Dare Bioscience, Inc.

Welcome to the conference call hosted by DARE Bioscience to review the company's fourth quarter financial results and to provide a general business update. This call is being recorded. My name is Lisa and I will be your operator today. With us today from DARE are Sabrina Martucci-Johnson, President and Chief Executive Officer, and Marty Herring-Layton, Chief Accounting Officer. Ms. Johnson, please proceed.

Thank you. Good afternoon and welcome to the DARI Bioscience Financial Results and Business Update call for the year ended December 31st, 2023. Today, we'll review our financial results for 2023 and discuss developments and expectations for our pipeline and portfolio. 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 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 Form 10-K for the year ended December 31, 2023, 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 28, 2024. DARE 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, women's health is our sole focus at DARE. Women's health products make up 27% of total Blockbuster products. while contributing to 35% of total blockbuster sales. And there continue to be many unmet needs in the market. To our knowledge, DARI is the only publicly traded company focused solely on women's health pharmaceutical product development broadly. And we remain committed to advancing through clinical development, regulatory review, and ultimately to market disruptive products for women. Our commitment and focus is to make a difference for women in a relatively efficient timeline by leveraging the basic science and pharmacology that is understood about certain active pharmaceutical ingredients and marketed products to accelerate innovative treatments that women want and need. We seek to optimize these treatments for our target indications to enhance outcomes, convenience, and side effect profile. or to address a novel indication where the pharmacology is well-suited but has not previously been applied to the indication in question for women. We believe we have built a premier company in women's health with the broadest portfolio of potential high-impact first in category product candidates, many of which have already demonstrated proof of concept, and that our robust pipeline of product candidates positions us well for the short, medium, and long-term. I'm excited to share today the strides we made in 2023 to advance innovative therapies for women, updates on our most promising near-term opportunities, and the milestones we look forward to in 2024. In 2023 alone, DARI had 15 interactions with the FDA across six product candidate syndications. completed the Phase 2B study of our investigational subendophyll cream product for female sexual arousal disorder, and the Phase 1 study of our investigational vaginal diclofenac product for menstrual pain. We received IND clearance for DER-VVA1, our hormone-free candidate for sexual pain, and we commenced the Phase 3 study for our investigational hormone-free monthly contraceptive candidate, oviprene. Before we continue, I also want to acknowledge a few recent industry developments that underscore what a fantastic time it is to be working in women's health and the significant opportunity in this space. As you may know, in November of 2023, the White House announced the first ever White House Initiative on Women's Health Research, an effort led by First Lady Dr. Jill Biden and the White House Gender Policy Council to bring together congressional leaders, the private sector, research institutions, and philanthropy to, quote, fundamentally change how we approach and fund women's health research. In February 2024, Dara was invited to participate in an ARPA-H ideation event where Dr. Jill Biden announced, along with ARPA-H leadership, the 100 million deployment of capital for women's health. Earlier this month, the President called on Congress to make bold transformative investment of 12 billion in new funding for women's health research. And just last week, I had the honor and privilege of attending a reception at the White House in honor of Women's History Month, where President Biden signed an executive order dedicated to advancing women's health research. It's encouraging to see further comprehensive executive action aimed at increasing investments in women's health and making it a priority in various ways because initiatives like these bring focus, bring financial support for the entire ecosystem to boldly innovate for women. Even more, these positive tailwinds can be expected to buoy investor interest and funding in the sector long-term. Most importantly, we believe our achievements in 2023 demonstrate that our approach to accelerating clinical development works and that our leading programs have disruptive potential in the conditions and populations they aim to treat, along with significant revenue potential if approved. I'm going to put those 2023 accomplishments and our anticipated 2024 milestones into further perspective shortly. particularly in the context of metrics that are important to any current or future shareholder, specifically the addressable markets, their probability of success, and what it will take to advance the programs with a focus on our on-market assets, Zasciato, and our Phase III assets, Oviprene and Sildenafilprene. Before I do so, I'm going to first turn it over to our Chief Accounting Officer, Marty, to review the 2023 financial results.

Thanks, Sabrina, and thanks, everyone, for joining us today. By way of introduction, my name is Marty Herring-Layton, and I've been at DARE for more than six years, previously serving as the Vice President of Accounting and Finance since October 2018. I am excited to be here with you all. I will summarize DARI's financial results for the full year 2023, but before I do, I would like to put them in context for those of you who are newer to the story. DARI's business strategy is to assemble and advance a portfolio of differentiated product candidates that address meaningful unmet needs we've identified in women's health and then monetize the value of our portfolio's clinical and regulatory advances over the near and long term. The investment required to build and advance a portfolio includes corporate overhead, portfolio acquisition and maintenance costs, and ongoing research and development or R&D expenses. During 2023, we recognized total revenue of approximately $2.8 million, which included a $1 million payment in July 2023 and an additional $1.8 million milestone payment in October 2023 from our commercial collaborator, Organon, relating to Zasciato. the first FDA-approved product to emerge from our portfolio, as well as a nominal amount of royalty revenues based on net sales of Zosciato during the fourth quarter. Zosciato became more widely available by prescription to treat bacterial vaginosis in January of this year. Our general and administrative, or G&A, expenses were approximately $12.1 million, which was up slightly compared to the prior year. Our R&D expenses across our entire portfolio were approximately $21.5 million, and primarily reflected the costs of our Phase I and Phase IIb studies of sildenafil cream, our Phase I study of DER PDM-1 vaginal diclofenac for menstrual cramping, and manufacturing activities, as well as preparing for and beginning enrollment in our Phase III study of our intervaginal hormone-free monthly contraceptive candidate, oviprene. As a reminder, R&D expenses vary from period to period based on our clinical, preclinical, manufacturing, regulatory, and other development activities. We reported a net loss for 2023 of $30.1 million and ended the year with approximately $10.5 million in cash and cash equivalents. During the year, we received approximately $4.7 million in non-dilutive grant funding. We also completed a $7 million registered direct offering in September and a $12 million royalty-backed investment in December, of which we took down $5 million in December. The remaining $7 million is available to us to take down through three tranches over time at DARE's option. The financing structure entitles the investor to a percentage of the royalty and milestone payments to be received by DARE under its global license agreement for Zasciata with Organon, only until the investor achieves a targeted return on investment. As of March 27, 2024, DARE had approximately 100 million shares of common stock outstanding. Since our inception, we have made fiscal responsibility a top priority, maintaining a lean and focused team and managing our overhead costs closely. To that end, we expect a reduction in our 2024 G&A expenses to approximately $10 million, which to be clear, does not reflect 10 million in capital required to fund G&A expenses since approximately $3 million of that estimate is estimated accrual-based, non-cash expenses. In addition, as previously noted, our R&D expenditure is predicated on ongoing development programs. In 2023, we had four active clinical studies that contributed to our $21.5 million of R&D expenditures. In 2024, our only active clinical study at this time is our Phase III pivotal oviprene study. for which we have already remitted in prior years all but half a million of funds due to the NIH under our Cooperative Research and Development Agreement. And therefore, planned oviprene expenses in the 2024 year will be primarily associated with certain manufacturing activities. Apart from oviprene-related expenses, our currently projected 2024 R&D expenses are primarily carryover slash closeout expenses from the studies completed in 2023. Therefore, until such time as we commence an additional late-stage clinical study, we anticipate 2024 R&D expenses to be considerably less than the 2023 R&D expenses. Looking ahead, we will continue to evaluate a wide range of financing opportunities, including more creative and innovative alternatives to fund our broad portfolio of differentiated product candidates, which we believe opens the door to financing opportunities that other companies may not have access to. These opportunities may include, but are not limited to, non-dilutive grants, as we have for many of our preclinical programs, and these earlier stage programs with grant funding enhance our pipeline, equity sales, license agreements, structured financings, and strategic collaborations or alliances. We will continue to explore a variety of options to fund our operations, advance our candidates, monetize the value of our assets, and build shareholder value. As we've said previously, we look to be creative, collaborative, and opportunistic in seeking the capital needed to meet our objectives and to build shareholder value. We believe our December financing met that goal and will work to identify similar opportunities moving forward. We also encourage investors to review the more detailed discussion of our financial condition, liquidity, capital resources, and risk factors on our Form 10-K for the year-ended December 31st 2023, which we filed this afternoon. I would now like to turn the call back over to Sabrina.