to share with you that we have been successfully enrolling patients into our DARE HRT1 Phase 1 study, utilizing a cost and time efficient strategy that leverages our subsidiary in Australia, and thus our eligibility to receive R&D tax incentives in the form of cash payments for conducting the clinical research in Australia. We started this study, our first phase one in Australia through our subsidiary, in July, and we expect to have top-line results in the first half of 2021. If successful, this study could provide important clinical data, not only for the DARE HRT1 product candidate as a potential treatment for the vasomotor symptoms of menopause, as I mentioned, but also for DARE FRT1, which utilizes the same vaginal ring technology and also delivers bioidentical progesterone. As you may recall, we're developing DARE-FRT1 as a more convenient treatment option for the prevention of preterm birth and broader luteal phase support as part of an in vitro fertilization regimen. Another exciting development for DARI was announced in August when we announced we received a notice of award for a grant from the Eunice Kennedy Shriver National Institute of Child Health and Human Development, a division of the NIH, to support that phase one clinical study of DARE-FRT1. NIH funding is awarded in phases, so the NICHD award granted to date is approximately $300,000, and then we may be eligible to receive an additional award for the next segment of the project outlined in our grant application for up to a total of approximately $2.3 million in grant funding to support that DARE-FRT1 Phase I Human Clinical Study. And in line with our non-dilutive funding strategy in 2020, we also announced in 2020 the receipt of a total of $2.4 million in funding under the current grant for our user-controlled, long-acting, reversible contraceptive program, DARE-LARC1, from the Bill and Melinda Gates Foundation. DARE-LARC1 is potential breakthrough technology as the first long-acting, user-controlled, reversible contraceptive solution And it's been supported by approximately 20.5 million in grant funding from the Bill and Melinda Gates Foundation to date. Thus, if I were to sum up the year 2020, 2020 has been a year of firsts and a year of important milestones for DARE, as highlighted in the partnerships, the study initiations, the non-dilutive capital accomplishments that we have been talking about. And we look forward to continuing that momentum in 2021. With that said, I'd like to provide some perspective on what we expect in 2021. First, as I mentioned, there are a number of important milestones associated with the DARE BV1 program. So DARE BV1, which is designed as a one-and-done vaginal administration of 2% clindamycin phosphate in a novel thermosetting hydrogel formulation, has the potential to deliver a meaningful improvement in the clinical cure rate over the current FDA-approved products for bacterial vaginosis. As we previously reported, data from an investigator-initiated proof-of-concept study demonstrated a clinical cure rate of 86% of valuable subjects in the study at the test of cure visit that occurred at day 7 to 14, days after that single administration of DRBB1. In comparison, the currently marketed FDA-approved products for the treatment of bacterial vaginosis have clinical cure rates ranging from the mid-30s to the high 60s on a percentage cured basis. If DARE-BV1 delivers a clinical cure rate in the Phase III pivotal study that demonstrates superior efficacy compared to that current standard of care range of mid-30s to high-60s, we believe DARE-BV1 could become a new frontline treatment option for women diagnosed with bacterial vaginosis. Importantly, DARE-BV1 received both fast-track and qualified infectious disease product designations from the FDA for the treatment of bacterial vaginosis. We plan to request a pre-NDA meeting with the FDA for early 2021, such that we can submit that NDA in the first half of 2021, assuming the DARE-BV-free study is successful. Given that we have that fast track and qualified infectious disease product status, the NDA should be eligible for priority review, which, if granted, would allow for a 2021 PDUFA date and, assuming approval, an early 2022 commercial launch in the U.S. Given the prevalence of bacterial vaginosis and the potential benefits of the DARE BV1 treatment compared to the current standard of care, we are pleased with the partnering prospects and structures being contemplated for eventual commercialization. We've always planned to partner this program post the phase three study to have the ultimate optionality on deal structure. John is going to provide additional insights on how we're approaching the process to capture maximum strategic value for our shareholders. But I want to take this moment to thank our investors for supporting us and putting us in this position to complete the Phase III study and exercise this optionality that partnering on the heels of those data provide. We also anticipate important milestones for our sidenafil cream and oviprene programs in 2021. In the first quarter of 2021, we anticipate commencing the Phase IIb study for sidenafil cream. positioning us for a potential top-line data readout of that Phase IIb study by the end of 2021. Our potential first-in-category sedentafil cream program is the only drug product to our knowledge being developed to address female sexual arousal disorder, or FSAD. And the potential FSAD market is estimated to be as significant, if not more so, as the erectile dysfunction market in the U.S. Sidenafil cream, as I mentioned, has that potential to be the first FDA-approved product for female sexual arousal disorder. And being the most analogous condition to erectile dysfunction in men, we've selected Sidenafil, which is the active ingredient in tablets for oral administration currently marketed under the brand name Viagra for the treatment of erectile dysfunction in men. Market research suggests that 33% of women in the U.S. ages 21 to 60 experience symptoms of low or no sexual arousal, and 16% are distressed and are seeking a solution to improve their condition. Let's put that in perspective. In the context of erectile dysfunction, the prevalence of complete erectile dysfunction is estimated to be only 5% of men at age 40, increasing to only about 15% at age 70. The other phase three candidate in our portfolio is oviprene. We expect to commence our oviprene pivotal study by year end 2021, which should position us to report top line data for that pivotal study by year end 2022. As I mentioned, oviprene is an investigational hormone-free monthly vaginal contraceptive currently in development for the prevention of pregnancy. If approved, it could be the first monthly non-hormonal contraceptive product. with the potential to offer a new and compelling option for the ever-increasing number of women seeking more reliable, convenient, and hormone-free and monthly contraceptive solutions. Worldwide sales of the first monthly hormonal contraceptive product, NuvaRing, were $879 million for 2019. Over the next several months, we intend to continue regulatory manufacturing and non-clinical activities to advance that oviprene program. We've been using the last several months to align with the FDA on the development plan and submission strategy, and we'll continue to utilize the next several months to leverage that pre-submission process with the FDA to continue those discussions and prepare to file an Investigational Device Exemption Application, or IDE, for Obaprene in the second half of 2021. Pending the FDA's review and clearance of the IDE, we plan to initiate that pivotal study by year-end 2021, as I mentioned, to support that top-line data readout by year-end 2022. If successful, we expect this one study's data to support the marketing approval for oviprene in the U.S., as well as countries outside the U.S. as well. In addition to the late-stage programs already mentioned, DERBV1, sidenafil cream, and oviprene, In 2021, we also anticipate that top-line readout for our Phase 1 study of DARE HRT1, the candidate for the treatment of the vasomotor symptoms of menopause, and to initiate Phase 1-related activities for both our DARE FRT1 program, which, as I mentioned, has funding from the NIH, and our DARE VVA1 program. You may recall that DARE VVA1 is our hormone-free treatment for vulvular and vaginal atrophy in a hormone-receptor-positive breast cancer population. Our 2020 results and our 2021 plans demonstrate a feature of our business model that is core to its value-driving potential. Namely, the variety of our programs and the diversity of our women's health indications and development stages of our programs enable us to direct our resources and investment across the portfolio in ways that can advance the program against numerous milestones simultaneously. in both a time and a capital efficient manner, as we have demonstrated even in this challenging environment. Of course, we recognize that the pandemic and restrictions put in place to slow the spread of COVID-19 do have the potential to disrupt our business and increase anticipated development costs and timelines for our product candidates, and we will definitely continue to closely monitor the rapidly evolving circumstances. Currently, however, we remain on track. to deliver top line clinical study results and regulatory milestones on the target timelines we've just discussed. I'll now turn the call over to John to provide a business and corporate partnership update.

Thank you, Sabrina. Strategic partnerships are core to our model, particularly when it comes to how we plan to unlock value for shareholders and achieve commercialization objectives for our portfolio. The level of interest in our portfolio has been and continues to be strong, both from well-established large pharmaceutical companies as well as mid-sized and emerging companies, both U.S. and global. We are actively advancing partnership discussions that we believe will allow us to maximize downstream commercial execution and provide access to the broadest patient population in the respective therapeutic categories. By being good stewards of these products and partnerships, We believe we can have a positive impact on the lives of women while at the same time delivering shareholder value. For those of you familiar with the women's health category, you will appreciate that healthcare provider dynamics create commercial efficiencies and allow for a targeted call point across multiple indications. There are a number of established and emerging entities, meaning commercial companies, in the category looking for opportunities to enhance their portfolios and amortize their field sales force costs, which we expect will give us a lot of flexibility in terms of partnership structures, timing of partnerships, and also finding the best fit opportunity to create value for our shareholders, and especially as we transition from a development portfolio to a commercial portfolio. As an example, we believe our agreement with Bayer for our investigational monthly hormone-free vaginal ring overprime provides us with a robust commercial economic structure in the form of milestones and royalties, while at the same time gives Overprene the maximum commercial opportunity by putting the launch and commercialization in the hands of our partner, Bayer, as they look to expand their billion-dollar contraceptive franchise beyond Marina and beyond the long-acting market segment. But we also have the flexibility to look for partnership opportunities for our other product candidates, which may include elements such as co-promotion, strategic cost sharing, risk sharing, and commercial structures where DARE takes more of an active role without bearing the burden of the commercialization infrastructure and associated expenses. Given our portfolio of potential first in line and first in category product candidates and the underlying commercial potential of these candidates, we have the flexibility to consider structures that range from directly managing commercial capability to partnering or co-promoting our products or to fully licensing the commercial rights And this essentially means we can do what we believe is best for DARE and our shareholders in every case. We are fortunate to have such a unique and diversified portfolio because it allows us to be in a position to consider all of these structures, which we are currently doing with DARE BV1. And for DARE BV1, we are specifically interested in opportunities that we believe will prioritize the product in a way that will allow us to unlock the most value for healthcare providers, for patients, and for payers, as well as shareholders. So we look forward to providing you with additional insights on the DARA BV1 partnership and commercialization strategy following the top line data announcement later this year. And with that, I'm going to turn the call over to Lisa for a financial update.