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

Hello, and welcome to the Dare Bioscience Second Quarter 2026 Corporate Update Conference Call and Webcast. [Operator Instructions] Note that this webcast is being recorded at the company's request, and a replay will be made available on the company's website following the end of the event. Joining us today from Dare Bioscience are Sabrina Martucci Johnson, President and Chief Executive Officer; and MarDee Haring-Layton, Chief Accounting Officer. Ms. Haring-Layton, please proceed.

Good afternoon, and welcome. Today, we will review our financial results, provide updates on our commercial products and clinical pipeline and discuss the continued execution of our expanded business strategy. That strategy includes a dual path approach, commercializing proprietary formulations through 503B compounding while pursuing FDA approval and advancing select solutions as branded consumer health products that do not require a prescription. In all cases, our goal is to bring innovative women's health solutions to market as efficiently and quickly as possible. I would like to remind you that today's discussion will include forward-looking statements within the meaning of federal securities laws, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements made during this call that are not actual 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 quarterly report on Form 10-Q for the quarter ended June 30, 2026, which was filed today and our Annual Report on Form 10-K for the year ended December 31, 2025. Please note that the content of this call includes time-sensitive information that is current only as of today, August 13, 2026. Dare undertakes no obligation to update any forward-looking statements to reflect new information or developments after this call, except as required by law. I would also like to point out that when we use the term 503B compounding during this discussion, we are referring to compounding drug products by outsourcing facilities registered under Section 503B of the Federal Food, Drug and Cosmetic Act using bulk drug substances on the FDA's interim Category 1 list. I would now like to turn the call over to Sabrina.

Thank you, MarDee. And good afternoon everyone, and thank you for joining us. For more than 10 years, Dare has been building towards this moment. We built Dare on a simple conviction, women's health is an investment-grade category, not a niche, not a side project, a category worth building, funding and holding accountable for delivering the healthcare options women deserve. Every asset we developed, every trial we ran, every grant we've secured, every collaboration we've negotiated, all of it has been directed towards this one purpose, closing the gap between promising science and real-world solutions for women. And over the past few months, that strategy crossed an important threshold. We did not stop being a science-driven development company. We added something new, commercial execution. And that distinction matters. Dare was built not only to develop differentiated solutions for women's health, but to bring those solutions directly to the women who need them. With our first product that we are commercializing directly now on the market and a second approaching prescription dispensing, that vision is becoming a commercial reality. In June, we launched Flora Sync LF5, the first product in our DARE to RESTORE line. It was Dare's first product to enter the market directly via Dare and a milestone marking a new chapter for our company. At the same time, we continued advancing DARE to PLAY Sildenafil Cream toward prescription dispensing, which we are targeting to begin this quarter. One product is launched and the second product is approaching dispensing and a commercial platform is now live, and that is what makes this quarter different. We're still in the early stages of commercialization, and our priority is disciplined execution. The infrastructure, the relationships and the capabilities we're putting in place today are designed to support efficient, repeatable growth as our commercial portfolio expands. The transition is real. Dare now has products moving from pipeline into the market and a strategy designed so that each launch strengthens that platform for the next. So let me begin with Flora Sync LF5. Flora Sync LF5 is a nonhormonal probiotic vaginal capsule designed to support vaginal microbiome balance, moisture and comfort. Available without a prescription, it's formulated with the form of Lactobacillus fermentum LF5, a proprietary strain backed by more than 30 years of probiotic research. What differentiates Flora Sync LF5 is the science behind it. Flora Sync LF5 was evaluated in a randomized clinical study involving 100 women with results published in a peer-reviewed journal. That level of product-specific clinical research is unusual in a category where consumers frequently encounter products with limited supporting evidence. And we believe this creates a meaningful commercial opportunity. One survey found that approximately 65% of women aged 18 to 65 feel insecure about their vaginal scent. Flora Sync LF5 does not need to reach the entire market to become a meaningful product for Dare. Even modest penetration could generate significant commercial value, particularly when considering the potential for repeat use. Flora Sync LF5 was priced with accessibility and ongoing use in mind. We believe it has potential to become part of a woman's regular vaginal care routine, creating an opportunity to drive initial trial, encourage recurring demand and build lasting consumer relationships. Let me now turn to DARE to PLAY Sildenafil Cream, our proprietary topical Sildenafil Cream designed for women, which addresses a large and deeply underserved area of women's health. An estimated 20 million women in the United States experience symptoms of low or no sexual arousal. Yet there is no currently FDA-approved treatment specifically indicated for female sexual arousal disorder. Women have waited far too long for solutions developed around their physiology, experiences and needs. In clinical studies of our formulation, we observed increased genital blood flow and improvements in arousal sensations. The formulation was well tolerated by both users and their partners in our Phase IIb study and no serious safety concerns were reported. By improving physical arousal sensation, DARE to PLAY Sildenafil Cream is designed to support a more positive and responsive sexual experience. At a price of $99 per tube, which provides for about 10 uses, the estimated addressable population of 20 million women represents a total market opportunity of approximately $2 billion. Even modest market penetration could create meaningful commercial value in an area with limited female-specific treatment options. Initially, we intended to make DARE to PLAY Sildenafil Cream available by prescription as a 503B compounded product, while continuing to pursue the 505(b)(2) regulatory pathway toward potential FDA approval. Now you might ask why the dual path regulatory strategy? And the reason is that while the compounded pathway offers a capital-efficient way to enter the market, FDA approval would represent an opportunity for women to have an FDA-approved option as men do. An FDA-approved product could provide greater confidence among patients and prescribers and support broader commercial adoption, because FDA-approved products can be administered as treatments and considered for coverage by payers. It can also strengthen our competitive position to create a more durable and valuable commercial franchise. And in this way, the compounded product can provide an efficient path to early market entry while pursuing FDA approval is designed to unlock the potential of the product as the potential first FDA-approved product to treat female sexual arousal disorder. Although DARE to PLAY Sildenafil Cream is not yet dispensing, interested customers can already begin the simple process of obtaining a prescription. While it's still early, I'm encouraged by what we're seeing in terms of geography of prescriptions being written, a healthy split between office providers and telehealth and repeat prescriptions from providers. Dispensing is targeted to begin this quarter. Let's now turn to our commercial strategy. It begins with providers. OB/GYNs and women's health specialists are trusted voices and their conviction can drive both product awareness and appropriate patient use. Digital marketing expands that reach by educating women directly and helping us identify the messages and audience that converts most efficiently. Telehealth creates convenient access and national reach. And DARE Health Hub brings education, product access, fulfillment and ongoing engagement into one central destination. Our recently announced collaboration with MyMenopauseRx further expands that ecosystem through an established women's health telehealth platform. Additionally, this collaboration highlights how we plan to engage with other telehealth platforms where women can receive a prescription for DARE to PLAY Sildenafil Cream. And the DARE Health Hub serves as the foundation of our commercial strategy. For patients, the DARE Health Hub creates a central destination where women can learn about our products, understand which solutions may be relevant to their needs and navigate the path to access. It brings together education, product discovery, telehealth connectivity, fulfillment and ongoing engagement in a convenient and cohesive experience. For Dare, the DARE Health Hub creates a direct connection with the women we serve. It gives us greater visibility into the full customer journey from initial awareness and product evaluation through purchase, fulfillment, repeat use and engagement with additional products across our portfolio. The DARE Health Hub also allows us to maintain that relationship beyond a single transaction. As women return for information, additional support or repeat purchases, we have the opportunity to build trust, deepen engagement and introduce other Dare products that may address their needs at different stages of life. As our portfolio grows from vaginal health to sexual health and, over time, menopause, each product can benefit from the same digital infrastructure, provider relationships, and expanding customer base. We believe that shared foundation can make each successive launch more efficient while increasing the long-term value of the platform as a whole. We're also building awareness through trusted voices in women's health. Podcasts, clinician conversations and influencer interviews allow us to engage women in credible relevant settings where they are already seeking information about their health. These channels help translate awareness into action by educating women, introducing them to Dare products and creating clear pathways into the Dare ecosystem. To add, these conversations have also reinforced the need we set out to address. We're hearing firsthand that women are actively seeking solutions developed specifically for them, and they want better information, greater access and incredible options they can trust. That response has been encouraging, and it validates both the products we're bringing forward and the commercial approach that we're building around them. And that brings me to how we'll evaluate performance during the early launch period. We're focused on 3 primary groups of commercial indicators, each designed to give us a clear view of how demand is developing and where we're seeing the strongest opportunities to scale. The first is consumer adoption. Initial interest is important, but the stronger measure is whether that interest converts into a purchase and whether a positive initial experience leads to recurring demand. These indicators will help us understand who our customers are, how they discover our products and what drives them to return. The second is provider adoption. Providers play an important role in establishing credibility and connecting women with appropriate solutions. Initial provider trial is a positive first step, but consistent prescribing, recommending and stocking will be indicators that our products are becoming part of routine clinical practice. And the third is commercial efficiency, which will help us determine which channels are producing the strongest results, where additional investment is warranted and how effectively we are translating commercial spending into sustained customer demand. Taken together, these indicators will provide a comprehensive view of adoption, customer behavior and the efficiency of our commercial model. For 2026, our objective is disciplined execution and commercial validation. We're establishing the performance benchmarks, customer relationships and repeatable processes needed to support stronger and more efficient growth in 2027 and beyond. I'd now like to highlight several of our other programs where we have made important progress recently. Ovaprene, our investigational hormone-free monthly intravaginal contraceptive continues to advance through its pivotal Phase III study. During the quarter, we reported positive interim results and the independent Data Safety Monitoring Board recommended that the study continue without modification. We expect to enroll sufficient subjects in 2026 to achieve at least 2,500 menstrual cycles of exposure in 2027, supporting a top line data announcement in 2027. We expect to complete enrollment with between 450 to 500 participants, for less than 250 completers, which was the original FDA requested target. In August of 2026 this year, the FDA approved our proposed protocol amendment to remove the expectation of 250 completers. While in its approval, FDA continued to strongly recommend a minimum of 250 completers and expressed belief that it may be necessary to adequately characterize the safety of Ovaprene. Based on the interim safety data reviewed by the DSMB, including the absence of new types of adverse events or increased frequency of adverse events with prolonged use and the study's expected achievement of at least 2,500 menstrual cycles of exposure, we believe the amended protocol will generate sufficient safety data to support a premarket approval submission. We plan to continue to engage with the FDA on this point. With no FDA-approved monthly hormone-free intravaginal contraceptive currently available, Ovaprene has the potential to offer women an important new option in a category where meaningful innovation remains limited. We also initiated a Phase II study of DARE-HPV, and that's expected to enroll approximately 100 women with persistent, high-risk HPV infection, with top line results expected in 2027. The Phase II study is supported by a contract funded by ARPA-H. During the quarter, in addition to the funding under the contract through ARPA-H, we also received a funding award notice for a second $1 million tranche from the NIAID, bringing the total funding across the project period that began in December 2024 to $2 million. DARE to RECLAIM estradiol progesterone intravaginal ring represents another important opportunity. Activities to support commercial availability through 503B compounding pathway are underway with dispensing targeted to begin in 2027. Turning to our earlier-stage pipeline, these programs extend across contraception, pelvic pain, preterm birth, and other areas where women continue to face significant unmet needs, and represent multiple opportunities to expand our commercial portfolio and create value over time. Importantly, we're advancing many of these programs through collaborations and nondilutive funding. Our NIH and Gates Foundation funding contracts as well as relationships with organizations, including Theramex, the University of Copenhagen and Australia's Research and Development Incentive program, allowed us to access external expertise and capital while maintaining a disciplined approach to investment. I'd now like to hand the call back over to MarDee for a financial update.

Thank you, Sabrina. We ended the quarter with approximately $12.6 million in cash and cash equivalents as of June 30, 2026, and a working capital deficit of approximately $0.2 million. Our working capital is calculated as current assets less current liabilities, which included a deferred grant funding liability of approximately $15 million. Total revenue for the second quarter was approximately $0.2 million compared with approximately negative $21,000 in the same period last year. As you recall from last year, we had an accounting adjustment related to XACIATO royalties. Revenue for the second quarter of 2026 consisted solely of research and development services and royalty revenue. Because Flora Sync LF5 sales began in July, our second quarter results do not include revenue from that product. Selling, general and administrative expenses were approximately $2.6 million compared with approximately $2.4 million in the second quarter of 2025. The increase primarily reflects a noncash write-down of previously deferred offering costs, along with investments in personnel and commercial readiness activities supporting our expanded business strategy. These increases were partially offset by lower professional services and stock-based compensation expenses. Research and development expense decreased to approximately $0.2 million from approximately $1.4 million in the prior year period. The decrease reflects significant contra-R&D expense associated with nondilutive funding that offset direct program costs as well as lower spending across several programs. This demonstrates the value of our nondilutive funding strategy and our continued focus on disciplined capital allocation. Net loss for the quarter improved to approximately $3 million compared with a loss of approximately $4 million in the prior year period. Looking ahead, we began recording revenue from Flora Sync LF5 sales in July and expect to begin recording revenue from DARE to PLAY Sildenafil Cream in the third quarter. With revenue from DARE to RECLAIM Estradiol Progesterone IVR targeted to begin in 2027. We are building toward a diversified, multiproduct revenue profile across 2026 and 2027. As always, I encourage investors to review our quarterly report on Form 10-Q filed today with the SEC for a more detailed discussion of our financial results, liquidity and capital resources and risk factors. Back to you, Sabrina.

Thank you, MarDee. Dare is entering an important new phase in its evolution with commercial execution underway and multiple opportunities to create value across the portfolio. We now have our first directly commercialized product on the market. And DARE to PLAY Sildenafil Cream is approaching prescription dispensing and a commercial platform designed to support the products that follow. This is the foundation of a scalable multiproduct business focused exclusively on addressing significant unmet needs in women's health. And at the same time, our development pipeline continues to advance. Together with our earlier-stage programs, these assets provide multiple clinical, regulatory and commercial milestones ahead. By combining focused commercial investment and strategic collaborations and meaningful nondilutive funding, we can continue advancing a broad portfolio while directing resources towards the programs and activities with the greatest potential to create value. And what makes this moment different is that the pieces are now coming together. We believe this positions Dare to build commercial momentum, reach more women with differentiated solutions and create meaningful, long-term value for patients and shareholders. I will now turn the call back to the operator for any questions.

[Operator Instructions] And we will take our first question from Douglas Tsao from H.C. Wainwright.

Can you hear me?

Yes.

Congrats on the progress. I guess just maybe as a starting point, I think it'd be helpful to sort of hear your thoughts on sort of the near-term commercial portfolio. So I mean Flora Sync and DARE to PLAY as well as DARE to RECLAIM, because in a lot of ways, when I think about these products, they sort of have very different profiles from an end user and perhaps somewhat have different needs from a sort of promotion standpoint. And I just -- I'm curious how you sort of think about pulling those together. And do you sort of anticipate building a Dare brand? Or do you think that these products should have their own brand that sort of stands on their own.