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

Hello, and thank you for joining the Daré Bioscience's Virtual Bus Tour. My name is Justin Romanowski, Managing Director of JTC IR, and I'll be the moderator for today's event. Today, the company will continue its Virtual Bus Tour series with a Southern Stop. And we are joined by Sabrina Martucci Johnson, President and Chief Executive Officer of Daré Bioscience, who will take you through the Daré story. I will then open the event up for Q&A to take your questions. And with that, Sabrina, I'll turn it over to you to go through the story.

Great. Thank you so much, and thank you, everyone, for tuning in. Obviously, the presentation contains forward-looking statements. So do look at our SEC filings for a full overview of our risk factors, including important risk factors to consider. We are focused on advancing health for women. And specifically, we're really focused on closing the gap between promising science and real-world solutions for women. I'm going to take you through a few things in our time today that really highlight some of those investment highlights and our business model. And as you'll see, as I go through the presentation, our portfolio is very much purpose-built. We're focusing on areas where the markets are large and there's clear therapeutic gaps. And as I mentioned upfront, where there's science, that if we pull it forward, can close those therapeutic gaps in care. I'm going to focus today on highlighting a couple of products that are -- either have just commercialized or about to commercialize this year. So I want to give an overview on those, and also on a few of our highlights in terms of our development portfolio because we do have a couple of data readouts coming next year. So I definitely want to give some perspective on those. And what you'll see across the portfolio is that we're really focused on bringing forward clinical evidence-based solutions to women using whatever path is the fastest way to get that product in the hands of women. And so sometimes it's as an FDA-approved product like our already FDA-approved product, XACIATO. Sometimes it's by leveraging 503B compounding and sometimes it's even as a nonprescription product. And you'll see that as we go through the portfolio. And then I'm also going to highlight some of the grant funding that we have received. That nondilutive capital is incredibly helpful as we advance that development portfolio towards commercialization. As I mentioned upfront, we really focus on closing those therapeutic gaps in care, and we really do that across every stage of life for women. So from contraception through to menopause and everything in between because our focus is, again, where are those therapeutic gaps that science-driven solutions can solve. I mentioned upfront that I'm going to focus on a few of our programs in our pipeline, and this is to give you a sense, certainly a sense of the breadth of the areas that we cover, but also importantly, the programs that I want to highlight today. So in the DARE to RESTORE family, we have Flora Sync LF5. It's a vaginal probiotic. It just launched this summer. So I'm going to give some perspective on that. And then we have -- planning to dispense late summer in this third quarter is our DARE to PLAY Sildenafil Cream, a first of its kind arousal cream for women. So I'm definitely going to provide some perspective on both of those products. I also want to highlight 2 of the products, in particular, that are in development stage. Ovaprene, which is a first-in-category contraceptive product. It's a once-a-month nonhormonal contraceptive. It's in its pivotal Phase III trial right now with the data readout anticipated for next year. So I want to give an overview on that. And DARE-HPV, which is our product to treat the virus that causes cervical cancer, and that's in a Phase II trial right now that's also reading out next year. And both Ovaprene and DARE-HPV are supported with grant funding. So I'm definitely going to highlight those programs as we go through the portfolio. But before I give any -- go any further, I think it's always helpful to level set on why women's health and why now. And as you'll see, as I talk through some of these points, the market opportunities are significant. There are numerous things that women experience that are diseases in the normal sense of diseases, but they affect a large number of people -- of women, and they are areas where there's big therapeutic gaps that exist today in terms of solving what those women experience as they go through that. So whether we're talking about contraception or menopause or sexual health, those are great examples of those areas where the markets are very significant in terms of number of people. And there are a lot of gaps in terms of options that are available today that are evidence-backed and clinically studied. And then there are areas like human papillomavirus infection, which causes cervical cancer where 6 million women every single year acquire that high-risk infection and yet there are no therapeutic options whatsoever. So those are the kind of areas that we really focus on as we think about opportunities in the women's health space. In addition to the fact that the markets themselves are large, the other thing that we think is really interesting and a value-creating opportunity in this space is the fact that investment in women's health has been highly efficient. So only 1% to 5% of private health care investment dollars go into conditions affecting women, yet 27% of the brands that generate over $500 million in annual revenue are in women's health. Women are very motivated health care consumers. They make 80% of their household health care decisions, and they are definitely focused on their health and well-being. And then third, the nondilutive funding that is available in the category really creates an opportunity where that funding from leading institutions can help advance the development portfolio in a very capital-efficient manner in terms of minimizing the amount or lessening the amount of equity investment required. So whether it's from the Gates Foundation or government agencies from ARPA-H to NIH, we really work to leverage the funding that's available. And as you can see, it's across the portfolio. And to date, we've brought in over $75 million in nondilutive funding, and those awards are continuing. We have funding coming in from those awards this year and next as well. I mentioned right upfront that we really seek to commercialize the products using whatever the most efficient path forward is to market. But regardless of the path we take, what is true across the portfolio is that these are products built on science, clinical evidence, for women, and that's really the white space that we're filling. There's a lot of conversation right now about women's health, but the medicine has not been keeping up with the conversation in terms of clinically backed evidence-based solution, and that's the void that we're filling by taking products through clinical development, ensuring they're proprietary products, clearly differentiated and then commercializing them in a way that is efficient path to market and efficient path to access for women. So I'm going to talk first about the commercial products, and then I'm going to talk a little bit about the products that are in development stage and that have some exciting events coming up in the next year. So first, I'm going to start with Flora Sync LF5. This is a vaginal probiotic. So we talk a lot about our gut health, and I'm sure we've all heard about probiotics that people take for gut health because that's an important microbiome that we're trying to maintain in our gut. Well, the vaginal environment has its own microbiome. It's distinct from the gut microbiome, obviously. But it's similarly just as important. When that microbiome is disrupted in women, it can put women at a higher risk of infection and also things like preterm birth and infertility. So it's really important to maintain that really healthy vaginal microbiome. Unfortunately, for women, most of the products that are promoted to women to support the vaginal microbiome are actually oral probiotics that were developed for the gut. The vaginal microbiome is a very different environment and also just, think about it, kind of hard to get there if you're taking something orally. And so Flora Sync LF5 is really distinct in that it was created from a strain that was isolated from women, their vaginal microbiome, who have never had a yeast infection, and it's delivered to the vaginal microbiome and it's been clinically studied. And in fact, it's been studied for over 30 years. And in a clinical study in women, it was demonstrated that 96% of the women achieved a microbiome balance, that healthy microbiome balance, within just 3 capsules, 3 days in a row -- 1 capsule 3 days in a row and 90% of women maintained that out to 2 weeks. So we're super excited to have brought this to market commercially. It's available on our DARE Health Hub, which I'm going to talk about in a minute. In terms of the current channel, it's $49 for the box. The box comes with 2 of those 3-day courses. It's really something that we envision women can incorporate into their vaginal wellness routine. So any time they're really noticing that they need to restore that microbiome balance and support that lasting comfort, this is a product for them. We're targeting also to commercialize this year in the third quarter, our DARE to PLAY Sildenafil Cream. So sildenafil is the same active as in Viagra. And just like men need a product like Viagra sometimes to increase blood flow to the general tissue, women also need blood flow to the genital tissue. That blood flow in women is what leads to pleasurable sensations that women may have. And also, it's part of that lubrication mechanism so that we can support that. And so DARE to PLAY Sildenafil Cream has that same active ingredient as in Viagra, which is sildenafil, but it's formulated specifically for women. So it's a topical cream that women can use on demand, applied in a similar way as she might apply a lubricant. It's been demonstrated to increase that genital blood flow within just 10 to 15 minutes of application. And also in a clinical study using clinically validated and FDA-reviewed endpoints, it's demonstrated a clinically meaningful improvement in that physical arousal response and also improvement in desire and orgasm as well. We're really thrilled that we have discovered a way basically to ensure we can get this product into the hands of women and health care providers that have been looking for a clinically studied solution to enhance these arousal sensations in women. And so specifically, while we are pursuing and working towards ultimately an NDA pathway for this product, we have been able to collaborate with a 503B outsourcing facility, which is a kind of compounding where they can make a product like this available, but where they are required to register with the FDA and follow the FDA manufacturing guidelines for pharmaceutical products and that way, they can make the product available on large scale. So looking to start dispensing this product, as I mentioned, later in the third quarter. We have, however, started receiving prescriptions. So clinicians are excited to see this being available. So they've started to write prescriptions for their patients and patients are engaging also with the telehealth that we have available. So I'm going to talk about that in a second. I want to talk about, though, how we can really leverage these clinical relationships into commercial momentum. So to our knowledge, we are one of the only companies, if not the only company, working solely and broadly to develop therapeutic solutions for women's health conditions. And we've been doing that for over 10 years. And so what that means is we've established relationships with health care providers. And those relationships with health care providers, we can turn that into peer-to-peer communication about products like these that they're seeking and they're interested in and they want to tell their peers about. So those clinical relationships built through the product development, they become a real commercial advantage for us and that we're able to provide that awareness before launch, collaborate with them on those channels and really expand that engagement with them across our portfolio. But importantly, those provider relationships are one part of what really needs to be that integrated ecosystem that we need to leverage to ensure women have access to a product like this. So we leverage those provider relationships. Telehealth is also very important. Some women don't have access to what I'll refer to as a brick-and-mortar health care provider. They really need to leverage telehealth and maybe even to get to a specialist in sexual health or vaginal health. And so we do look to collaborate with telehealth providers because that's a fantastic channel for women to have access and for those providers to know about our products. We really leverage digital marketing. It's a great way for us to focus on getting the products in the hands of the customers and the health care providers where there's a really good connection for these products. So we do that through podcasts and on Instagram and TikTok and collaborating with influencers that are clinical influencers, right? They're very knowledgeable about clinical needs and the products and can communicate about them to their followers. And then we want to make sure it's seamless for whether it's a health care provider or a woman to get access to these products and make them available. And so we do that all through the DARE Health Hub. It's our central commercial platform. So all of our products that are commercially available will show up there. Right now, it's Flora Sync LF5 and DARE to PLAY is on there now, too, because people can start getting prescriptions. While we collaborate with third-party telehealth providers, we also have a telehealth access right on our DARE Health Hub. So that is an asynchronous telehealth visit. It's a 10-minute questionnaire. So it's a great way for someone who knows they want access to DARE to PLAY, Sildenafil Cream, which requires a prescription to get access to that very quickly. And then through that DARE Health Hub, that's where they do their payments. They receive updates on their products, on the shipping status and where they are. They can reorder, refulfill, all of that happens on the DARE Health Hub. And on the back end, that's also where health care providers, through the back-end pharmacy, Medvantx, that supports it, that's where providers can submit prescriptions as well. So it's fully integrated for access. And now I want to spend a few minutes on the development portfolio and definitely on a couple of those clinical highlights that I mentioned. So I want to start first with Ovaprene. So this is a first-in-category contraceptive candidate. It's a once-a-month product. It's something a woman inserts vaginally herself and removes herself once a month. It's designed to have both a physical barrier and release a product that is a spermiostatic agent and is completely nonhormonal. It's in a Phase III trial right now, and this is the pivotal registration study. So this is the study that would ultimately be utilized to support a submission of the FDA. The study has already had 2 Data and Safety Monitoring Board meetings. That's independent experts that review the data specifically from a safety perspective. One of the things they do look at is pregnancy rates because it is a contraceptive trial. So they want to have an understanding of how many women are experiencing that event. And based on the DSMB meetings to date, like I said, there have been 2 of them so far, the most recent was just in May, the product continues to look like it's performing at around a 91% typical use effectiveness rate, basically, it has a 9% pregnancy rate, which is exactly where the product was expected to be. So that's great in terms of its performance. And just to give some perspective, the most similar product in the hormonal category is a product called NuvaRing. It's now generic, but when it was not generic, revenues peaked at almost $1 billion in peak annual revenues. And this would be the only once-a-month product in the non-hormonal category. We do expect to complete enrollment this year, and that would put us in a nice position for a top line data readout next year. The other product that's in active clinical trial right now is our DARE-HPV product. So this is a product to treat high-risk HPV infection. So human papillomavirus is the virus that causes cervical cancer. Despite the fact that we know what virus causes cervical cancer, there's no FDA-approved pharmacologic option for treating that virus today. Instead, there are 6 million women every year who acquire one of these high-risk infections. And basically, the treatment paradigm is to wait until she has precancerous or cancerous lesion on her cervix and then those have to be surgically removed. And that surgery can lead to preterm birth risk, infertility risk, so certain complications certainly for someone who's still in her childbearing years. And so we are really striving to advance something that has the potential to be a therapeutic treatment that someone can do when she has that persistent high-risk HPV infection. We just started our Phase II trial for this in May of this year. The study is funded completely by ARPA-H, which is a government agency, through a $10 million award that we have received. We expect, based on the enrollment rate, that we should complete enrollment next year and have a top line data readout next year as well on this product. A couple of the other development programs I just want to touch on quickly. One is DARE to RECLAIM, our hormone therapy vaginal ring. So menopause is definitely having a moment because the FDA fairly recently now has removed the black box warning about hormone therapy. And so it's really allowed women to think more broadly about whether hormone therapy can be right for them, which is fantastic. However, even though we have that important milestone, there is still no clinically studied product available for women that actually delivers both estradiol and progesterone together, which is what women with a uterus need in a nonoral form, which is exactly what The Menopause Society recommends. And so that's really the gap that DARE to RECLAIM or DARE-HRT1, we call it, is meant to fill. It's a once-a-month vaginal ring that a woman inserts and removes herself once a month, designed to deliver those hormones that women with a uterus need for menopause hormone therapy. And the data to date on the product has been very exciting in terms of not only returning women to the level of hormones that they had premenopause, but importantly, also demonstrating improvement in both the vasomotor symptoms, so hot flashes, night sweats, things like that, but also the vaginal symptoms that they're experiencing. So similar to what we're doing with DARE to PLAY Sildenafil Cream, the idea with the DARE to RECLAIM product is to strive to make it available as a 503B compounded product. Our target is next year for that, late next year, while in parallel, we continue to work through the NDA pathway. I want to also highlight a product that's nonhormonal for women where hormones may not be a good option, particularly like breast cancer survivors, where even vaginal hormones are sometimes not something they can contemplate, but vaginal and sexual pain is a really common symptom of their breast cancer therapeutics if they're hormone receptor-positive. So FDA has cleared this product to go into Phase II, and we're working on preparing for that at this time. And then lastly, I want to highlight our vaginal ring that delivers progesterone. So progesterone is commonly used in injection form, very painful injections to support IVF. It's often also used as part of a potential therapeutic regimen for women who are at risk of preterm birth. This takes those injections and turns them into a ring, so something that she can insert vaginally and is nondaily as an alternative to those. So we have a grant to support this in Phase I from the NIH, and we're preparing for that right now. And we have a number of earlier-stage programs that I won't talk about today, but similar to everything I've discussed, they're also similarly first-in-category product opportunities and funded primarily with nondilutive funding from the NIH and Gates Foundation. And then I want to end with a couple of highlights from a corporate perspective. Cash on hand in the last SEC filing was about $18.5 million. Management team, highly experienced, not only in women's health, but therapeutics more broadly in both commercialization and development, which is really important for a company at our stage. I mentioned all of these throughout our talk today, but I want to end with a couple of highlights in terms of those near-term catalysts. So in orange, you can see our catalysts related to commercialization activities with DARE to PLAY and DARE to RESTORE Flora Sync LF5 this third quarter. And then we got DARE to RECLAIM, which is our menopause product targeted for 2027. And then as I mentioned, we have 2 important clinical events coming up in terms of data readouts next year for both Ovaprene, our contraceptive candidate that's nonhormonal, and DARE-HPV for human papillomavirus infection. So hopefully, that gave you a great perspective on why Daré and why now. It's definitely a fantastic time to get to know us in terms of really what 10-year evolving has got us to, which is being in a place where we have 2 products commercializing this year, we're in a position for 2 data readouts next year and a third product targeted to commercialize next year. That's on top of the product that we had FDA-approved a few years ago and is already partnered with Organon. So really in an interesting place right now from a commercialization perspective with the pipeline in general. And then hopefully, you also have a sense that with that development pipeline, particularly with that grant funding that we have there, that nondilutive funding, it really creates a scalable commercial engine of both the commercial infrastructure we have, but also the pipeline to feed it and how we're leveraging that nondilutive funding to achieve that. So I will stop there and open it up for any questions.

Thank you, Sabrina. Great presentation. [Operator Instructions] Our first question. For DARE to PLAY, what needs to happen before prescriptions can begin dispensing? And what should investors watch for, for the remainder of 2026?

Yes. Great question. So in terms of before prescriptions can begin dispensing, so as I mentioned upfront, we're working with the 503B outsourcing facility. So what that means is it's a kind of compounding where that facility is actually allowed to make a product like this at large scale, which obviously we want, to meet the demand. And they have to do a few things to be able to do that, both with the FDA and then also at every individual state level. And so specifically from an FDA perspective, they have to be registered with the FDA. They're subject to FDA inspection, and they have to follow good manufacturing practices. Those are the standards that pharmaceutical products are held to that are not like a pharmacy-compounded product. So that's the standard for pharmaceutical products. And so that does mean that there are certain activities that have to be completed to follow GMP. And then at the state level, every state into which that 503B outsourcing facility wants to dispense product into, they actually have to register with the board of pharmacies in each of those individual states. And every single state is different. So in terms of being ready to start dispensing, there are a couple of things that are really important. One, they have to complete all the activities required for GMP manufacturing and manufacturing the product at scale. And then the other thing is we really wanted to see them have a nice critical mass in terms of states in which they're able to start dispensing. We have interest in this product from women across the country and health care providers across the country. So we really wanted to be in a strong place of having them registered and licensed in as many states as possible when prescriptions started going out, so as many women as possible could start accessing them and also for logistics. So right now, they're in 29 states. So we're getting there in terms of being at that critical point. So that's what we're looking for all of those activities to line up. And the target for that is this third quarter. And then in terms of what investors should look for, I can tell you what we're looking for from both DARE to PLAY as it starts to commercialize and also Flora Sync. So I'll start with DARE to PLAY first, and then I'll talk a little bit about Flora Sync as well. So from DARE to PLAY, we really want to see those kind of behaviors that form the foundation for a very successful brand. And what those behaviors are is you want to see providers writing routinely, right? You want to see them writing for multiple patients in their practice. So you want not just breadth, but you want to see that nice depth of providers that are really incorporating this into their practice for their patients. So we'll be looking for those kind of metrics, right, numbers of providers that are writing prescriptions, but also how many repeat prescriptions for different patients, right, are they writing? And then at the patient level, we want to see how frequently are they filling their orders, right? How frequently do they get a refill so we can start to get a sense because the tube -- did I mention [indiscernible]? The tube is $99, and it comes with 10 doses, 10 uses. So we want to really get a good sense of that frequency also from the women. And for Flora Sync, what we're going to be looking for? Same thing. We're looking for -- even at the provider level, like, we're looking for providers to actually stock the product in their offices and recommend it to their patients because there really is a dearth of sort of clinically studied vaginal probiotics. So we really want to see that. We'll be looking for that. And at the consumer level, we're looking for where is she coming from, how did she learn about the product? And then what is her repeat ordering habits. And that's what's really going to help us in the early days of launch, understand what that foundation is and to build on it.

That's great. And you answered 2 other questions around what KPI you're going to be looking for those product launches. So that's great. And then just to build on that, thanks for hosting these calls for transparent discussion with investors. What are some initiatives you'll be doing to generate buzz and interest around the company and product?

Yes. So hopefully, you're starting to see some of this because some of the podcasts are starting to go live. We've really been leaning into both a podcast strategy that includes influencers and also influencers just on their Instagram and TikTok and other channels. So some of those podcasts are literally starting to go live now. And so check out our Instagram. We're always posting about them. So definitely check out our Instagram. If you're not following us, do, because that's often where we really highlight the podcast and provide the link to those podcasts. So there are a number of podcasts that are starting to come out this summer, and they're really a mix. Some are with very well-known kind of sexual health influencers. One of those just dropped on, I think, July 29. And then some of them are with organizations that have a real interest in what we're doing and have followers that have a real interest in what we're doing like the Menopause Foundation. We also do podcasts with health care providers, clinicians that -- we think of them as pro influencers, people that have -- they're professional health care providers, and they have a really strong following from people that look to them for health care information and to learn about products, whether they're health care providers who follow them or women who follow them. And so we record a number of those podcasts as well. So most of them -- some of them just started coming out in July. So most of that is coming out in July and August. We've also done some stuff with iHeartMedia. And so there's a lot of different platforms that we're looking at to get the word out. But in all of those cases, what we're really trying to do is make sure that we're collaborating with credible spokespeople and influencers that have reach to talk about the products. But first and foremost, that they have a clear understanding of what the clinical benefit that we're delivering is with these products and that they can communicate it. So those are some of the channels that we're using. And to me, I think those are some of the most interesting channels that we've been able to leverage and then also a lot of peer-to-peer. So we've done some webinars in the past. You'll start seeing more of those where health care providers that have already really incorporated these products into their practices are going to be talking primarily to their peers about what the products are and why and how they use them. So you'll begin to see more of that as well.

That's great. And I have to agree on the podcast, the one from last week; I watched. It was very interesting and a very good discussion. So definitely recommend everyone to check that one out. Our next question. There are currently no FDA-approved treatments specifically for female sexual arousal disorder. How large do you believe the market is? And how will Daré educate women and doctors about this condition?

Yes. And it really -- the market is significant. When we look at the sort of prevalence rates, the true prevalence rates of female sexual arousal disorder, they're not dissimilar from erectile dysfunction. So very comparable in terms of number of people affected, right? We're talking tens of millions of women and depending on which way you look at the estimates, 20 million, 40 million women, depending on how you look at the data and how you look at those estimates. So it's a significant population. And it's a very motivated population. When we launched our clinical trial, when we launched our Phase II trial, and we posted some ads about it on -- I think at that time, it was just Facebook. But we posted some ads about it on Facebook, maybe Instagram as well, but definitely Facebook, we had over 10,000 women respond to those ads within the first 16 weeks of putting those ads up about do you have this problem? Are you seeking a solution? And we were only looking for 200 women to participate in the study. So there's a need. Women are looking for something that is actually evidence-based. There are a lot of products pushed to women purporting, right, to solve their arousal problems, but they haven't been studied. And women are sophisticated consumers, and I think they can see through that. So we're excited to get this out there.

Absolutely. Our next question. Can you explain how the DARE Health Hub telehealth capabilities and provider relationships work together to acquire and retain patients?