Daré Bioscience, Inc. (DARE) Earnings Call Transcript & Summary

Good morning, everybody. This is Doug Tsao from -- senior analyst at H.C. Wainwright. Thank you, everybody, for joining us for the BioConnect Conference. We are thrilled to have Sabrina Johnson, the CEO of Daré Biosciences (sic) [ Daré Biosciences ] with us today to talk about the company. So with that, why don't we jump right in because we don't have a ton of time. So Sabrina, you're a company -- or Daré is a company that came to the public markets through a reverse merger. And so I think there is still many investors who aren't familiar with the company's story. So maybe as a starting point, it's always good -- helpful to sort of orient people and provide just an introduction of what Daré is all about and...

Great. Great. Happy to. So thank you, first of all, for the opportunity and for this format. It's a great format. So in terms of Daré, we're a company focused solely and squarely on women's health, and we started the company because we really saw a unique opportunity in the women's health category for the business model that we envisioned for Daré, which is, it's a place where you can build a portfolio of first-in-category products quickly to address indications across a variety of areas in women's health. So different products, different indications. And by doing that, it really creates a business model where we have a lot of optionality as a company. We can take our products forward ourselves. Once we advance them in development to commercialization, we can partner. And the partnership opportunities are intriguing in this category as there was just a deal right before the holidays, Pfizer with Myovant. Because it's a category where a lot of the industry players, the big pharma players and midsize that have commercial franchise in women's health have not been investing in development. So they're looking for those first-in-category product opportunities elsewhere, but by building a portfolio the way we have, we really set ourselves up where we can partner where it makes sense, and we've done one of those partnerships with Bayer on one of our programs, and also look at opportunities where it makes sense to commercialize directly. So it's unique in that regard and the kind of product opportunities that are available are also unique. So it is one where you can also build it through in license and acquisition and take those products forward.

And just as an orientation, I mean, I know that you have multiple, but why don't you just -- before we jump into the physical, why don't you just highlight, just sort of some, quickly, some of the 3 lead assets for the company?

Yes. So maybe I'll start to -- it's kind of along those lines of how we pick the products, and then I can take you through the top 3. So I touched on this concept of first-in-category opportunities, and there is a lot of innovation in women's health that really creates an opportunity for first-in-category. But specifically, how do you get a first-in-category opportunity? Or what does that mean? So first of all, it's a product candidate that is addressing a persistent unmet need. And one of the -- it's an opportunity -- but it's an opportunity because it's unfortunate for women, but one of the opportunities in women's health is that there are a number of persistent unmet needs that have not been sufficiently addressed. But there is an opportunity with drugs often that we already know and understand to address them. So sometimes, it's because there are conditions in women that are analogous to conditions in men. So we'll talk about female sexual arousal disorder, which is a great example of that, where you can take a known active pharmaceutical ingredient and just apply it to women. Sometimes, it's really a matter of delivering the products in a way that's not systemic, that the systemic delivery can limit the benefits or the convenience or the adherence to the drug. And so it's also an opportunity where you can create first-in-category sometimes simply by the mode of administration and leveraging female unique biology through vaginal drug delivery. So we definitely have examples of that. So as we built the portfolio, those were 2 of the important tenants that first-in-category opportunity and delivering drugs in a way that sometimes also creates that opportunity, but parallel or sort of part of that as well is looking for products that have a high probability of regulatory success. So one of the other attributes in women's health is that there is often this opportunity to leverage a 505(b)(2) regulatory pathway, meaning you're using an active that's already been approved in some indication but still have a first-in-category opportunity, again, either because you're addressing an indication that hasn't been addressed yet in women or you're just delivering it in a novel way. So as we built the portfolio, that's really been the focus, and then we really tried to build a portfolio that has a balance of products across different therapeutic areas. That's a great way of mitigating risk, which is definitely one of the themes, how do you create value while still really mitigating risk, and that's what we've done. So the 3 lead assets are a program for bacterial vaginosis, which just had a successful Phase III readout the end of last year and that really positions us to file it -- file the NDA this year; Ovaprene, which is the first once a month, nonhormonal contraceptive, and it's one where we've already partnered with Bayer for commercialization for that product; and then Sildenafil, which is a really interesting program, a cream for arousal disorder that we're going to be taking into a Phase IIb this year. So that, at a high level, is the portfolio strategy in the top 3 assets.

And Sabrina, before we sort of jump into each of the individual assets and sort of going through -- you sort of outlined how you're looking at -- or what types of products you look for, just maybe talk a little bit about your process for sort of sourcing new deals, if you will. Just because it seems that you're sort of have been somewhat creative in that way in terms of identifying new assets.

Yes. We definitely have -- so I outlined that process and maybe what I should state also clearly is that we started first with the indication. So we've picked specific indications where we have determined that there is a persistent unmet need where there is a meaningful commercial opportunity. So whether it's something that we would take forward ourselves or want to partner it, it would kind of meet that hurdle in terms of a commercial opportunity. And then in terms of sourcing the product candidates, it's really been through a combination of in-licensing, acquisitions; we've acquired companies to bring in products, and sometimes as acquisitions come with cash, which is an additional benefit of the acquisition. So a variety of means of bringing in the programs. But -- and sometimes, we're bringing in a product that's a platform technology, like an intravaginal ring technology or like a transaction we did late in 2019 where we bought a company that had an implantable drug releasing device that can be user control to turn off or on, which is great for its contraceptive indication that the Bill & Melinda Gates Foundation have been funding but is also a great just drug delivery platform product for a variety of indications. But it starts first and foremost with picking that therapeutic indication and then looking for a product that can address it. And they've come from small companies, from like I said, a combination of in-licenses, acquisitions, a variety of forms. And all with importantly, transaction structures that give us a lot of flexibility in terms of what we do with that program going forward. So they've all been designed in terms of transaction structures where little to nothing up from the investment really goes into the product development. So shareholders' money is really going to create value where the financial terms on the back end really allow us also to have flexibility, whether we take it forward ourselves or we partner for commercialization, they can support that and give us those choices so that we can pick the path that's really going to lead to the kind of the most accretive outcome for that program.

And one of the assets that you talked about was Ovaprene, and why don't you provide an overview of that particular product and how you see it fitting into the contraceptives market, obviously, in terms of oral contraceptives that have become highly genericized, and even in the ring category that we have seen some introduction of generic competition. So how do you see this product being differentiated and eventually sort of gaining commercial traction?

Yes. Contraception is a really interesting category in women's health, and -- but it's also kind of reflective of what can often be the case in women's health where it is a highly genericized category, but it's a category where we've clearly seen products that are differentiated, truly differentiated, had done quite well. So a great example is when you kind of touched on, which is the first hormonal vaginal ring, which was the first ever once-a-month product for women. NuvaRing, which was an $800 million brand. Bayer launched the first intrauterine system that delivered hormones. So kind of like a copper IUD that delivered hormones, and the copper IUD category had been $150 million or so a year. And Bayer's now hormonal IUD, which offers a lot of different benefits, is an over $1 billion franchise for them. So it's clearly a category that while there are generic products, it rewards innovation commercially. And so when we were looking for products specifically in the contraceptive category, and this is true across our portfolio in contraception, but definitely for Ovaprene, specifically, we're looking for that first-in-category. And when you look at the -- how women make decisions around contraception, convenience is a really important factor for her. She's looking for efficacy, of course, but she wants something that she's actually going to be able to use. And there's also a lot of data indicating that when possible, women are seeking methods that are lower or no hormones, but they don't want to sacrifice that convenience. They ideally don't want to take something every day, and they ideally don't want to have to do something in the moment. They want that convenience. So that's really what Ovaprene represented with the benefit of not necessarily having to compromise on efficacy either. So Ovaprene is a vaginal ring. It's a once a month product. So it's a thing she inserts herself and leaves in place for the month. She doesn't have to think about it, but it works without hormones. It works through a combination of a physical barrier and a locally released spermiostatic agent that interferes with sperm motility. And there is increased, as I mentioned, awareness around the sort of benefit for some women of lower or no hormones and that once a month feature. So as we thought about how to take that product forward, it's in development, it's -- we're getting ready this year. Our intent is to start the pivotal trial, the registration trial for that program. But that's when where we really felt having the right commercial partner behind it would be important and also for us, a great way to build value for that program. So we were very excited to partner with Bayer on that program, as I mentioned. They are the only company that's built an over $1 billion franchise in contraception. They've built a category, a new conceptive category, which similarly is going to be required for Ovaprene because it is first-in-category. So we're really excited about that and partnering with them on this program to bring it forward. And we're excited that given the choices that were out there, there are some other recently approved contraceptives, different types of contraceptives. We're really excited that this is the one that Bayer chose to augment their current contraceptive franchise.

And so you did touch on that you're about to enter a registrational study. Sabrina, why don't you -- it may be helpful to sort of talk a little bit about some of the work that's taken place up to this point sort of that gives us confidence that this will ultimately succeed and some of the timelines in terms of the development and initiation of that study, and how long you expect it to take -- to complete it?

Yes. So taking a step back, with nonhormonal methods, first and foremost, you really want to show that the method can basically block or kill sperm. That's the way the nonhormonal methods work, particularly a vaginal nonhormonal method. So along the lines of our theme of wanting to bring in products that have some proof-of-concept, whenever possible, Ovaprene had that kind of proof-of-concept. It had been through a human study demonstrating that it sufficiently blocks sperm, but we went ahead and repeated that study, so a more, I'd say, robust, rigorous version of that study. We completed that study in -- and reported the findings in 2019 and demonstrated that it -- basically across all the women in the study and all the cycles that were studied in that study, that it sufficiently blocks sperm from getting into the cervix, which was the primary endpoint, which is a surrogate marker for contraceptive effectiveness. And importantly, the level of results that we showed based on other products that had similarly run that kind of study and then had gone on to do an actual pregnancy rate study, it's predictive of a product that should have typical use effectiveness at 6 months between 86% and 91%. So to put that in perspective, hormonal methods, whether it's the pill, the patch or the NuvaRing-type product, have 91% effectiveness in typical use. So really exciting findings. It was on the heel of those findings that we entered into our partnership with Bayer for this program. To our knowledge, it's the largest development stage partnership for development stage contraceptive product. And so the way the partnership works, and this ties very nicely into kind of what's coming up in terms of milestones is, there is a $20 million milestone payment due after the completion of the pivotal study, and then there is $310 million in commercial milestones and double-digit tiered royalties on sales. And so that pivotal study is the one that I'm referring to that we are right now intending to start this year. So in terms of next steps, we need to get through some regulatory activities, which is filing an IDE. Ovaprene is regulated through the device division of the FDA, which means we just have to do one Phase III trial. So get that IDE in, and then the intent right now is to start that study before the end of the year, which would position us nicely to have topline data before the end of '22. So that's the timeline right now for that program.

Okay. Great. And then in your opening remarks, you referenced the fact that you had a successful Phase III readout for BV1, your product for bacterial vaginosis. Maybe provide a quick overview of that product opportunity and what some of the key takeaways from the Phase III data are.

Yes. So bacterial vaginosis is a really interesting category because it affects a lot of women, 21 million women in the United States, but not all of them are actively seeking treatment. The symptoms for many women can be very bothersome, and so those women are actively seeking treatment. And often, it's because they have recurrent disease. And the cure rates for FDA-approved products are 37% to 68%. So what's exciting about our study is that it was a onetime administration. It's a clear vaginal gel. So it's one time, she does it herself. It's a clear vaginal gel. And we showed cure rates between 70% and 76%. So obviously, very promising in the category, and that's why there is a lot of interest and excitement around it. And so right now, the plan is to file the NDA first half of this year. We do have qualified infectious disease product in fast track designation from the FDA, and so that could lead to priority review. So PDUFA action potentially before the end of this year and commercialization, that would position for early '22. And we are actively exploring all the options around the commercialization strategy and strategic approaches to that.

And I guess just -- it's one of the interesting things about bacterial vaginosis is, if you look at epidemiology studies, it suggests there are millions of women who suffer from the condition. If we look at the number of patients who seem to be treated pharmacologically, it would suggest it's a much lower number. And so how do we sort of reconcile that and think about what BV1 might be able to accomplish?

Yes. Yes. So depending on the estimates, it's somewhere between 2 million, 5 million women who access the health care system, about half of them will have recurring disease, meaning they have 3 or more episodes in a year. Women do tend to, once they like a treatment, stick with it, even though they'll have the recurrent disease. And so that's really our target population of those women who are in the health care system today, hopefully becoming effective users of this product and many of them will have recurrent disease. So that's really the target demographic, and it is a challenging condition for gynecologists because these women often will have frequent bouts and so are needing frequent retreatment and want something that they can be compliant with, which is why the one-and-done is very important in this category with a high cure rate.

And then just any thoughts in terms of timing for figuring out your commercial strategy?

Yes. So the first step for us right now is definitely getting through those discussions, and we're looking at a lot of options, but also with the NDA focus first half of the year. So both of those are big priorities for us right now. We'll give more clarity on timing as things progress. What we have said is that we are in discussions around a variety of options. Everything from opportunities where we can take a more direct role in the commercialization strategically to straight out-licensing, and right now, we're in the path of sort of weighing those and looking at what really is going to be the best strategic fit. We have a beautiful portfolio of women's health products and what really is the best fit for us strategically that can also be the most accretive.

Okay. And then you are about to -- as you referenced also, about to initiate a Phase II study for Sildenafil Cream, which is the active ingredient in Viagra. Why don't you just provide a quick overview of that opportunity? And also, maybe if we look at there's been a number of sort of studies looking at Sildenafil, not a cream, admitted -- most of them admitted with the oral formulation, using Viagra. And the clinical results have been somewhat mixed. So what gives you that confidence that the Sildenafil Cream is sort of the right way to go?

That's a great question, and this is a great example of how you dose matters and knowing your patient population matters. So we're looking specifically at arousal disorder and not broad sexual dysfunction and not interest disorder. And that's where Pfizer, when they studied Viagra in women actually, the oral form, it was very successful. And specifically, this very specific population and looking specifically at symptoms that she reported about genital sensations and arousal improving. And so as we've built our program, we are delivering it nonsystemic because the real challenge was that with the side effect profile, not the efficacy in this population. So we deal with that by not delivering it systemically and delivering it locally. And then we spent a lot of time designing the endpoints to very much pick up on where Pfizer did have success with oral Viagra, where it did show efficacy and using those same kind of general arousal sensation specific questions for her. So we're really targeting what the mechanism is of Sildenafil in the clinical program.

Okay. And when can we expect that sort of proof-of-concept study to show up?

Yes. So we are planning on starting and with the intent of having data before the end of the year. So we're full steam. That's a big clinical initiative right now for us.

Okay. And we should expect topline data by year-end?

Yes. Yes. I mean we'll keep, obviously, everyone updated with -- obviously, we're watching the COVID situation closely, but right now, that is our expectation.

Okay. And then you do have -- I think we're running out of time, but maybe touch a little bit on your intravaginal ring technology platform, and what that potentially enables you to accomplish where other products in sort of the hormone space have not -- or they succeeded sort of some of the unmet needs in the hormone treatment space?

Yes. So it's one of them. So we have 2 products that came out of Bob Langer's lab originally. This is one of them. The other one is that implanted device that the Gates Foundation has been funding, but the vaginal ring technology is a really great drug delivery platform for women. So vaginal drug delivery lets you get around systemic side effects. It allows you to create kind of first-in-category opportunities, treating indications that maybe have been otherwise treated but not as efficiently. So this allows for dosing over one ring, providing drug over 2 weeks, 4 weeks, allows delivery of bio identical hormones. So really enhancing kind of that profile. And so can have utility for infertility and preterm birth and hormone replacement, but really delivering the drug where it's needed and getting around some of the systemic side effects. And with that convenience, like once a month or once every 2 weeks versus a shot or a pill or...

And how close to the clinic are those products?

Yes. We have one that's going to have Phase I data this year, first half of the year for hormone replacement that uses both from the vasomotor symptoms of menopause. And then we have an NIH grant for same kind of technology that's for preterm birth with just the progesterone or infertility getting into Phase I. So we're starting those activities to prepare for that, but we'll have data on the platform this year, which will be great proof-of-concept.

Okay. Great. Well, Sabrina, I think we are out of time. This is has been very interesting. And so thank you very much, and we look forward to continuing to talk to you.

Great. Thank you. Thanks for the great questions.