Daré Bioscience, Inc. (NASDAQ:DARE) Q1 2023 Earnings Call Transcript

Daré Bioscience, Inc. (NASDAQ:DARE) Q1 2023 Earnings Call Transcript May 11, 2023

Daré Bioscience, Inc. beats earnings expectations. Reported EPS is $-0.09, expectations were $-0.1.

Operator: Welcome to the conference call hosted by Daré Bioscience to review the Company’s Financial Results for the Quarter Ended March 31, 2023, and to provide a General Business Update. This call is being recorded. My name is Mallory and I will be your operator today. With us today are Sabrina Martucci Johnson, Daré’s President and Chief Executive Officer; John Fair, Daré’s Chief Commercial Officer; and Lisa Walters-Hoffert, Daré’s Chief Financial Officer. Ms. Johnson, please proceed.

Sabrina Martucci Johnson: Thank you. Good afternoon and welcome to the financial results and business update call for the quarter ended March 31, 2023 for Daré Bioscience. Our plan today is to review our first quarter results, discuss development since our recent call on March and 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 the 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 Form 10-Q for the year ended March 31, 2023 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, May 11, 2023. Daré undertakes no obligation to update any forward-looking statements to reflect new information or developments after this call, except as required by law. As a reminder, Daré’s diversified portfolio, which includes one FDA-approved product and 12 development stage candidates, three of which are in or nearing Phase 3 clinical development is focused solely and squarely on women’s health and is built upon the following core principles.

Each product candidate must address a meaningful market opportunity in the form of a persistent unmet need. Each product candidate must have the potential to be first line or first in category or both, because we seek to deliver a clear improvement over the standard of care. And ideally, each product candidate has demonstrated proof of concept and/or uses while characterized active pharmaceutical ingredients which can mitigate development, time, cost, and even risk. Our current innovation efforts are focused in contraception, vaginal health, reproductive health, menopause, sexual health and fertility. On our recent 2022 financial results and update call, we discussed the key milestones anticipated for the year 2023. Phase 2b RESPOND study top line results for our investigational Sildenafil Cream for female sexual arousal disorder, the U.S. launch of XACIATO by Organon.

The initiation of the Phase 3 clinical study of Ovaprene are investigational potential first-in category, hormone-free monthly, intravaginal contraceptive whose U.S. commercial rights are under a license agreement with Bayer, which we expect will be the single pivotal study to support Ovaprene’s pre-market application. IND-related activities for DARE-HRT1, which is our investigational 28 day intravaginal ring for hormone therapy for the vasomotor symptoms of menopause and IND-related activities for DARE-VVA1, our investigational hormone-free intravaginally administered treatment for vulvar and vaginal atrophy as well as our Phase 3 related clinical study plans for the candidate DARE-HRT1 and Phase 2 clinical study plans for DARE-VVA1. And additionally, DARE-PDM1, which is our investigational vaginal hydrogel formulation of diclofenac to treat primary dysmenorrhea, or menstrual cramps, the Phase 1 study conduct, and the top line data this year.

On today’s call, Lisa will review our first quarter 2023 financial results shortly, but we will otherwise focus on our anticipated milestones for this quarter, this second quarter of 2023. So namely, we’ll spend our time today on the Sildenafil Cream 3.6%, Phase 2b RESPOND study top line results, and the commercial launch of XACIATO in the U.S. by Organon. We’ll start with the Sildenafil Cream update and we will review both the exploratory Phase 2b RESPOND study objectives to provide context for the anticipated upcoming top line data readout. And as importantly, we’ll talk about the market dynamics for female sexual arousal disorder, which will highlight why we’re so excited to be conducting this Phase 2b study for this yet unserved indication that’s analogous to erectile dysfunction in men.

I’ll then turn the call over to John, who will provide an update on Organon XACIATO launch activities. With Sildenafil Cream 3.6%, we’re looking to address the lack of physical genital arousal response and sensations and the associated distress that are the hallmark of female sexual arousal disorder or FSAD. As I mentioned upfront, FSAD is analogous to erectile dysfunction or ED in men, both in terms of the pathophysiology of the condition as well as the target pharmacology and the addressable markets are also quite comparable in size. As we approach the Phase 2b top line data readout expected this quarter, we wanted to give you a sense of what you can expect. First, by way of refresher, previously conducted studies by Daré and our licensor, SST, demonstrated that this cream formulation of sildenafil, which is the same active ingredient as in Viagra, increased blood flow to the female genital tissue, both when assessed to be 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, increasing blood flow. Obviously, vaginal probes and genital temperature sensors are not practical endpoints for a Phase 3 program. Thus, the exploratory Phase 2b study was designed to evaluate the performance of Sildenafil Cream and to evaluate a number of different potential ways to ask women questions about their genital sensations and improvements, which referred to as patient reported outcomes in their at-home setting. So this way we could identify and select the appropriate patient reported outcomes to take forward into the Phase 3 program. So that’s what we’re expecting in the Phase 2b read out. So as we wait for the Phase 2b respond data readout, it’s a great time to also remind everyone why we’re so excited about the FSAD opportunity.

We’ve mentioned on numerous calls that it’s our belief that the FSAD market could be as large or larger in terms of potential patients as the ED market. We’ve also mentioned that our product candidate Sildenafil Cream, 3.6% is the only development stage program to our knowledge that is specifically designed to address the lack of genital arousal symptoms associated with FSAD. As I mentioned, sildenafil is the active ingredient in Viagra and our innovative topical cream formulation for women is designed to be used on demand prior to sexual activity and to deliver sildenafil directly to the genital tissue to facilitate vasodilation and increase blood flow directly where needed to improve the physical arousal response to address the lack of the those genital arousal sensations commonly associated with FSAD.

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So Sildenafil Cream has the potential to be the first FDA-approved product to treat FSAD and create an entirely new market of comparable addressable market size as ED. To put some of the market dynamics into context, we only need to look back to the launch of Viagra in 1998. According to an article published at that time in CNNMoney, there were 2.7 million prescriptions filled for Viagra in its first full quarter on the market. And at that time, that was the most prescriptions ever for any pharmaceutical product in its first quarter on the market. According to the same source, more than 160,000 physicians prescribed the product during that period of time, making it one of the most successful product launches in history and helping to double Pfizer’s market cap.

It can be challenging to be first as a drug developer blazing a new path as we are with our exploratory Phase 2b study where as I mentioned, we need to evaluate a number of different potential ways to ask women questions about their genital sensations and improvements in order to identify and select the appropriate patient reported outcomes to take forward into the Phase 3 program. But that level of uptake that I described in the Viagra launch from both providers and patients is incredibly impressive. And we see a number of similarities between ED and FSAD markets. To principally in ED a lack of viable pharmaceutical intervention created a situation where before Viagra, men had a significant condition, which often led to depression, isolation and frustration.

As is now the case with women with FSAD, without a viable intervention for ED like Viagra, men were reluctant to have a conversation or ask their provider for help or information. According to a 2004 study conducted by the British Medical Journal, the authors noted that men reported that ED affected their personal relationships, often left them feeling embarrassed and they generally suffered in silence as many men felt unable to talk to their partners or friends about their condition. The authors also noted that once Viagra became available and when it provided symptom relief, men reported feeling happy and elating, elated as well as great improvements in their wellbeing. These findings mirror the insights that we have uncovered about FSAD.

We know that women are similarly reluctant to speak about their condition with their partners and often report feeling dissatisfaction with their sex lives, unhappiness and general frustration due to their sexual problems. We also believe that without an FDA approved intervention, women are left alone to suffer in silence and are often affected by a feeling of shame or embarrassment. Given the similarities of ED and FSAD in terms of the pathophysiology of the condition as well as the psychological and emotional impact that we’ve been discussing, we believe there is enormous unmet need and we see the potential for a large amount of pent-up demand for a product like Sildenafil Cream. Therefore, we’re excited to bring our exploratory Phase 2b study to conclusion, this quarter we plan as the first step to report the top line data for a number of the assessment tools that we utilized in the study.

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 end points to evaluate in the Phase 3 program. In addition to the Phase 2b study where the product was used at home, we recently announced the initiation of a supplemental thermography study in a clinical study in a clinical setting. This Phase 1 thermography study of Sildenafil Cream is expected to enroll around 15 women and to be completed this year. These data are an important part of our comprehensive clinical development and regulatory plan for Sildenafil Cream and now add to our existing clinical and non-clinical data package to support the ongoing development program.

These data are expected to compliment the forthcoming clinical findings from our Phase 2b respond trial in preparation for a 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 with no FDA-approved option to address their condition. Our goal is for Sildenafil Cream to be the first FDA-approved product for women with FSAD as Viagra was for men with ED. Now, we’re not planning on providing detailed updates on the other development programs today, but I do want to note that we’ve been enjoying working with our collaborator, NICHD of the NIH on the Ovaprene pivotal study start planned for later this year and we continue to expect to commence patient enrollment in mid-2023 and what we expect to be the single pivotal contraceptive clinical study required to support the PMA submission for registration.

I also want to mention that we are thrilled with the interest in our DARE-PDM1 study that is underway in Australia. As a reminder, this is our investigational product to treat primary dysmenorrhea, or menstrual cramps by delivering the non-steroidal anti-inflammatory drug diclofenac vaginally, using our proprietary hydrogel formulation that same formulation technology that is used in XACIATO. The top-line data are expected this year and recent market research suggests that the global market for dysmenorrhea treatment was estimated to be valued at $13 billion in 2022, and that the size of this market is expected to increase to $28 billion by 2029. So with those updates on the development programs, I will now turn it over to John to provide a commercial update on the XACIATO launch activities.

John Fair: Thank you, Sabrina. As a reminder, XACIATO clindamycin phosphate vaginal gel is lincosamide 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 XACIATO story is 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. However, a large number of women with the condition are underserved by currently available products. We believe that we could deliver a novel option, understanding that differentiation drives value. We designed a Phase 3 study capable of generating the data necessary to support a compelling label.

We believe that if we were successful in our clinical development planning, we would be able to create an opportunity for a commercialization collaboration that could drive value. And in regard to securing a collaborator capable of maximizing value, we believe we have been very successful. We are thrilled that the women’s health company Organon is launching XACIATO and that they will leverage their established Nexplanon sales team to accelerate XACIATO uptake. With the manufacturing validation activities required to support the commercial launch completed, commercial launch activities are progressing. Given that the sales team for Nexplanon will be launching XACIATO, we expect that the XACIATO team sales team will – we expect that XACIATO will benefit from Organon’s track record of commercial success in the branded women’s health category.

Organon believes there’s a roughly 90% overlap of healthcare providers or HCPs who prescribe Nexplanon and have the potential to be prescribers of XACIATO based on provider treatment patterns. Because of the strong relationships the sales team has with these HCPs in the women’s health space, we expect Organon to be well positioned to inform these HCPs about XACIATO ultimately providing benefits for their patients. As I mentioned on our last update call, Organon has what we believe to be a truly integrated go-to-market plan, targeting all of the key stakeholders, HCPs, payers, and patients in order to quickly drive interest and awareness in XACIATO. With a strong product label and a powerful commercial partner we are excited about the launch of XACIATO expected this quarter.

And Organon has been working on launch activities. They’re taking a holistic approach to the products’ introduction, including ongoing work in the areas of non-sales force related promotional activities and utilization of key symposia and conference events. Organon had a very prominent precedence at a recent payer focused industry conference called AMCP, which stands for the Academy of Managed Care Pharmacy. This annual event is one of the key conferences where payers and manufacturers can interact and share key pharmacoeconomic insights and learnings across a broad range of products and therapeutic areas. Organon shared important insights into the pharmacoeconomic and socioeconomic impact of a bacterial vaginosis diagnosis. And I attended this conference personally and I really believe this information was very well received by many of the key stakeholders attending the conference as well.

In addition to their presence at AMCP and their ongoing work with payers, Organon is planning activities in support of the physician community, including their branded exhibit at the Marquee Conference in Women’s Health, the American College of Obstetricians and Gynecologists, Annual Clinical & Scientific Meeting, commonly referred to in our field as the ACOG meeting. The upcoming ACOG meeting, which takes place later this month, provides unique opportunities to interact with key HCPs focused in women’s health, which is critical given the role that OB/GYN offices play in treating patients with bacterial vaginosis. And finally, I know that we touched on this earlier, but it feel it’s worth repeating, Organon will leverage its established Nexplanon sales team, which currently focuses on contraception to maximize XACIATO uptake at launch.

And because the vast majority of sufferers of bacterial vaginosis are also women of reproductive age, the next one on sales force is well positioned to leverage their existing relationships with HCPs in women’s health. So in summary, we believe that XACIATO should be well positioned for commercial success given the knowledge and experience Organon’s Nexplanon sales team, coupled with Organon’s payer outreach provider and patient-centered initiatives. We are working towards the first commercial sale before the end of the second quarter. And with that, I will now turn the call over to Lisa to provide a financial update.

Lisa Walters-Hoffert: Thank you John, and thanks everyone for joining us today. I would now like to summarize Daré’s financial results for the quarter ended March 31, 2023, which I will refer to as the current quarter or first quarter. As you know Daré’s business model is to assemble and advance a portfolio of differentiated product candidates that address meaningful unmet needs that we’ve identified in women’s health and then to monetize the value of those our portfolio’s, clinical and regulatory advances over both the near and long-term. The investment required to build an advanced portfolio include corporate overhead, portfolio acquisition and maintenance costs, and ongoing research and development or R&D expenses.

So during the first quarter of 2023, our general and administrative expenses or G&A were approximately $3.3 million. Our R&D expenses, which vary from period to period based on clinical, preclinical manufacturing, regulatory, and other activities across our entire portfolio were approximately $5 million and primarily reflected the costs of two of our later stage programs, including the ongoing Sildenafil Cream 3.6%, Phase 2b respond clinical trial and manufacturing and regulatory affairs activities related to Ovaprene. Our comprehensive loss for the quarter was approximately $8 million. We ended the first quarter with approximately $19.8 million in cash and cash equivalents, and we had approximately 86.3 million shares of common stock outstanding as of May 10.

In terms of upcoming milestones and future sources of cash under our license agreement with Organon to commercialize XACIATO, we are entitled to receive $2.5 million following first commercial sale. Thereafter, we will be eligible to receive potential additional milestone payments of up to $180 million, as well as tiered double-digit realties based on XACIATO’s net-net sales. We are continuing to explore a variety of options to fund our operations, advance our candidates, monetize the value of our assets and build shareholder value. As a reminder, these alternatives include, but are not limited to non-dilutive grants; equity sales, license agreement, structured financings, strategic collaborations and alliances. As we’ve noted previously, we will endeavor to be creative, collaborative, and opportunistic in seeking the capital needed to meet our objectives and build shareholder value.

We also encourage investors to review the more detailed discussion of our financials, our financial condition, liquidity, capital resources, and risk factors in our Form 10-Q for the quarter ended March 31, 2023, which we filed this afternoon, as well as our annual report on Form 10-K for the year ended December 31, 2022, which was filed on March 30, 2023. I would now like to turn the call back over to Mallory, the operator.

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Q&A Session

Operator: Thank you for attending the conference call at this time. [Operator Instructions] Your first question comes from the line of Catherine Novack with Jones Research.

Operator: Your next question comes from Kumar Raja with ROTH Capital.

Operator: Your next question comes from the line of Kemp Dolliver with Brookline Capital Markets.

Operator: Your last question comes from Doug Tsao with H.C. Wainwright.

Operator: There are no further questions at this time.

Sabrina Martucci Johnson: Great. Well thank – thanks first of all for the great questions, we really appreciated the opportunity to share our thoughts on some of the upcoming milestones this quarter and spending some time on that end this year. And thanks everyone for taking the time this afternoon to hear about the recent updates, and our ongoing commitment to drive value for all of Daré’s stakeholders. We’ve talked about the shareholders today, but obviously the women and the healthcare providers. And with our diverse portfolio, we really seek to bring to market differentiated prescription therapies that prioritize women’s health and wellbeing that expand the treatment options where none exist. Enhance outcomes where current standard of care has meaningful shortcomings and improve ease of use for women, where a more compelling form factor can drive adoption primarily in the areas we’ve been talking about.

And some that we haven’t touched on today, but contraception, vaginal health, reproductive health, menopause, sexual health and fertility. So, we very much look forward to keeping you updated on our progress on the milestones anticipated this year that I outlined earlier, which include the XACIATO product launch and first commercial sale, and milestones associated also with our three candidates in or nearing Phase 3 clinical development. And so to list all the milestones again for 2023 that we’ve talked about, we have the Phase 2b respond. Top line study results for Sildenafil Cream, study for female sexual arousal disorder. So this quarter is what we’re targeting on that. Similarly, this quarter, the U.S. first commercial sale of XACIATO by Organon.

In addition, as we’ve talked about the initiation of that Phase 3 clinical study of Ovaprene, which is our investigational potential first in category hormone-free monthly intravaginal contraceptive whose U.S. commercial rights surrender a license agreement with Bayer. And again, as we’ve talked about, we expect that to be a single pivotal study to support Ovaprene’s pre-market application. We didn’t other than to mention them talk about these in detail today. But as in – we mentioned the IND-related activities for DARE-HRT1, which is our investigational 28-day intravaginal ring for hormone therapy for the vasomotor symptoms and menopause. And DARE-VVA1 are investigational hormone-free intravaginal administer treatment for vulvar and vaginal atrophy.

So Phase 3 and Phase 2 activities respectively for those and clinical study initiation plans for those candidates. And then mentioned PDM1, which is our investigational vaginal hydrogel formulation of diclofenac for menstrual cramps very much looking forward to that Phase 1 study completion, which is underway right now, and then the top line data this year. So that’s all just for 2023. So thank you again for your time today and we look forward to keeping you updated.

Operator: This concludes today’s conference call. You may now disconnect.