Dare Bioscience, Inc.

Welcome to the conference call hosted by Dore Bioscience to review the company's financial results for the year ended December 31st, 2022 and to provide a general business update. This call is being recorded. My name is Abby and I will be your operator today. With us today are Sabrina Martucci Johnson, Dore's President and Chief Executive Officer, John Fair, , and Lisa Walters-Hofford . Ms. Johnson, please proceed. Thank you.

Good afternoon and welcome to our year-end December 31, 2022 Financial Results and Business Update call for DARE Bioscience. Our plan today is to review our four-year results, discuss development since our last call in November, and use the time to review our business strategy, including why we believe investment in women's health is efficient and disproportionately impactful, and to highlight some important objectives and milestones anticipated in 2023. 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 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 31, 2022, 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, March 30th, 2023. DARI undertakes no obligation to update any forward-looking statements to reflect new information or developments after this call, except as required by law. By the time 2022 came to a close, we had secured our second commercial collaboration, in this case, for our FDA-approved product, Zasciato, with Organon. We received FDA acceptance to commence what we believe will be the single pivotal study required for our monthly hormone-free contraceptive candidate, Oviprene, commercial rights to which are under a license agreement with Bayer. We announced that we completed enrollment in our Sidenafil Cream Female Sexual Arousal Disorder Phase 2B study, and we announced two positive Phase 1-2 study top-line readouts, one for our hormone-free vaginal atrophy treatment candidate, DARE VBA1, and one for our 28-day vaginal ring hormone therapy candidate for the vasomotor symptoms of menopause, DARE-HRT1. These accomplishments in 2022 position us well to potentially achieve additional commercialization, clinical and regulatory milestones in 2023 that I look forward to sharing shortly. And our 2023 milestones include not only objectives related to the programs I just identified, but to other portfolio candidates as well. Those of you who've been following DARA know that we are focused solely and squarely on women's health. With 12 independent standalone development stage candidates in our portfolio, we have, to our knowledge, the deepest pipeline of women's health product candidates of any other company, including global pharmaceutical companies. It has been reported that a mere 1% of healthcare research is invested in female-specific conditions beyond oncology. And yet, based on IQVIA data for 2013 to 2022, women's health products make up 27% of the blockbuster products, as in those that generate over $500 million in annual sales. And those products contribute 35% as a revenue generated by all blockbuster products. Thus, given those statistics, with 12 development stage candidates in our portfolio, we like our odds of generating value for our shareholders and the disproportionately impactful investment a women's health product candidate can potentially represent, particularly given that a number of our candidates are in the contraceptive, menopause, and sexual health categories. all of which have seen over $1 billion and even over $2 billion individual brands, including the potential of our sexual health program, Sedentifil Cream, since there is yet to be an FDA-approved product for arousal disorder in women, the most analogous condition in women to erectile dysfunction in men. We would love to be first and more on our Sedentifil program shortly. So as such, it is our belief that prioritizing women's health is not only good for the many women lacking effective or convenient therapeutic options and for the broad set of stakeholders that care about women's health, including family members and partners, but importantly, also for those investing in the category. Our current innovation efforts are focused in contraception, vaginal health, reproductive health, menopause, sexual health, and fertility. We chose these areas because we saw opportunities to bring new innovation to women in indications where we could be first to market, have a first in category product, or develop the first line product in a given therapeutic category. So while we have a broad portfolio, importantly, every single product candidate in our portfolio has to stand on its own merits to justify our investment in that individual product candidate. specifically, before we select a new candidate for development, we make a determination that it meets these strict criteria. First, the product candidate has to address a meaningful market opportunity in the form of a persistent unmet need. Second, it has to have the potential to be first line or first in category or both. Third, it should already have demonstrated proof of concept and ideally use well-characterized active pharmaceutical ingredients which commit at gate development time, cost, and Evan Risk. And finally, it should represent an opportunity to deliver a clear improvement over the standard of care as measured by clinical outcomes and patient acceptability and as ultimately evidenced by a clearly differentiated product label, which is critical for market access and pull-through. Our focused efforts to deliver differentiated innovation in women's health have resulted in 12 development stage programs across nine distinct indications, with more than five milestone events anticipated in 2023 that we will discuss shortly, three candidates in or nearing phase three development, two potentially transformative transformational collaborations with leaders in women's health product commercialization, Bayer and Organon, and one FDA-approved product, Zasciato. I want to share with you now DARI's key 2022 results and milestones and our anticipated 2023 milestones. In addition to my remarks, I encourage you to read our press release issued this morning since it provides a more comprehensive review of our 2022 accomplishments. We have important upcoming milestones for Zasciato, Oviprene, Sildenafil Cream, DARE VVA-1, DARE HRT-1, and Dare PDM1. So I'm going to focus my comments today primarily on those programs. So let me begin by highlighting our global license agreement with Organon that supports the commercialization of Zosciato, clindamycin phosphate vaginal gel 2%. As a reminder, Zosciato is a lancosamide antibacterial for single-dose vaginal administration indicated for the treatment of bacterial vaginosis in female patients 12 years of age and older in the United States. The Zasciata story is a great validation of our portfolio candidate selection and development strategy. Bacterial vaginosis is the most common vaginal condition in women of reproductive age, estimated to affect approximately 23 million women in the U.S. alone. But yet a number of women with the condition have been underserved by currently available products. We hoped that by focusing on improving outcomes and her overall user experience, we could deliver a novel option. Understanding the differentiation drives value, we strove to design a phase three study that would generate the data necessary to support the target labeling. And by doing so, create the opportunity for a commercialization collaboration that could drive value. We are thrilled that Organon, The women's health focus spin out of Merck is launching Xasiato and that they will leverage their established Nexplanon sales team to accelerate Xasiato uptake. Specifically, with the manufacturing validation activities required to support the commercial launch now nearly completed, we are excited about the commercial launch activities underway at Organon. In preparation for what will be Organon's first pharmaceutical product launch into the women's health category since spinning out of Merck, Given that the Nexplanon sales team will be leveraged for the Zosciato launch, we expect to benefit from the track record of commercial success that team has demonstrated. Organon believes that there is roughly a 90% overlap of those healthcare providers who prescribe Nexplanon and are viable Zosciato targets based on treatment patterns. The strong relationships the sales team has with these providers are expected to enable immediate access. We anticipate the first commercial sale before the end of the second quarter. More on the Zosciato commercial activity when John provides his update. In terms of our oviprene program, the FDA's acceptance of our oviprene IDE last year was an important milestone for the program, as it allows us to commence what we believe will be the single pivotal clinical study required to support the PMA submission for registration. Obaprene is our investigational potential first in category hormone-free monthly intravaginal contraceptive whose commercial rights are under a license agreement with Bayer. We announced IDA approval for our planned pivotal study by the FDA in October 2022 and confirmed our belief that a single pivotal study of approximately 12 months duration will be sufficient to support a PMA submission to the FDA. The study will target having around 200 to 250 subjects complete 13 menstrual cycles of use. The pivotal study is being conducted under a Collaborative Research and Development Agreement, or CRADA, with the NIH's NICHD Division and with NICHD's Contraceptive Clinical Trial Network. And in December, NICHD brought the investigators from those sites together for an investigator meeting. We anticipate initiation of Pivotal Phase 3 study subject recruitment in the middle of 2023. So that's two innovative brands, Zasciato and OverCream, and two potentially transformational collaborations, one with Organon and one with Bayer. So what's next for DARI on our unpartnered programs? Well, let's begin with Sidenafil Cream, 3.6%, a product candidate with the potential to create a completely novel category in women's health. We are looking to address the lack of physical general arousal response and sensations and the associated distress that are the hallmark of female sexual arousal disorder or FSAD. As I mentioned up front, FSAD is analogous to erectile dysfunction or ED in men, both in terms of pathophysiology as well as target pharmacology. and the addressable markets are also quite comparable in size. We completed enrollment in our exploratory Phase 2b study in 2022, and as we approach the Phase 2b top-line data readout projected for the second quarter of 2023, we wanted to give you a sense of what you can expect. First, by way of refresher, previously conducted studies by DARE and our licensor, SST, demonstrated that this cream formulation of sidenafil, which is the same active ingredient as in Viagra, increased blood flow to the female genital tissue both when assessed via an internal vaginal probe and when assessed via an external temperature sensing camera. These data provide the proof of concept that the formulation is achieving its target activity in the tissue. Obviously, Vaginal probes and genital temperature sensors are not practical endpoints for a Phase III program. Thus, the exploratory Phase IIb study was designed to evaluate the performance of sedentary cream and to evaluate a number of different potential ways to ask women questions about their genital sensations and improvements, referred to as patient-reported outcomes, in the at-home setting. in order to identify and select the appropriate patient-reported outcomes to take forward into the Phase 3 program. Therefore, as we bring our exploratory Phase 2b study to a conclusion, we will, as a first step, report top-line data for a number of the assessment tools we utilized in the study. And subsequent to reporting the top-line results, when we have the full data set from the study, We will formalize our proposals to the FDA regarding the patient population to study and the endpoints to evaluate in the Phase 3 program. Our goal is to bring a much needed solution to the women, estimated to be 10 million in the United States alone, who are distressed and seek treatment for low or no sexual arousal and no FDA approved product option to address their condition today. Third, I'd like to highlight the positive top line results from the two Phase 1-2 studies completed last year, one for DARE-HRT1 and another for DARE-VBA1, both of which were conducted through our wholly owned Australian subsidiary. So let's start first with the Phase 1-2 study of DARE-HRT1, menopausal hormone therapy for the treatment of the vasomotor symptoms of menopause or VMS. Fortunately, many of you probably watched the Super Bowl and saw Estella's ad challenging people to answer the question, what is VMS? But it may be worth reminding you that VMS stands for vasomotor symptoms and menopause, which are commonly referred to as hot flashes. With over 45 million women in the U.S. estimated to be in or approaching menopause each year, and with a legacy brand in the category having generated $2 billion in annual revenue, It's not surprising that the condition was the subject of a Super Bowl ad. So what are we developing for the condition? Well, DRHRT1 has the potential to be a first-in-category convenient combination hormone delivering monthly vaginal product for the treatment of the vasomotor symptoms of menopause. Specifically, DRHRT1 is an investigational intravaginal ring. designed to release bioidentical estradiol and bioidentical progesterone through this vaginal ring over 28 days. So DARE-HRT1 has the potential to be the first non-daily, non-oral, monthly format product with both bioidentical hormones. There are no FDA-approved options with both hormones in one monthly IVR. Hormone therapy remains the most effective treatment for the vasomotor symptoms of menopause and the genitourinary syndrome of menopause, and has also been shown to prevent bone loss and fracture. The 2022 Hormone Therapy Position Statement of the North American Menopause Society, or NAMS, supports hormone therapy in peri- and postmenopausal women, and NAMS observes the non-oral routes may offer advantages over oral routes administration. We previously announced the top line data from that Phase 1-2 study of two different dose combinations of DRHRT1 over 12 weeks of use in approximately 20 healthy postmenopausal women. And as we reported, the levels of estradiol released from both the lower and the higher dose formulation of DRHRT1 achieved or exceeded the levels that were targeted for hormone therapy. In addition, despite the small sample size, The levels of estradiol released from both the lower and higher dose formulation evaluated in the study achieved statistically significant improvement compared to baseline in VMS, as well as the genitourinary symptoms of menopause and vaginal pH and vagination index, all at the P less than 0.1 level. These data support the potential of their HRT1 to deliver effective hormone therapy in a convenient 28-day vaginal ring. Following clinical development, we intend to leverage the existing safety and efficacy data on the active ingredients in DER-HRT1, estradiol and progesterone specifically, to utilize the FDA's 505 pathway to obtain marketing approval of DER-HRT1 in the U.S. That pathway, that 505 , that's the same pathway we use for Zosciato. We intend to seek FDA approval of DER-HRT1 for the treatment of moderate to severe vasomotor symptoms due to menopause in women with intact uteri. Based on pre-IND communications with the FDA and the top-line pharmacokinetics or PK data from the DRHRT1 Phase 1-2 study, we believe FDA approval of DRHRT1 for that indication is achievable via that 505 pathway supported by a single placebo-controlled Phase 3 clinical trial. of DARE-HRT1, and a scientifically justified PK Bridge, basically via relative bioavailability trial, between DARE-HRT1 and the selected listed estradiol and progesterone drugs. Ongoing activities to support the progressing directly into that single Phase III study to support registration include manufacturing and nonclinical studies to support the IND submission and the planned, therefore, IND opening Phase III study. We look forward to providing further updates on the timelines to Phase 3 as these activities continue to progress this year. The second Phase 1-2 study conducted in Australia was for DRVVA1, our hormone-free vaginal atrophy treatment candidate. There are currently no FDA-approved products labeled as safe for use in hormone receptor-positive breast cancer. DARE VVA-1 has the potential to be the first in category hormone-free vaginal treatment for vulvar and vaginal atrophy or VVA. DARE VVA-1 is an investigational proprietary formulation of tamoxifen for intravaginal menstruation. Approximately 4 million women in the U.S. have a history of invasive breast cancer. It's estimated that more than 66% are hormone receptor positive cases. VBA, which can lead to painful intercourse and associated interpersonal distress, is prevalent in postmenopausal breast cancer survivors with rates estimated at 42% to 70%. These women are generally not candidates for hormone-containing therapies despite their vaginal atrophy symptoms, as the use of estrogen in any form is often contraindicated for hormone receptor-positive breast cancer patients and survivors. So there is a clear unmet medical need for an effective non-hormonal treatment for VBA. And in November of 2022, we announced the positive top-line results from our Phase 1-2 study of DARE VBA-1. In that study, DARE VBA-1 demonstrated improvement in vaginal cytology parameters and bothersome symptoms of VBA, supporting the ongoing development. Following clinical development, we intend to similarly leverage the existing safety and efficacy data on the active ingredients in DER-VVA1 Tamoxifen, and again, to utilize the FDA's 505 pathway to obtain marketing approval of DER-VVA1 in the US. As we continue to engage with the FDA on the IND process this year, we'll provide additional updates on the timeline to phase two. The last development candidate I'd like to highlight is DER-PDM1. are an investigational product to treat primary dysmenorrhea or menstrual cramps by delivering the NSAID diclofenac vaginally, utilizing our proprietary hydrogel formulation, the same formulation technology that is used in Dashiato. We initiated a phase one study of JRPVM1 this year in Australia, and top line data are also expected this year. Primary dysmenorrhea is defined as painful menstruation, and women with normal pelvic anatomy typically described as cramping pain in the lower abdomen before or during menstrual period. Recent market research suggests that the global market for dysmenorrhea treatment is estimated to be valued at $13 billion in 2022 and that the size of this market is expected to increase to $28 billion in 2029. Primary dysmenorrhea usually begins during adolescence. and is a leading cause of recurrent short-term school absence in adolescent girls and a common problem in women of reproductive age. According to the American College of Obstetrics and Gynecologists Committee on Adolescent Health Care, it's the most common menstrual symptom among adolescent girls and young women, and most adolescents experiencing it have primary dysmenorrhea. The prevalence rates vary, but they range from 15% to 90%. The most common interventions for temporary relief for the painful symptoms include oral NSAIDs or hormonal contraceptives, which often can produce undesirable side effects. Oral NSAIDs, which are available over the counter, may cause an increased risk of gastrointestinal adverse events, including nausea, vomiting, bloating, or ulcerations. And hormonal contraceptives can also produce a number of undesirable side effects. So by leveraging a vaginal route administration, we believe we can provide a localized treatment option that addresses The pain-related symptoms of the condition while minimizing side effects commonly seen with the oral medications. Because there are currently no FDA-approved vaginal diclofenac treatment options for primary dysmenorrhea, DARE PDM-1 has the potential to be a first-in-category product, delivering diclofenac in a convenient vaginal format that may extend the duration of pain relief and reduce side effects commonly associated with the oral delivery of NSAIDs. Now, in my opening comments, I noted that part of our strategy is to identify promising candidates that can be developed efficiently in terms of time and cost. The ability to leverage our hydrogel platform technology that has recently undergone successful preclinical and clinical testing and regulatory review could offer both time and cost savings and advantages in the development of new candidates to address meaningful unmet needs in women's health. It is our hope that the development of DARE PDM-1 and DARE LBT-1, which I have not discussed today, but similarly relies on the hydrogel platform, will benefit from the use of a technology that has already been closely evaluated. I will now turn it over to John to provide an overview of the two license agreements we have in place for commercialization of Zasciato and Oviprene, respectively.

Thank you, Sabrina. As Sabrina outlined, we strive to develop differentiated first-line or first-in-category products. We believe this creates optionality for our commercialization strategy by allowing us to enter into commercialization agreements, as we have with Zasciato and Oviprene, on a product-by-product basis and in no circumstances where we believe a collaborator with an established commercial capability in women's health is the most effective and efficient way to bring a DARI product to market. and the optimum way to provide value to DARE stakeholders. Our model gives us the flexibility to work with top commercial companies in women's health for certain products, but also directly engage in commercial activities for other DARE products when we believe it's most appropriate strategy given the target product profile and the stage of development within our portfolio. As Sabrina outlined, we retain this level of optionality with the remaining 11 development stage product candidates in our portfolio. To date, we have entered into commercialization license agreements with what we believe to be are two of the best commercial companies in women's health. The value of having the breadth and experience of a women's health commercial market leader behind the brand is clear when we consider the Zasciato go-to-market strategy. We continue to remain excited about Zasciato's launch as we look forward to seeing Zasciato added to the healthcare providers armamentarium. As Sabrina noted, Organon has been working on launch activities, taking a holistic approach to the product's introduction, which will include direct selling, which is also known as personal promotion, as well as non-personal promotion efforts, and utilizing key digital platforms as well as payer and healthcare provider channels. Organon has what we believe to be a truly integrated go-to-market plan targeting all of the key stakeholders, which are the healthcare providers, the payers, and the patients in order to quickly drive interest and awareness in the brand. And importantly, we have reported previously, Organon's market access team has been meeting with health plans and PBMs to review Zosciato and obtain competitive coverage in the bacterial vaginosis category, which is critical to support patient access and product pull-through, as Sabrina mentioned earlier. Organon will leverage its established Nexplanon sales team to maximize Zosciato uptake at launch and they believe there's roughly a 90% overlap of those healthcare providers who are already prescribing Nexplan and have the potential to be Zosciato prescribers. That strong relationship with the sales team and the provider relationships they have in place is expected to enable access to these HCPs and coupled with Organon's payer outreach and planned patient-centered activities, we think that allow us to be well positioned for in-market success, and we look forward to Organon launching the brand by the end of the second quarter. Under our license agreement with Organon to commercialize Zasciato, we received a $10 million cash payment from Organon after the license became effective in June, and we are entitled to receive $2.5 million following the first commercial sale. We are also eligible to receive potential additional milestone payments of up to $180 million as well as tiered double-digit royalties based on net sales. Let me transition now to pre-commercialization activities underway for Overprene, our novel hormone-free monthly intravaginal contraceptive candidate whose U.S. commercial rights are under a license agreement with Bayer. As a reminder, as part of our license agreement with Bayer to commercialize Overprene in the U.S., Bayer currently supports the Overprene program by providing up to 80 hours per week of an advisory capacity giving DARE access to Bayer's extensive clinical, regulatory, manufacturing, and commercialization resources while we retain control over Overprin's development and regulatory approval process. Bayer has the right to obtain exclusive rights to commercialize Overprin in the U.S. following the completion of a pivotal Phase III study by making a $20 million payment to DARE. Thereafter, we will be entitled to receive commercial milestone payments potentially totaling $310 million in addition to double-digit tiered royalties based on net sales. Bayer has initiated activities to gain meaningful market and key stakeholder insights. Bayer continues to be a great collaborator, including recently sharing important commercial input that we were able to leverage for the phase three study design. And with that, I'll turn it over to Lisa for a financial update.