Dare Bioscience, Inc.

Welcome to the conference call hosted by DeRay Bioscience to review the company's financial results for the quarter ended March 31, 2022, and to provide a general business update. This call is being recorded. My name is Delphine, and I will be your operator. With us today are Ms. Sabrina Mertuti-Johnson, DeRay's President and Chief Executive Officer. Mr. John Fair, the RAISE Chief Strategy Officer, and Ms. Lisa Walters-Hofford, the RAISE Chief Financial Officer. Ms. Johnson, please proceed.

Thank you. Good afternoon and welcome to our first quarter of 2022 Financial Results and Business Update call for DARI Bioscience. Our plan today is to review our first quarter results, discuss development since our last call in March, and use the time to review our business strategy and highlight our objectives and milestones anticipated for 2022. 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 facts 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 31st, 2021, which is filed on March 31st, 2022. I'd also like to point out that the content of this call includes time-sensitive information. that is current only as of today, May 12, 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. As you know, DARI is solely and squarely focused in women's health. It's 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. We typically use these calls to update you on the milestones we've achieved to date and the upcoming milestones that we anticipate, and we will do that today. We will provide an update on the collaboration with Organon to commercialize Zosciato, clindamycin phosphate vaginal gel, 2%, and the launch targeted for later this year. The oviprene phase 3 clinical study that we look to initiate in collaboration with the NIH and with advisory support from our commercialization collaborator, Bayer, our Sidenafil Cream Female Sexual Arousal Disorder Phase 2B clinical study, and the two other programs with clinical readouts anticipated this year. However, before we do that, in light of the strategic objectives we have already achieved, we're two for two in terms of entering into commercialization collaboration agreements for our most advanced programs, we want to take a few minutes to clearly articulate the why and the how. Specifically, before providing portfolio and financial updates, I'd like to take a few minutes to review our business strategy and our approach to building value. We started the company because we recognized a few factors about this therapeutic category that are somewhat unique to women's health and together create a compelling opportunity. First, a number of persistent unmet needs in women's health continue to exist, indications that are not life-threatening but are life-altering. and where therefore products that can improve outcomes and convenience can be compelling. Second, because of her unique biology, we believe that these persistent unmet needs can, in many cases, be addressed with a well-characterized active pharmaceutical ingredient, or API, delivered in a different way, such as vaginal versus oral. or for an indication that has not yet been addressed in women, such as Sidenafil for female sexual arousal disorder. Use of well-characterized APIs is expected to mitigate development risk, time, and cost. But by customizing the delivery route for her, one can still have a first-line or first-in-category opportunity with meaningful commercial opportunity. Third, The companies with a robust commercial footprint in women's health often do not have a commensurate internal development effort in women's health. And thus, those companies tend to grow their portfolios through product licenses and acquisition. This gap creates an opportunity for developed focused companies in women's health, as evidenced by the transactions in the category, not just the licensing agreement that DARE has entered into with Organon and Bayer to date, But the other transactions, these and other companies with a commercial footprint in women's health have also executed. As a result of these three factors, in the not quite five years since going public, we have assembled a portfolio of one FDA-approved product and seven investigational product candidates or potential product candidates, entered into two commercialization collaborations, one with Organon and one with Bayer, and have done so with relatively modest capital deployment and leveraging the SBIR NIH grants for four of our programs, an NIH collaborative research agreement for one of our programs, and a foundation grant of nearly $50 million for one of our preclinical programs. Creating a diverse pipeline of product candidates that utilize different APIs or different delivery routes and target different indications such that the successful outcome for one product candidate is independent of the outcome of others has been a foundation to our strategy. Our strategy also involves selecting a candidate, both the drug and the delivery vehicle, for each indication that represents an opportunity to personalize treatment options for women, both in terms of the unique biology of women and overall convenience for women. Our current portfolio includes drug delivered via vaginal rings, a viscous hydrogel, a proprietary cream, a soft gel capsule, an implant, and an injectable. Our current portfolio also includes numerous programs that utilize those well-characterized APIs and that therefore have been or that we expect to develop via the FDA's 505B2 regulatory pathway. The 505B2 regulatory path has the potential to shorten the overall development time and cost to obtain a marketing approval in the U.S. as was the case with Zasciato, for which we attained FDA approval just three years after acquiring rights to the program and with just a single pivotal clinical study. We consider many factors when evaluating new product candidates for our portfolio, since those factors ultimately impact potential funding, including non-dilutive funding, for the development of those products, as well as commercialization strategies and opportunities to enter into collaborations such as those that we have already established to date with Organon for Zasciato and Bayer for Obaprene. In terms of process, we start with the persistent unmet need. We talk to women, advocates, and healthcare providers to identify areas within women's health that have high unmet needs. In some cases, approved therapies for an indication exist, but the therapies are perceived as not sufficiently effective or convenient for the women using them. In other cases, There are no FDA-approved therapies for the indication. Once we identify an area of unmet need, we create a target product profile to address the need. The lens through which we evaluate each potential candidate is that it must have the potential to be a first line or first in category option and to achieve product revenues that would be attractive to a potential commercial collaborator, giving us optionality in terms of how we take the product to market if development is successful. Our portfolio has been built based on the unmet needs we identified and target product profiles we generated, and by acquiring or in-licensing candidates that we believe have the potential to meet the target product profile and thus demonstrate the characteristics, the features, the outcomes necessary to achieve a first-line or first-in-category product for the indication. Because we seek to leverage well-characterized APIs in many cases, the prospective candidates have proof of concept data and are well-positioned for DARI to accelerate their development as we did with Zasciato via our development expertise and our clear commitment to women's health. Most of our current portfolio candidates have been in-licensed or acquired under a financial model designed to allow us to focus our capital on product development and to give us flexibility that we need to achieve an accretive commercialization strategy. This model features modest or no upfront cash consideration, milestone payments if and as candidates successfully advance through development, and if a candidate is ultimately approved, commercial payment obligations are intended to allow DARE to commercialize the product directly or with a commercial collaborator. An approach that defers a large portion of the potential consideration until a program has successfully advanced and that contemplates potential commercial collaborators has enabled us to assemble a portfolio of eight assets, one FDA approved and seven in development, in a cash-efficient manner and put us in the position to enter into the collaborations we have to date with Organon and Bayer. When we add a product candidate to our portfolio, we believe we will have the opportunity to launch it ourselves or to collaborate with a third party to fund and execute its commercialization. Ultimately, we select the approach that we believe will provide the greatest access to women and achieve the highest peak sales in the least amount of time, because we believe that's best for all stakeholders, women and our shareholders. Given the stage of our current portfolio and the market dynamics and the therapeutic categories for our most advanced programs, Zasciato and Oviprene, we believe the best avenue to generate value for DARE and its shareholders is via the external commercialization collaborations or out-license agreements, rather than attempting to commercialize these assets on our own. Opportunities to enter into such collaborations are ultimately contingent on developing differentiated products, that demonstrate the potential to be first line or first in category. In summary, our business model involves identifying the areas of high unmet needs in women's health, identifying innovative solutions to address such needs, accelerating the innovation through development in a time and cost efficient manner, and executing on a commercialization strategy best suited to create value for our company and our shareholders. To date, we've elected to use our expertise and our funds to advance a portfolio of candidates through late-stage development and, in Zasciato's case, through FDA approval, and to collaborate with larger organizations with established sales forces and greater resources in women's health to conduct the market launch and ongoing commercialization efforts. I'll now turn it over to John for our portfolio updates.

Thank you, Sabrina. I will start with bacterial vaginosis and our first FDA-approved product, Zasciato. Bacterial vaginosis is the most common cause of vaginitis worldwide and is estimated to affect approximately 21 million women in the U.S. 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. Organon shares our commitment to advance critically needed innovations in women's health, and we believe that Organon's commercial capabilities will ensure that Zasciato reaches women most impacted by this condition. Through its strong commercial capabilities and expertise in women's health, Organon is in a unique position to bring Zasciato to market and provide women across the US access to this important option. Under our license agreement with Organon to commercialize Zasciato, DARE will receive a $10 million cash payment from Organon upon closing of the transaction and will be eligible to receive potential milestone payments of up to $182 million, as well as tiered double-digit royalties based on net sales. Closing of the transaction is subject to review under Hart-Scott-Rodino Antitrust Improvements Act and other customary conditions. The transaction is expected to close in Q2 of 2022, and Zasciato is expected to be available commercially in the U.S. in Q4 of 2022. Moving on to OverPrint, our novel hormone-free monthly contraceptive candidate whose U.S. commercial rights are under a licensed agreement with Bayer, we are targeting commencement this year of what we expect to be the single pivotal study necessary to support a premarket approval submission to the FDA. In order to initiate the pivotal phase three study, we must have an FDA-approved IDE in place. We initiated the IDE process for oviprene in early 2022, and pending the FDA's review and approval of the IDE, we seek to initiate the pivotal study in 2022. Based on communications with the FDA in terms of study sample size and duration, we expect that at least 200 subjects completing 12 months of oviprene use will be adequate. Under our CRADA with the Eunice Kennedy Shriver National Institute of Health and Human Development, or NICHD, which is part of the National Institutes of Health, NIH, together we are currently preparing for the pivotal phase three study of oviprene. Under our license agreement with Bayer to commercialize oviprene, DARE has access to Bayer's extensive clinical manufacturing and commercialization resources in an advisory capacity for approximately 80 hours per week, while DARE retains full control over oviprene's development and regulatory approval process. Bayer has the right to obtain exclusive rights to commercialize oviprene in the U.S. following the completion of the pivotal Phase III study by making a $20 million payment to DARE. Thereafter, DARE will be entitled to receive commercial milestone payments, potentially totaling $310 million, in addition to double-digit tiered royalties on net sales. Turning our attention to sildenafil cream, it's our investigational product to address her version of erectile dysfunction. Female Sexual Arousal Disorder, or FSAD. FSAD is a physiological condition characterized by the inability to attain or maintain sufficient genital arousal during sexual activity for which there are currently no FDA-approved therapeutics. We continue to enroll women in the Phase IIb RESPOND clinical study evaluating sildenafil cream as a potential treatment for FSAD at sites across the country. Our study protocol has a planned interim analysis to evaluate power calculations and trial sizing. We expect to conduct that analysis this year, after which we will provide guidance on anticipated timing for top-line data from the trial. DER-HRT1 is our unique intravaginal ring, or IVR, designed to deliver bioidentical estradiol and progesterone continuously over a 28-day period as part of a hormone therapy regimen. We announced positive top-line results from our Phase 1 study of DARE-HRT1 in 2021, and in April of 2022, we announced the start of a new Phase 1-2 clinical study of DARE-HRT1. This open-label study will evaluate the PK of lower and higher-dose versions of DARE-HRT1, the same two versions evaluated in the first Phase 1 study, in roughly 20 healthy postmenopausal women over approximately three consecutive months of use. The study will also collect safety, usability, acceptability, and symptom relief data. This study is being conducted in Australia by our Australian subsidiary to take advantage of the clinical and financial benefits of doing so. We expect to report top-line data from the Phase 1-2 study during the fourth quarter of 2022. And finally, we'll provide a brief update on DARE VVA-1. More than 3.8 million women in the U.S. have a history of breast cancer or are considered survivors Hormone receptor-positive breast cancer is the most common type of breast cancer diagnosis, and the prevalence of vulval and vaginal atrophy, or VVA, in postmenopausal breast cancer survivors is estimated to be between 42% and 70%. We would like to provide an option for these women. DARE VVA1 is our proprietary investigational formulation of tamoxifen for vaginal administration to treat VVA. As a non-hormonal approach to addressing VVA, it could be an important option for women with a history of of or at risk for hormone receptor-positive Brent's cancer, as many of these women are not ideal candidates for standard estrogen-based interventions. We initiated a Phase 1-2 clinical study in Australia in the third quarter of 2021 for this breast cancer survivorship vaginal atrophy treatment program, and we expect to report top-line data from DARE VVA1 Phase 1-2 study during the second half of 2022. Thus, in terms of anticipated milestones for 2022, we look forward to keeping you updated on one product launch, which we're extremely excited about, one pivotal phase three study start, which we're also very excited about, and two data readouts. And with that, I will now turn the call over to Lisa.