Daré Bioscience, Inc. (DARE) Earnings Call Transcript

Okay. We are ready to get started. Welcome, everyone, and thank you for joining the Daré Bioscience Virtual Bus Tour. My name is Jenene Thomas. I am CEO of JTC IR, and I will be the moderator for today's event. So today, the company is excited to kick off the virtual bus tour starting with the West Coast stop. And for the format today, Sabrina Martucci Johnson, she is President and Chief Executive Officer of Daré Bioscience, will take you through the Daré story, and then I will open the event up for Q&A to take your questions. So now it is my pleasure to turn it over to you, Sabrina.

Great. Thank you. Thanks, everyone, for participating today. It's always a pleasure to share more about Daré Bioscience and the work that we do. So the presentation does contain forward-looking statements. So I do encourage you to look at our most recent SEC filings and our most recent 10-K for a full disclosure of the risks and uncertainties associated with an investment in Daré Bioscience. We are focused solely on advancing health care for women and specifically products for conditions that solely affect women where there's been significant unmet need. And what that means is our portfolio is very purpose-built for these conditions that are large unserved markets across women's health. I'm going to highlight a few things on today's webinar for you. First, we'll start with talking about really kind of the 4 pillars of what's exciting going on right now. One is commercial launches that are taking place right now. We have revenue commencing this summer, our first product launched earlier in the summer, and we have another coming soon. So we'll talk about that and what that means to the organization. Across the portfolio, everything we're working on for these conditions affecting women are based on clinical evidence, but we look always for the fastest way to get these products in the hands of women. And so we'll talk about what that means in terms of bringing products to market, sometimes with FDA approvals, sometimes it's what's called 503B compounding for prescription products and sometimes with nonprescriptions. But what they all have in common is that clinical basis and evidence basis. And that's really what drives us and drives the portfolio is we're looking for programs that are late stage and can come to market and are diversified across health care conditions in women. And we also leverage very strategically nondilutive funding that's available. There are significant grant dollars and foundation dollars available for conditions affecting women. In fact, we brought over $75 million into the portfolio just since 2018 across a variety of programs. So I mentioned upfront, we work across life stages in women's health, and we're really looking for solutions to fill therapeutic gaps in care. We're really a purpose-driven biotech company, looking to close those gaps where there's promising science and delivering that real-world solution. And again, across the life stage of women. So from contraception to sexual health, to vaginal health to fertility and menopause as well. So I'm going to highlight a few of the programs across the portfolio. And I'll spend a little more time today on the 2 on the top. So we'll talk about Flora Sync LF5, which is in the DARE to RESTORE family [ competitive ] launch. That's a vaginal probiotic capsule. We're also going to talk a little bit about DARE to PLAY, sildenafil cream. It's a first-of-its-kind sildenafil cream for women, and we are preparing for dispensing to commence later this summer. I do want to highlight a couple of the other programs, though. So we'll talk a little bit about a product for menopause, the first-of-its-kind once-a-month hormone therapy product for menopause with the hormones that women need together, that we're preparing for commercialization. And then I want to talk about 2 programs that are currently in clinical studies, Ovaprene, a first-of-its-kind non-hormonal once-a-month contraceptive for women. It's in a Phase III trial right now. It's the registration study and also a product to treat human papillomavirus infection, where there is no treatment available for human papillomavirus infection, which is the virus that causes cervical cancer. And we started a completely grant-funded clinical trial earlier this year. And I want to talk a little bit about pregnancy maintenance and specifically for fertility support and also maintaining pregnancy for women at risk of preterm birth and preparations underway for a Phase I that is NIH grant funded. So why women's health? And why now? Well, it's definitely a fantastic time to get to know Daré, just given everything we have going on in the portfolio right now, both commercially and also clinically. But why women's health? And what's really interesting about the category is it's such a significant market opportunity. And despite the fact that there's a lot of white space, only about 1% of private health care investment has gone into therapeutic solutions for women's health. Despite that, 27% of the prescription pharmaceutical products that generate over $500 million in annual revenue are for conditions affecting women. And that is not surprising if you think about the different aspects that women can experience across their lifespan from sexual health to contraception to fighting various infections and also menopause. And all of these typically are affecting tens of millions of women who are seeking solution. And the solutions have really been limited. And that's one of the reasons that there is so much nondilutive funding that we've been able to leverage. It's really to look at how we can help advance solutions where there are therapeutic gaps. And the grant funding that we brought into the portfolio, it's really important because it, one, validates the approach and the need that exists. And also, it helps to fund that research and advance those programs. And it's the diversity of funding that also matters. So it's quite significant from the Gates Foundation from different government agencies, ARPA-H and NIH and also broadly across the portfolio. So it's not about one specific program. It's about different categories of products for different indications. And the reason that, that funding is available to us is that we're really a data-driven development. And so we're doing the work. Our portfolio is built on science. It's built on clinical evidence. We take products where it makes sense through the FDA. And we back the products that we bring forward for women with clinical studies and clinical science. And that means also that we're generating proprietary data, and it helps us advance the products through various different pathways. The products that we're developing, though, often leverage known active pharmaceutical ingredients, so known medicines, but we're developing them for novel areas where there is no product available yet for women that's been clinically studied. A great example of that is our DARE TO PLAY sildenafil cream or we're using them for where there is no FDA-approved treatment whatsoever for that condition like we're doing with our human papillomavirus potential treatment or we're providing them in a very novel way like menopause hormone therapy once a month. And then as we think about how we commercialize the products, we really want to leverage a platform that can ensure that patients, health care providers have very great access and straightforward without friction to prescriptions where they're needed, product fulfillment and direct patient engagement. And we do that through the DARE Health Hub. So as I mentioned, it's very much a purpose-built women's health product ecosystem. So I want to spend a minute on the commercial products, and we'll talk about what's coming in development because it's that development pipeline that really feeds that commercial machine. So the Flora Sync LF5 is in our DARE to RESTORE family, and it is a vaginal probiotic capsule. So it's designed to restore microbiome balance and support lasting comfort. So a lot of us have heard a lot about probiotics and probiotics, we've heard about gut probiotics. The probiotics are also really important in the vaginal environment. A healthy vaginal environment can be very important in terms of maintaining pregnancy, helping prevent other types of infections that can happen. So really important to keep that really healthy microbiome balance. Most probiotics that are available for women, though, are oral strains. They're developed for gut. They're not developed for the vaginal environment. Flora Sync LF5 is -- so it's available without a prescription. It's a vaginal capsule that was formulated specifically using a strain that was derived from women who have self-reported never gotten used to infection, nice healthy vaginal microbiomes. And then it's been clinically studied. It's backed by over 30 years of probiotic research. And in the clinical study, 96% of women achieved that microbiome balance within just 3 courses and 90% maintained that out to 2 weeks. So it's available now on the DARE Health Hub. We just started making that available. And the next product that we're looking to have available targeting later this summer on the DARE Health Hub is our DARE TO PLAY sildenafil cream. So sildenafil is the active ingredient in Viagra, which so many of us have heard of, obviously, but it's formulated specifically for women. And so this is the first-of-its-kind arousal cream for women that has specifically been formulated into a cream that has been designed to be used on demand that increases blood flow to those general tissue within 10 to 15 minutes of application and that has been studied using FDA reviewed and clinically validated endpoints and demonstrated to improve arousal sensation in a well-tolerated formulation that, like I said, is used just on demand when she needs it. It's targeted to be available later this summer. We're making it available as a 503B compounded product while we're continuing the process forward towards an NDA pathway. And what that means is 503B compounding means that the product can be made available imminently. It follows the same quality standards that are required of prescription -- typical prescription pharmaceutical products in terms of quality and consistency. So health care providers and women can be confident they're getting the same thing every single time and then backed by that clinical science to demonstrate what the product does. And because of the work that we have done in terms of developing our products, running clinical studies and creating those trusted relationships with health care providers around our women's health solutions, it really allows us to turn those clinical relationships into really important commercial momentum. So we can leverage those clinical providers, those thought leaders, those long-standing relationships where they become peers talking about our technologies to other health care providers as well. And so we can really utilize that established network of those thought leaders and their ongoing presence at major conferences along with us. And that really helps us create a commercial advantage where we can leverage that existing provider network. And then by providing our products both through the DARE Health Hub, which we're going to talk about in a second, but also directly in the clinician offices where that makes sense, it really allows us to have that provider engagement, but also ensure that women have access to the product through a variety of trusted channels. And so as we think about that integrated platform, it's really designed for scalable growth across our portfolio of products. And so we can drive that patient acquisition, the engagement, the portfolio expansion through this unified women's health ecosystem. So it requires those provider relationships, right, that engagement with the health care provider that we have through our clinical programs and now through our clinical products that have been tested and evidence-based. We want to make sure that women have access regardless of whether they have a brick-and-mortar health care provider or they would prefer asynchronous telehealth, where they can complete a questionnaire within 10 minutes and have access to the product that way. So we also ensure that they have that convenient access with national reach. And that really means that we're leveraging a lot of digital marketing as well, consumer platforms, clinician influencers, which is very targeted and very scalable across the portfolio and across products. And then the DARE Health Hub really is that centralized fulfillment center that really allows a place where we can be doing both product education, selling directly. It's a cash pay portal. So it is that central commercial platform, but it also allows for prescription fulfillment, both from the health care provider. It's a central place where they can send their prescription in if it's a brick-and-mortar health care provider or a telehealth provider that's not part of our telehealth system or the patient can access telehealth directly there. They can also check on their prescription or check on their Flora Sync LF5, which is nonprescription also available. And that also means there's an opportunity for cross-selling on the platform. One of the most disruptive things to the vaginal microbiome is actually sexual activity. So it's a great place where they can both have access to DATE TO PLAY sildenafil cream, but also Flora Sync LF5 5. In terms of the development pipeline, that's really critical because it's that clinical-based development pipeline and evidence-based solutions that feed that commercial machine that we have, which this is really about the products, right? The commercial platform is there to make sure women have access to those products. So in clinical development right now in Phase III, which this is the registration trial for this product is Ovaprene. It's a once-a-month nonhormonal vaginal contraceptive. It's hormone-free. It has a really unique mechanism of activity where it's a physical barrier. It's something a woman inserts herself and removes herself once a month vaginally. So it consistently blocks burn, but then it also releases a spermostatic agent. So it interferes with sperm motility in action. It's been through 2 positive data safety monitoring board meetings to date in the Phase III trial. In both cases, they had us move forward without any changes to the study. And based on those interim looks at the data, it has an 86% to 91% typical use effectiveness. So to put that in perspective, that's in the same range as the most effective of the like nonhormonal on-demand methods. So that's fantastic. It also has an immediate return to fertility because there are no hormones in the product. And it has the potential to be the first FDA-approved monthly hormone-free contraceptive. To put that in perspective, the first once a month of contraceptive that had hormones, which was NuvaRing was nearly $1 billion brand at peak. I mentioned upfront human papillomavirus infection. We are very excited to be taking this product into clinical development. So human papillomavirus is a virus that causes cervical cancer. And despite that, there is no treatment for when a woman is tested positive for a high-risk HPV infection. She's told to wait until she develops precancer lesions on the cervix that then have to be surgically removed, which can lead to preterm birth and fertility and often is missed with that watchful waiting approach. And so this is a treatment option that we are investigating the woman can do at home over a course of treatment with this antiviral agent. The Phase II study is completely funded with a grant from ARPA-H and a contract with ARPA-H, which is a government agency. It's based on a pilot study that's been completed that demonstrated nice proof of concept and it has the potential to become the first FDA-approved pharmacologic treatment for high-risk HPV infection. And we expect to have data on this product next year on the trial. And I go to say Ovaprene, the last product we talked about, we're also expecting data next year on that Phase III trial. One of the next products for 2027 that we're looking to bring to market for women is something for menopause hormone therapy. So we've been hearing a lot about hormone therapy and the importance of hormone therapy with the black box removal from the FDA, demonstrating that it may be appropriate for more women than was originally envisioned. But nonetheless, there is actually no hormone therapy option available to women right now that actually meets the menopause society guidelines for ideally how women should have hormone therapy. And ideally, if it's a woman with the uterus, she should have something that is nonoral and it has both estradiol for the hormone effect, but also progesterone for safety in one product. And so this is a vaginal ring that's just a once-a-month product that a woman could use. It's been through clinical studies so far, demonstrated statistically significant improvement in hot flashes and night sweats and other vaginal symptoms as well and quality of life measures. We're looking to bring it forward as a 503B product as well, like we're doing with DARE to PLAY sildenafil cream while we continue the development program towards an NDA pathway. And then I want to mention just a couple of other things. Some of them cannot take hormone. So think about breast cancer survivors like hormone receptor-positive breast cancer survivors that are on long-term treatment for their breast cancer and where hormone therapy is really not recommended. But one of the most common symptoms often of those therapies that they take for their hormone receptor positive breast cancer is what are called genitourinary syndromes of menopause, even though even if they're young women and they're not a menopause yet, which is basically sexual pain that can be caused from the changes that happen in their tissue because of the treatments that they're on. And so this is a non-hormonal approach that has been through a Phase I/II study and demonstrated statistically significant improvements in symptoms associated with the genitourinary syndrome of menopause and has potential to be the first intravaginal treatment for that condition, and we have Phase II preparations underway for this product. And then lastly, I want to talk about our progesterone vaginal ring. So progesterone is commonly used as part of in vitro fertilization, IVF regimens, very painful injections. It's also used sometimes to support pregnancy in women who are at high risk of preterm birth in their pregnancies. This is a vaginal ring form of that. So convenience -- very convenient route of administration as an alternative to those daily injections of vaginal gels. We are preparing for a Phase I study that is funded by the NIH. A number of other earlier-stage programs, similar to everything else, really first-in-class opportunities where we're filling those therapeutic gaps in care for women. Most of these are grant funded, as you can see. And then I want to highlight a couple of things on the corporate side. Our last financial statements, $18.5 million in cash, about 50 million shares outstanding. In terms of the management team, very highly experienced team in pharmaceutical product development and commercialization and women's health specialization where it's relevant as well. And as I mentioned right upfront, it's just a really great time to get to know Daré. We have multiple near-term catalysts that really have potential for quite meaningful value drivers across the portfolio, both on the commercial side and importantly, also on the development side. And that's a really rare thing to see in companies that are clinically developing solutions. So DARE to PLAY sildenafil cream, which is our first-of-a-kind arousal cream is targeted to start having those prescriptions to start dispensing later this summer. We already have prescriptions in the system from health care providers and women who are very excited to get their hands on this product. Flora Sync LF5 5 and the DARE TO RESTORE family is live now. So it is available. It's a nonprescription and available on the DARE Health Hub right now for ordering. Ovaprene and DARE-HPV, both of those in clinical studies right now. We expect data readouts on both of those programs next year. And we're also looking towards -- forward towards that commercial launch that we're targeting for our menopause hormone therapy product in the DARE to PLAY sildenafil cream family next year. And so I want to close with why Daré, why now? It is such an interesting time as we're transitioning from what was really historically a clinical stage company to now a commercial stage company with 2 revenue-generating products going live this year and purpose-built pipeline for women that is advancing with 2 clinical readouts next year. And we're really set up to scale because with the DARE Health Hub and that telehealth infrastructure, it's really leaning into where women are getting their care today. And we're continuing to leverage that significant nondilutive funding across the portfolio, including programs like Ovaprene and DARE-HPV that are in clinical development, and that really helps advance those programs in a thoughtful way to our shareholders because it does not require shareholder capital. So with that, I will pause and happy to address any questions.

Perfect. So now I will open up for the Q&A session. [Operator Instructions] All right. So our first question is, thank you for the opportunity to attend this webinar. You mentioned your first commercial launch. When do you expect to see meaningful revenue from Flora Sync?

Yes, great question. So we just went live with that product. So it's definitely in the early days that we just started to -- we announced the July 1, basically. So we're in the very first month of launch. So what we will be doing is we'll continue to give really quarterly updates on our earnings calls as we know when launches like this early days. So the things we're really going to be watching is a few things. We're going to be watching and giving some guidance on behavior. So reorders, right, frequency of ordering, where we're seeing the orders coming from. We do have a couple of channels at play here. So women -- I talked about the DARE Health Hub, but there are also clinicians that are very interested in offering the product in their offices as well. So as we continue to give updates on that, we're really focused on where we're seeing traction, where we're seeing momentum and some of those important metrics like cost of acquisition of our customers and then also what kind of usage patterns we're seeing. So more to follow on that.

Okay. Our next question is, can you address the NASDAQ delisting notice due to low equity and management's plans?

Yes, definitely. And that's -- obviously, that's a great question. So to give some perspective on that, as we previously discussed, we've requested a hearing with the NASDAQ hearing panel regarding our continued listing. There are certain thresholds that companies have to meet to be listed on NASDAQ. So the hearing is part of the normal NASDAQ process when there's been a deficiency on one of those. And under the strategic guidance of our listing advisers, we're continuing to work cooperatively with NASDAQ throughout this process. Our NASDAQ listing is very important to us. I definitely want to stress that. So we're very committed to taking the appropriate steps to address that listing requirement. So in the meantime, and simultaneously, our entire team remains focused on executing our strategy, which is so important in earnest. As you know, right now, we're expanding commercial initiatives. We're advancing our product portfolio and clinical development, and we're continuing to work on strengthening our financial position and really creating that long-term value for shareholders. So we will continue to keep shareholders updated on the NASDAQ process. And as I mentioned, the next step is a hearing before the panel.

Our next question is the clinical data for Flora Sync publicly available? And was it tested in women with recurrent BV?

The clinical study is available, and it's -- there's a link available on our website as well. So it's right on the product page for Flora Sync. So if you go to darebioscience.com and you go to the products page and you look at Flora Sync and if you scroll down, there's a link right there to the publication. There's 2 publications link there on the website. One, looking at studies that were done in the laboratory, so in vitro, not in humans that looked at the activity of that probiotic on things in a [indiscernible] and all kinds of types of cultures of things that could exist in the vaginal microbiome. So not just things like bacteria, like bacteria that can cause bacterial vaginosis, but also looking at things like used in other culprits that can be present. So that's published and that's available. And then the clinical study is also published and available. And it is not conducted in women who have bacterial vaginosis, but it does look specifically at traits in the vaginal microbiome in the women who are studied and then that restoration to a healthy vaginal microbiome using clinical outcomes.

Okay. Can you discuss the Reg A offering? Can you share more about it and what it is and how to participate?

Yes. So a Regulation A offering is a type of offering that can be made available to anyone. So a typical public offering is only available to accredited investors that -- or institutional funds. And we're really a purpose-driven biotech, right? Our sole focus is to close the gap between promising science and real-world solutions for women. And that also means that our customers also may be very interested in having an opportunity to be an owner, right, in the company that is developing products for them very thoughtfully. And so the Reg A offering is a way for us to do that is to make this available to not just institutions, not just very high net worth accredited investors, but the everyday person who really wants to be an owner in this and who wants to put their hand up and say, women's health matters. And I also believe that not only does it matter, but this is an investment-worthy opportunity to participate in that. And so the way it works is all of the information, there's important disclosures in the offering circular that's on the website. So if you go again to the darebioscience.com, is the website address. If you go to the website and you -- there's an invest mail button if you click that, it very importantly takes you to the offering circular that has all the details on the offering and how it works. But basically, the offering, it's for a unit and the unit contains 2 shares of stock and 2 warrants to purchase shares at a future time and a future price.

Okay. What are the proactive steps you mentioned for the NASDAQ delisting risk? And I hope you're not leaving it up for luck and putting shareholders under the bus.

Oh my gosh. We don't leave that up for luck.

[indiscernible] question.

Yes. No, no, that's good. So one more thing I meant to say on the Reg A offering is that it was also set where the minimum is $250. So it's really designed, again, for someone who, yes, really is interested in becoming an owner and something they believe in that it's accessible regardless of whether they have $250 they can invest or $250,000 or $2 million. So in terms of the NASDAQ process, and so just taking a step back for a second. So the NASDAQ listing requirements include a few different parameters for companies, and one of them is obviously, stock price, but then another set of requirements is related to either having a certain market cap, a certain stockholders' equity or certain net profit, which is interesting because we're transitioning to commercialization, but net profit has to be in your year-end 1 year's audited financials. And so we really have to look at either market capitalization, which is very much based on stock price by market cap, the stock price times shares outstanding, has to be a certain amount or stockholders' equity. So assets equals liability plus stockholders' equity. And so what one does as they go before a panel is really put forward a plan of how they will reach compliance. And things that can affect stockholders' equity are obviously revenue because in part, that's based on net income is part of that calculation. So obviously, that's important. Equity is important in that. And then also in the case of Daré, we have an interesting situation because we've been so successful with our nondilutive grant funding and the way some of that grant funding comes in. We actually spend the money on the asset side before those dollars come off of the liability side because the liability is tied to the life of the grant sometimes. So it's really going in front of the panel and putting forth our plan and demonstrating how given what the company has going on, given the commercial programs, given the pipeline that we have, given the events, given the strategic opportunities that we have that we are well positioned to maintain compliance.