Dare Bioscience, Inc.

Welcome to the conference call hosted by DARE Biosciences to review the company's financial results for the year ended December 31st, 2021, and to provide a general business update. This call is being recorded. My name is Catherine, and I'll be your operator today. With us today are Sabrina Martucci-Johnson, DARE's President and Chief Executive Officer, John Fair, DARE's Chief Strategy Officer, and Lisa Walters-Harford, DARE's Chief Financial Officer. Ms. Johnson, please proceed.

Thank you. Good afternoon and welcome to our full year 2021 financial results and business update call for DARE Bioscience. Our plan today is to review last year's results, discuss development since our last call in November, and use the time to highlight objectives and milestones anticipated for 2022, as well as other insights for the year. 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 any 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, 2021, 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, March 31, 2022. DARI undertakes no obligation to update any forward-looking statements to reflect new information or developments after this call, except as required by law. DARI is solely and squarely focused in women's health. It is our belief that prioritizing women's health is not only good for the many women lacking effective or convenient therapeutic choices, but also for a broad set of stakeholders, including their families, partners, and, of course, our shareholders. Our strategy involves identifying areas of high unmet need, selecting promising candidates to address such needs, conducting research and development activities in a thoughtful and capital-efficient manner, and if approved, developing an appropriate commercialization strategy for each candidate with the goal of reaching as many potential users as quickly as possible. With our diverse portfolio, we seek to bring to market differentiated prescription therapies that prioritize women's health and well-being, expand treatment options, and improve outcomes primarily in the areas of contraception, fertility, and vaginal and sexual health. Today, we have seven candidates in various stages of development and one product that has received FDA approval last December. We're going to spend much of our time today providing an update on our late-stage development candidates and our FDA-approved product. As it pertains to that FDA-approved product, Zosciato, we look forward to reviewing the announcement we made today regarding the global license agreement we entered into with Organon to commercialize Zosciato, which is clindamycin phosphate vaginal gel 2%, our FDA-approved treatment for females 12 and older with bacterial vaginosis. Before we discuss Zosciato and our late-stage programs, such as Oviprene, I want to first review the many factors we consider when evaluating new potential candidates for our portfolio, since those factors ultimately impact the commercialization strategies for those products and opportunities to enter into collaboration such as those that we have established to date with Organon for Zasciato and Bayer for Oviprene. Key considerations include the following. candidates must have the potential to be a first-line or first-in-category option. Candidates must represent a meaningful commercial revenue opportunity. We ideally seek product candidates that utilize differentiated and different APIs and target different indications or drug delivery modes that are personalized for her. And finally, we are particularly fond of candidates that can be developed via a 505b2 regulatory path or have existing proof of concept, allowing us to move quickly to later stages of clinical development and potentially shortening the overall development time and cost to obtain a marketing approval in the US, as was the case with Zasciato, where we achieved FDA approval of Zasciato just three years after acquiring rights to the program. Now, before we look forward to what is ahead in 2022, I'd like to take a moment to highlight a few important achievements during 2021, since those achievements set us up for where we are today and what is yet to come. We were awarded a grant for up to $48.9 million over approximately five years to support our preclinical DARE-LARC-1 contraceptive program. The FDA accepted our NDA for DRBV1, which is now referred to as Ashiato, and the FDA subsequently approved our application on scheduled PDUFA date of December 7, 2021. We entered into a Collaborative Research and Development Agreement, or CRADA, under which a pivotal Phase III clinical study of oviprene will be supported financially by NICHD's Contraceptive Development Program and conducted within its Contraceptive Clinical Trial Network and we continued our collaboration with Bayer, who has the commercialization rights for oviprene. We initiated the Phase 2B response study, evaluating sidenafil cream, 3.6%, as a treatment for female sexual arousal disorder, her version of erectile dysfunction, for which there are no current FDA-approved treatments. We initiated a Phase 1-2 clinical study of DER-VVA1, our proprietary investigational formulation of tamoxifen, for intravaginal administration to treat vulvar and vaginal atrophy in women with or at risk for hormone-receptive positive breast cancer. And finally, we generated positive Phase I clinical data for HRT1, our investigational hormone therapy vaginal ring for the treatment of both the vasomotor as well as the vaginal symptoms associated with menopause. So first, now, let's talk about bacterial vaginosis. our FDA-approved treatment, Zosciato, and our global license agreement with Organon to commercialize Zosciato. First, the unmet need. Bacterial vaginosis is the most common vaginal condition and the most common cause of vaginitis worldwide and is estimated to affect approximately 21 million women in the United States. The condition results from an overgrowth of bacteria, which upsets the balance of the natural vaginal microbiome and can lead to symptoms of odor and discharge. Zasciata received both Qualified Infectious Disease Product, or QIDP, and fast-track designations from the FDA for the treatment of bacterial vaginosis. Organon shares our commitment to advance critically needed innovation in women's health. We are excited to be collaborating with one of the premier companies in women's health, as we believe that Organon's commercial capabilities will ensure that Zasciata reaches the women most impacted by this condition. Through Organon's strong commercial capabilities and expertise in women's health, Organon is in a unique position to bring Zasciata to market and enable women across the U.S. to access this important option. Under the terms of the agreement, we'll receive a $10 million upfront payment from Organon. We're eligible to receive potential milestone payments of up to $182.5 million and tiered double-digit royalties based on net sales. Zasciato is expected to be available commercially in the U.S. in the fourth quarter of this year. Completion of the transaction is subject to review under the Hart-Skart-Rodino Antitrust Improvements Act and other customary conditions, and the transaction is expected to close in the second quarter of 2022. I will shortly turn the call over to John to share some additional insights regarding our collaboration strategy and objectives in selecting Organon as our commercialization collaborator for Zasciato. But before doing so, I'll briefly provide updates on certain of the development milestones and objectives this year for our other programs. Oviprene is our potential first in category option in the over $7 billion contraceptive category. It is our novel hormone-free monthly contraceptive candidate whose U.S. commercial rights are under a license agreement with Bayer. In the third quarter of 2021, we announced the CRADA that I mentioned with the Eunice Kennedy Shriver National Institute of Child Health and Human Development, or NICHD, which is part of the NIH, the National Institutes of Health, for a pivotal Phase III study of oviprene. The CRADA reflects the NICHD's continued support for the development of oviprene and will allow us to leverage the tremendous development expertise of the NIH in contraceptive clinical studies and to share the cost of the pivotal phase III study with the NIH. So that next stage of clinical development for oviprene is that pivotal phase III contraceptive study that we will be connecting with them. In order to initiate the pivotal phase III study, we must have an FDA-approved IDE in place, and so we initiated that IDE process for oviprene early this year. And pending the FDA's review and approval of the IDE, we seek to initiate the pivotal study this year. Under the license with Bayer, DARI receives access to Bayer's extensive clinical and market expertise, through an up to approximately 80 hours per week in advisory support, while retaining control over overprint development and regulatory approval processes. Bayer has the right to obtain exclusive rights to commercialize the product in the U.S. following completion of the pivotal trial, the one that is being planned to be undertaken by DARI and the NICHD, by making to DARI a $20 million payment. We will also be entitled to receive commercial milestone payments potentially totaling $310 million in addition to double-digit tiered royalties on net sales. Sidenafil cream is our investigational product to address her version of erectile dysfunction, as I mentioned. In March of last year, we commenced our Phase 2B study evaluating Sidenafil cream, 3.6%, our investigational cream formulation of Sidenafil, which, as you know, is the active ingredient in Viagra, for topical administration to treat female sexual arousal disorder, or FSAD. FSAD is a physiological condition characterized by the inability to attain or maintain sufficient general arousal during sexual activity. Sound familiar? Of the various types of female sexual dysfunction disorders, it is the most analogous to erectile dysfunction in men, and yet there is no FDA-approved product that exists today to treat FSAD. If our clinical development is successful, Sidenafil cream has the potential to be the first FDA-approved FSA-D treatment option. We continue to enroll women in the Phase 2b RESPOND clinical study evaluating sedentary cream as a potential treatment for FSA-D at sites located across the United States. Our study protocol does have a planned interim analysis. It's to evaluate the power calculations and trial sizing. So once we conduct that analysis, which is planned this year, We will provide guidance on anticipated timing for the top-line data. Next, DARE-HRT1. The results of the completed Phase I study of our Investigational Hormone Therapy product, or DARE-HRT1, last year demonstrated its potential as an effective hormone therapy for both the vasomotor and the vaginal symptoms associated with menopause. DER-HRT1 is a unique vaginal ring. It's designed to deliver bioidentical estradiol and bioidentical progesterone together continuously over a 28-day period as part of a hormone therapy regimen. As the next step in the development program, we are now commencing a Phase I-II clinical study of DER-HRT1 in Australia in the second quarter of this year. This open label study will evaluate the PK of the lower and high dose versions that we had studied previously of DRHRT1 in approximately 20 healthy postmenopausal women over now approximately three consecutive months of use. The study will also collect safety, usability, acceptability, and symptom relief data. There are currently no FDA approved IVRs that deliver bioidentical progesterone in combination with bioidentical estradiol. As such, DARE HRT1 has the potential to be a first-in-category product that offers monthly convenience for women. And the last portfolio candidate I will discuss today is DARE VVA1. More than 3.8 million women in the U.S. have a history of breast cancer. Hormone receptor positive is the most common type of breast cancer. And the prevalence of vulvar and vaginal atrophy in postmenopausal breast cancer survivors is estimated to be 40% to 70%. We would like to provide an option to those women. DER-VVA-1 is our proprietary investigational formulation of tamoxifen for vaginal administration to treat VVA. As a non-hormonal approach to addressing vaginal atrophy, it could be an important option for women with a history of or at risk for hormone-receptive positive breast cancer. VVA is often also the outcome of effective breast cancer treatments. And as I mentioned, it can lead to vaginal discomfort, including painful intercourse, which, as you can imagine, causes significant distress. For many women, an appropriate treatment for vaginal atrophy is supplemental estrogen. However, estrogen may pose a risk to women at risk for hormone receptor-positive breast cancer. And hence, DARE VVA-1 may offer a solution for these women and others for women whom hormonal treatment is not an option. As I mentioned in my opening remarks, we initiated that Phase 1-2 clinical study in Australia in the third quarter of last year for what we refer to as this Breast Cancer Survivorship Vaginal Ecstasy Treatment Program, DRVBA-1, and we expect to report top-line data from the DRVBA-1 Phase 1-2 study during the second half of this year. Now, you've been waiting to hear more about Zasciato. I'm going to turn the call over to John to provide our perspective on commercialization and collaboration strategies in women's health.

Thank you, Sabrina. As Sabrina noted at the start of the call, we closed 2021 by achieving a number of important milestones for DARE. Chief among them was the FDA approval of Zasciato in December of 2021. As we communicated on our last call, we are a company focused on providing better therapeutic options for women and and collaborations are core to our business model. In the context of Zasciato, our objective was to identify the right commercial collaborator for the product, specifically one with strong commercial capabilities and expertise in women's health that would be in a unique position to bring Zasciato to market and leverage the clinical outcomes achieved in the phase three clinical study. Zasciato uses a novel thermal setting gel formulation containing clindamycin at a concentration of 2% present as clindamycin phosphate with one-time dosing. In the phase three trial, Zasciato demonstrated clinical cure rate of 70% at the test of cure visit, the day 21 to 30 visit, as compared to 36% for placebo. The potential to offer women a new option for treating bacterial vaginosis enabled us to engage with the most capable potential partners in the women's health landscape, and we are excited that Organon will be leveraging its strong commercial capabilities and expertise in women's health to bring Zasciato to market. Organon's goal to deliver innovation, improve access, and expand choice to help address therapeutic gaps in women's health is clearly aligned with our mission and what we wanted to accomplish with Zasciato. Transitioning to Overprene, our Overprene collaboration with Bayer has remained focused on activities to support the IDE process with the FDA, including manufacturing activities, and importantly, pre-commercialization activities that inform the design of the pivotal study targeted to commence later this year, and ultimately, the launch strategy for this potential first in category contraceptive candidate. We are fortunate to work with collaborators that share our vision to deliver innovation in women's health, and have the access and expertise and sales capabilities to enhance our impact. I will now turn the call over to Lisa, who will give you a financial update.

Thank you, John, and thanks to all of you for joining us today. I would now like to summarize DARI's financial results for the year ended December 31st, 2021, which I will refer to as fiscal 2021 or 2021. Daria'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, or R&D, activities. While our general administrative expenses tend to be somewhat predictable throughout the year, Our R&D expenses will vary with our clinical, preclinical, manufacturing, regulatory, and other activities related to advancing our portfolio candidates. For fiscal 2021, DARI's G&A expenses were approximately $8.4 million, and our R&D expenses were approximately $30.6 million. The $9.8 million increase in R&D in 2021 compared with 2020 is primarily attributable to the cost of the ongoing Seldentical Cream, Phase IIb Respond clinical trial for female sexual arousal disorder, manufacturing and regulatory affairs activities related to oviprene, and development activities for our Phase I and Phase I Ready programs. Our comprehensive loss for the year was approximately $38.8 million. During fiscal 2021, net cash proceeds from financing activities were approximately $75.8 million and primarily reflected sales of stock under our ATM program. We ended 2021 with approximately $51.7 million in cash and cash equivalents. I'd like to take a moment to highlight two interesting financing developments that occurred during 2021. In June, we entered into a grant agreement, making us eligible to receive up to $48.9 million to support the preclinical development of Daryl Arc 1 over roughly the next five years. We received an initial payment of $11.5 million in July, and any future payments will be contingent upon Daryl Arc 1, the program, achieving specified development and reporting milestones. At year end, December 31st, 2021, approximately $10.5 million was recorded as a deferred grant funding liability under this grant agreement in our balance sheet. We are truly grateful to have been selected for a grant of this magnitude that covers multiple years of development work to advance this truly innovative technology. Second, in July, as Sabrina had mentioned, we entered into the Cooperative Research and Development Agreement, or CRADA, with NICHD, for the conduct of the Phase III study of overprime. JARI agreed to contribute $5.5 million towards the total estimated cost of the pivotal study, and we paid about $5 million to date. JARI will also be responsible for providing the clinical supplies of overprime for this study. For its part, NICHD will be responsible for the other costs related to the conduct of the pivotal study and will manage the payment of expenses to third parties. We truly believe NICHD's contraceptive trial experience and financial support should allow for the completion of the oviprene pivotal study in an efficient and cost-effective manner. In terms of developments during the first quarter of 2022, as Sabrina and John just discussed, we were thrilled to announce a global license agreement with Organon for the commercialization of Zasciato. Again, JARI will receive a $10 million upfront payment from Organon. And DARI will be eligible to receive potential future milestones of up to $182.5 million, as well as tiered double-digit royalties based on net sales. Sashiado is expected to be available commercially in the U.S. in the fourth quarter of 2022. Completion of the transaction is subject to the review under Hart-Scott-Rodino Antitrust Improvements Act and other customary closing conditions. The transaction is, however, expected to close in the second quarter of 2022. As of March 30, 2022, DARI had approximately 83.9 million shares of common stock outstanding. So, in closing, we will endeavor to be creative, collaborative, and opportunistic in seeking the capital that we need to advance our candidates and build shareholder value. As Sabrina had noted at the beginning of the call, we encourage investors to review the more detailed discussion of our financials and financial condition, our liquidity and capital resources, and our risk factors in our annual report on Form 10-K for the year ended December 31st, 2021 that was filed today. I would now like to turn the call over to the operator.

Thank you. To ask a question, you'll need to press star 1 on your telephone. To withdraw your question, press the pound key. Again, if you would like to ask a question, press star 1. Our first question comes from Zegba Jallah with Roth Capital Partners. Your line is open.

Hello. Thanks for taking my questions and congrats on the progress as well as the recently signed a deal with Organin. I think everything looks like it's on track, so I'm just going to ask questions that a lot of folks have been wondering. I think the first is just about your decision to have Organin fully take over the commercialization as opposed to partnering with them on the commercialization. And then also, you know, your decision around perhaps giving them, right, a first negotiation to some specified product.

Yeah, great questions, and thank you for asking about, you know, about Organon and the decision. So, first of all, just taking a step back, it's always wonderful when you have developed a product and you have a vision, right, of selecting product candidates that truly address persistent unmet needs, that therefore have an opportunity to be first in line or first in category and have meaningful commercial potential, thus they should be partnerable to actually, when you get to kind of the finish line of an FDA approval, you know, have interest, right, from parties in that product candidate. And really what that does is provide a lot of optionality. And as we have talked about prior to today and being able to disclose our selected partner for this program, we certainly looked at a variety of different structures and options. And fortunately, we're in a position where those were possibilities and opportunities, including opportunities to co-promote. However, as we've also said several times, we really try to be disciplined and look at each product on its individual basis and merits and really also try to be very, very focused on what is the best way to to ensure that product has the access to the most women as quickly as possible. Because what that does is it maximizes access. That's good socially. That's good for women. That's also good financially. And it can also impact your time to peak sales. So we really tried to look at it from that perspective. And clearly, clearly, I think, right, entering into a partnership is collaborating, collaborating with one of the premier companies in women's health, as we believe that Organon is, obviously, and with their commercial capabilities, will ensure that Zosciato reaches the most impacted women from this condition as quickly as possible. And so, you know, while we'd love to think that DARE can add a lot of value commercially, I think that, you know, it's very clear that, obviously, an organization like Organon with their global footprint and with their strong, strong commitment in women's health and their very, very mission that is so unified with what our mission is, is clearly a great partner for this program and best for DARE to do what we do well and continue innovating. And that is a great transition to your question, right, about what you noted in the transaction, which it does. include an opportunity for Organon to have exclusive worldwide rights of first negotiation for specified potential future DARE products. And I think that's just representative of the kind of work that DARE does. Organon's commitment to the category, our commitment to continuing to enhance and build our portfolio, again, with products that address persistent unmet need that have a potential to be first line or first in category products and have a potential to address and really be meaningful commercial opportunities. And so that's really what that represents. It's our alignment and our vision of the kind of work they are going to be doing and that we want to be doing. And it really just gives an opportunity for us to chat and talk about those potential future products.

Thanks, Sabrina. And then I just have two quick ones, and I'll get back in the queue. The first one here is just about the broad reach of Reagan. And so I imagine that the X years opportunity is important. So just kind of wanted to get some commentary around what that market opportunity could be, since we've primarily been talking about the U.S. market, and then how quickly, you know, could that be leveraged in terms of the market?

Yeah, so definitely. So, you know, obviously they are a global organization, right? So they have that global footprint. You know, in terms of the focus right now, obviously we have the U.S. approval, so that is clearly a focus. And I think growth outside of the U.S. is an ongoing consideration. You know, there's no confirmed plans that we're going to talk about right now, but obviously it is a global transaction. Women around the world are experience bacterial vaginosis. It's not, you know, focused in the U.S., but the current approval today is in the United States. So, obviously, that's a clear priority right now.

Thanks. Good for modeling. And then the last eight years, just about some clarification for overprint. I know after the IDA is removed, you can move into a Phase III study, but I was just wondering if there was anything that we need to know that can kind of take place between the IDE approval and when you can start the Phase 3, just so we can kind of guesstimate as to when that Phase 3 for overprint can get underway.

Yeah, that's a great question, and I'll try to provide as much clarity as I can. But basically, as I mentioned, we have initiated the IDE process with the FDA, which really allows us to have that collaborative discussion around You know, the IDE and the clearance of the IDE. And importantly, one of the reasons that we started, obviously, that process is really so that we can make sure that we are aligned on the protocol for the pivotal study. Because really one of the longest lead time items when you're preparing for a trial of any kind is that pivotal study. study, your protocol, the design of the study. And because oviprene is so unique as a development candidate in the contraceptive category, it's the first product that has the potential to be the first monthly hormone-free vaginal contraceptive method. You know, having an understanding of some of those requirements is really one of the important steps because there's work that we have to do along with the NIH to prepare for that pivotal study. so that we can initiate this year. So by starting those discussions with the FDA, we do have an understanding of the, you know, some key pivotal study requirements, 200 women completing 12 months. And that really allows us to do the work to prepare from a manufacturing perspective, you know, to prepare product supply to support the study, to prepare in site selection and all of that work. And then from an FDA perspective, it's really just completing the ID process and obviously as we you know, have updates on that, we'll provide them. But right now, we're really working towards this big picture, right, which is this year, and importantly, got some great clarification on the protocol that's allowing us to start some of those planning activities.

Thanks, and congrats again on the partnership.

Thank you. Thank you so much.

Thank you, and as a reminder, if you would like to ask a question, press the star, then the one key on your touchtone telephone. And our next question comes from Douglas Sao with AC Wainwright. Your line is open.

Thanks for taking the questions. And congrats on the deal. Just as a starting point, Sabrina, you've obviously successfully partnered, you know, with two of the premier women's health organizations in the world. Just curious, how are you now thinking about the pipeline, and at what point is it right for you to become a commercial organization and to begin to build out that capability?

Well, thank you for the question. So, first of all, thank you for recognizing, you know, what we've achieved to date, right, in terms of partnering with, and we're not just saying it because they're our partners, but, you know, partnering with organizations like Bayer and Organon, you know, that have have really prioritized women's health. That's important to us to partner with organizations when we partner for commercialization that are truly aligned and have the kind of capability, as John mentioned, capability around access, capability around commercial sales infrastructure to ensure that the women impacted most by the conditions are really going to have an opportunity to be served. Like I said, so that's definitely critical. And as we think about commercialization strategy, right, big picture, one, right, we always want to do the best thing for that product, and how do we achieve that for that product? And two, to your question of, you know, obvious question, we have a whole portfolio of women's health products, right? I talked about it. We have seven other programs in development, and I only talked about a few of them today. So, you know, at what point might it become interesting for DARE to participate. Obviously we have a portfolio to support it, right? Often that's the challenge, right? You might have one approved product and what do you do next? We clearly have a portfolio to support it and that gives us true optionality. And at some point where products start to have approvals that are becoming more aligned, right, from a timing perspective such that one would not be in a position, you know, with one individual product where you're trying to build all that infrastructure and and be successful around one product, it can start to become more interesting. Having said that, if we continue to deliver the way we have to date on these two furthest along programs to develop products that truly address a persistent unmet need, that have that first line of first in category opportunity, that have that kind of commercial potential, that is what truly is going to mean we have real optionality. where we can partner, if it makes sense to partner, and collaborate in the way we have with these two collaborations that we've already done with Organon and Bayer, or participate at some level in commercialization. If and when we make a decision to participate, it will be because we believe that we can add value to the brand, and importantly, to our shareholders by doing so, right? To our shareholders by doing so. Because ultimately, you build value when you're launching a product, like I said, fundamentally by making sure that it's getting to all of the women who need it as quickly as it can and in the most efficient way possible. And to date, we strongly believe that through these partnerships that we've entered into, these collaborations that we have entered into with organizations that have that clear capacity and have demonstrated, importantly, demonstrated success in building very important and very commercially successful brands in women's health specifically. So hopefully that answers your question.

No, no, no, that's really helpful. And, you know, just as a quick follow-up on the Zasciato deal with Organon specifically, just it's a global deal. Are any of the milestone payments tied to XUS commercialization?

Yeah, great question. You know, really what we've disclosed, right, about the transaction is the big picture, right, on the milestones that are forthcoming. So, obviously, there's the $10 million, which is really the upfront consideration, and then there's $2.5 million at first commercial sale, and then there's $180 million, in additional milestone payments. And, of course, that's on top of the double-digit tiered royalties. And that $180 million, the clarity that I can give you on that is it's tiered commercial sales milestones and regulatory milestones.

Okay. Great. Thank you very much.

Yes. Thank you.

Thank you. And our next question comes from Kumar Raja with Brookline Capital. Your line is open.

Thanks for taking my questions, and I will also add my congratulations for the partnership. So with regard to the drug supply, where are you in terms of manufacturing and how is it going to work? Is Organa going to take over all of that?

Yeah, great, great question. So, as we had guided previously, in terms of supply, we are in the supply chain, working on supply, and we have guided previously that because of supply chain, the earliest that commercial supply was anticipated to be available is summer of this year. And that really ties into, obviously, the you know, the anticipated, right, timing around the commercial launch that we've been talking about, right, which is that we expect it to be commercially available in the fourth quarter. So that really ties into that. In terms of your question on, well, who's doing that? How does that work? Under the agreement, we are going to be responsible for a couple things, actually. Regulatory interactions and for providing that product supply on an interim basis, really, until Organon assumes those responsibilities. So until that time that Organon assumes those responsibilities, which is the intent, until that time they would purchase all the product supply, basically requirements of Zasciato from us, and we would oversee that manufacturing activity. And it's with, you know, and obviously we've been doing that already, you know, as we've been preparing for launch, but obviously for all the clinical supply that supported the successful Phase 3 study.

Okay, so I assume there would be like a little bit markup compared to whatever it's going to cost you guys?

Yeah, so basically there's a transfer price, which would be equal to our manufacturing cost plus a single-digit percentage markup.

Okay, and also is there a timeline when it will switch completely over to Organon?

Yeah, that's not really something that we're discussing yet, but that's the intent, right, that over time that these are responsibilities that they would take over when it makes sense.

Okay.

But right now, obviously, we had these processes underway, and we're all working towards, right, an opportunity, a potential to launch this year, and obviously this is a nice, efficient way to get there.

Okay, and with regard to overprint, you touched on it a little bit with regard to the IDE. So where are you in the process with regard to the interactions? Anything additional you can share, especially where you are, how long it will take to get the clearance?

Yeah, really no more color than what I've shared to date, other than we started that process earlier this year, right at the beginning of this year, with the IDE submission, which we converted to a pre-submission, and that really allows us to have a collaborative discussion that isn't as time-limited around things such as the Pivotal Protocol, which we very importantly wanted to have an opportunity to have conversations around. As I mentioned in my comments and John also alluded to in his comments, you know, one of the, well, behind the comment was one of the reasons, right, to partner with Bayer, to collaborate with Bayer when we did on the oviprene program, right, before the pivotal study is to get all of Bayer's input for a product like oviprene that is so different from other contraceptive products, has such a product candidate opportunity to be unique in the category, we wanted to make sure that we got a lot of commercialization insights from Bayer that could translate into things we wanted to do in the pivotal study to really ensure the product is best situated for success. And so as we view the IDE process, we really wanted to make sure we had an opportunity in the process to engage and interact with the FDA on certainly addressing any other questions they have, right, about oviprene, because it is unique, but importantly also to have an opportunity to engage with them in a more collaborative dialogue process so that we can make sure that, for instance, things that Bayer has learned about the marketplace and that we want to incorporate in the pivotal study to ensure that it is really positioned nicely for commercial success, that we could do that. And so we have initiated that process, but because of how we're running the process and collaborating with the FDA in the process, I can't give you and date on the process other than to say the whole process is geared towards allowing us to get into the clinic this year, which is the objective, right, to get into the clinical study this year. And similarly, that's what we've been working on with the NIH in terms of all the preparatory activities. And based on a lot of the feedback that we've already received, that's really allowed us to start planning with the NIH, you know, around you know, sites, activities, things like that, so that we can be ready. And importantly, knowing, you know, that we need to be looking at 200 women completing 12 months of use, that helps us considerably in planning while we're working through other things. So I know I gave you a very long answer that didn't you know, give you an exact timeline. I can't do that quite yet, but hopefully now it makes a little more sense why we're in the process we are with the FDA on the IDE and that overall what we're working towards is that pivotal studies start this year. And there's a lot of activity underway to support that.

Yeah, that's very helpful. So basically the understanding is that it's going to be a seamless process once the pre-submission is converted to a complete submission. They have about 30 days. The expectation is okay.

Thank you. Yes. Thank you for saying that. Yes.

All right. Thanks so much. Congratulations again.

Thank you. Thank you.

Thank you. And I'm showing no further questions in the queue. I'd like to turn the call back to Sabrina for closing remarks.

Great. Well, thank you all for taking the time this afternoon to hear about our recent updates and our ongoing commitment to really drive value for all of our stakeholders, women, healthcare providers, and our shareholders. And, you know, in closing, 2021 was a year of very meaningful developments for DARE and really positioned us for this strong first quarter in 2022. And we absolutely look forward to keeping you updated on our progress against the important 22 objectives and milestones, including activities over the next several months with Oregonon regarding Zosciato, preparations that we just talked about for the oviprene phase 3 study with the NIH in Bayer, and our ongoing sedentifil cream phase 2B study for female sexual arousal disorder, her version of erectile dysfunction. So thank you all so much for taking the time. Thank you for supporting our work. And thank you for really being aligned with our ongoing commitment to drive value for all of our stakeholders. Thank you.

This concludes today's conference call. Thank you for participating. You may now disconnect.