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

Okay. We are ready to get started, and welcome and thank you for joining the Dare Bioscience Virtual Bus. 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 completes its virtual bus tour series with the East Coast stock. And for the format today to bring Sabrina Martucci Johnson, President and Chief Executive Officer; of Dare Bioscience will take you through the Dare story, and then I will open it up for Q&A and take your questions. So it is now my pleasure to turn it over to Sabrina Martucci Johnson, Sabrina.

Thank you so much, and thank you all of you for tuning in today on the bus tour. Before I start, obviously, the presentation does contain forward-looking statements. So I do encourage you to look at our SEC filings for a full overview of the risks and uncertainties associated with the company. So those of you who know us know, we really think of ourselves as a purpose-driven biotech, where our sole focus is to close the gap between promising science and real-world solutions for women. And what does that mean, right? That means that we're focused exclusively on women's health conditions. And as you'll see as I talk about the portfolio and work very broadly in the space. And as you're looking at us now and some of the things I'm going to highlight in today's presentation is really where we are in this kind of exciting time for the company and pivotal time for the company in terms of a snapshot because 2026 is a time where we're now launching commercial products. So we're going to talk about revenue commencing from product sales for a couple of the products in our portfolio. And then also importantly, we're at a time where we're completing some studies that's going to -- that are going to some clinical milestone events next year as well. So, I really want to highlight what's happening in the development portfolio along those lines as well. And what you'll see across the portfolio, what everything has in common, whether it's commercial or development stage. Is it's based on clinical evidence, and that's the white space we're filling in women's health is bringing women options that are truly backed in science and can close those critical gaps in care. I'm also going to talk a little bit about the grant funding that we have in the portfolio and how that helps us products forward with that non-dilutive funding, which is both obviously a validation of the work we're doing, but importantly, also it helps us from a funding perspective to move things forward. So as I mentioned upfront, we focus on women's health, and we work broadly. So from contraception to menopause, sexual health fertility, vaginal health to infectious disease, we're closing critical gaps in care using science that serves her needs and really across life stages. So we're not a company built around a particular product technology, and we're not a company built around a specific indication. We're looking at where are those gaps in care that we can fill. And so I'm going to focus on a few of the programs in our pipeline. And really, like I said, right in front of and to focus on some programs that have commercial relevance right now. And so we're going to talk about in the Darestore family, Flora Sync LF5 which is our vaginal probiotic that started commercializing in July of this year. I'm going to talk about our prescription product DARE to PLAY Sildenafil Cream that is expected to start commercialization this quarter as well. I'm going to highlight a couple of our development programs, Dare in the human papillomavirus treatment therapeutic space in the Phase II trial there and ivaprene, which is our nonhormonal once-a-month contraceptive because we got Phase III ongoing right now with the top line data we expected next year. And then I'm going to talk about a couple of our other programs that are really relevant either with the clinical program starting up. their PT for preterm birth and fertility or detreclaim, which is our menopause product for hormone therapy where we're looking to start commercializing that next year as well. And before I go deep into the portfolio, a couple of highlights that I think are really important to understand upfront to put the opportunity in perspective. First of all, when we think about women's health conditions and therapeutic options. What's important to understand is many of the things that we're looking to address in women's health. They're not diseases the way you think -- typically think of diseases. And why is that important? It's because -- the things that a woman is going to experience simply by having that anatomy and biology and therefore, nearly every woman is going to be affected by thinking about those issues and looking for therapeutic options over the course of her life. So think menopause thinking about whether or not to have a pregnancy and maintaining a pregnancy, right? And then there's also conditions that are also very hormone reliant, independent like sexual health. So again, most women are going to experience changes and disruptions in that as well. So we're going to talk about those markets and then there are conditions like human papillomavirus infection in women that have been impacted by the fact that it wasn't until 1993 that women were required to be in clinical research. So there are certain conditions in women that are important human papilloma virus is a virus that causes cervical cancer, and we know that. And yet there's no therapeutic option because we're still sort of catching up on those market opportunities. So we like the space because of the size of the market, certainly not niche. It's also been a highly productive category. So even the only 1% to 5% of private health care investment is going in ignitions and therapeutic options for conditions affecting women -- those products, though, are disproportionately represented. So 27% of the brands that generate over $500 million in annual revenue are for women's health cushions. So we like that disproportionality there in terms of how efficient the category is in generating blockbuster products, and that's really because women has motivated health care consumers. And then the third thing that we think is really impactful about working in this space is the amount of grant funding that is available. That's non-dilutive funding that helps to advance the portfolio, so we don't have to rely on equity dollars to do that. And again, this is in part an artifact of the fact that women's health and women's research wasn't required until 1993 to be included in clinical research. There's a lot of foundation money as well as government funding that's available to really help bridge that gap. And we've been quite successful over the last several years in accessing that capital. And as you can see across the portfolio, including for our late-stage programs like Ovaprene and DARE-HPV. So I mentioned right upfront, we're data-driven. And what does that mean? So first of all, I think it's important to understand, we look at all the paths of getting our products to market. So it's not just about prescription options. Sometimes it's a nonprescription product. And it's not always just about FDA approval. Sometimes we think it's really important to get a product on market for women and fill an important gap that exists even as a compounded product. But regardless of the path we take to market what all the products have in common is that clinical backing, that clinical development and that clinical evidence behind them. And that really means that we one can have proprietary technologies because they're science behind them and they've been studied. Two, it also gives us a lot of optionality in terms of how we think about commercializing our products because -- they have the evidence behind them to be credible to health care providers. And so as we talk about our commercial strategy, you'll see that it's important to make sure women have access directly, and we'll talk about the DARE Health Hub, and telehealth and what that means and direct patient engagement, but it also is really an opportunity we can leverage or we can also go straight to the health care provider regardless of our path to market. So let's talk first about those commercial opportunities that are happening right now. So -- for Gela 5 is our vaginal probiotic. It's a nonhormonal probiotic product that's really designed to restore microbiome balance in the vagina. We talked a lot about gut health. I think we're all familiar with probiotics in the gut health sense. While the vaginal environment also has its own microbiome. And similarly, probiotics can be very important in restoring that environment. Unfortunately, for women, the vast majority of the probiotics that are available for women today, even for vaginal health, are gut drive strains that are taken orally. So think about that and think about where you want that probiotic to work. And that's really where we're addressing it. So Flora Sync LF5 is a vaginally delivered probiotic. So the product is going right where you need it. And it's a strain that was developed by isolating it from the vaginal microbiome of women who have never had yeast infection. So that's where the clinical strain came from. It's backed by science. And then importantly, specifically studied in a clinical study to demonstrate that it actually does, right, achieve that vaginal microbiome balance -- it's just a 3-capsule administration. So it's available now through the DARE Health Hub. It comes in a box of 6 capsules. It's really something that we are looking to have women incorporate as part of vaginal wellness routine. So it comes with 6 capsules in the box. That's basically 2 courses. And I get this question a lot in terms of how do women know that they need to do something to restore their vaginal microbiome balance and what I always say is that women now. So 65% of women are in secure with their vaginal scent. Odor can often be 1 of the first signals around option in the vaginal microbiome and so this is something that women are quite aware of and are seeking a clinically evidence-backed solution. So this is available on the DARE Health Hub right now, which we're going to talk about in a second. But also importantly, there are clinician offices that are looking to make this available to their patients that we directly in the office, which is fantastic. -- for them to have access to a clinically validated solution. And then DARE to PLAY Sildenafil Cream is our net product looking to be commercialized. We are expecting that prescriptions will start dispensing this quarter in Q3. What's interesting about this product is it's a first of a kind of route cream for women. So it leverages the same active ingredient that is in Viagra for men and just like men can benefit from having increased blood flow to the genital tissue so too can women that blood flow is really what leads to both pleasurable sensations, but also really important in the natural lubrication response in women. It's mediated by that. And so enhancing that can really help enhance that whole experience. And so this has been formulated specifically and studied and demonstrated that it increases that general blood flow within just 10 to 15 minutes after application and also demonstrated to improve those arousal sensations I'm using clinically validated FDA-reviewed endpoints. We're making this available as a 503B compounded product. And so what that means is it's not yet FDA approved. We are still working on that NDA pathway. But what it does mean is it's subject to the same quality manufacturing standards as pharmaceutical products are manufactured facility that registers with the FDA and is subject to FDA inspection. And we were really thrilled to be able to respond to the clinician demand to have a product that was both clinically studied and is manufactured under those quality standards. There are about 20 million women in the United States alone who are complaining of symptoms of or no physical sexual arousal. And so as you can appreciate, at $99 for the 2, that's about a $2 billion addressable total addressable market. The tube comes with 10 doses. So basically 10 uses. It's used on demand. It does require a prescription, which we're going to talk about, which women can get both through the DARE Health Hub or directly through their health care provider. There are prescriptions that have already been written in the system. So clinicians are excited to have this available for their patients, and women have been excited to go through telehealth and get a prescription. So we are looking forward to have dispensing starting later this quarter. And I talked about those clinicians already writing the prescriptions and clinicians looking to stock like RESTORE Flora Sync their offices, they can make it available that quickly to their patients. That all really comes from years of being one of the only companies working solely and broadly in women's health therapeutics and therefore, leveraging those trusted relationships around the clinical development we've done to now turn those into commercial relationships. So that outstanding relationship that we have with those health care providers means that they can now become supportive of our product and actually peer-to-peer educators around our technology. And so that's really a commercial advantage that we're able to leverage because of the clinical data and behind the products. It's also important, though, that we think about an integrated commercial platform and the ecosystem really designed for growth. So those provider relationships are so critical because that trusted source, that trusted clinical channel that we have to make sure that we are in -- but we also recognize that women are seeking and getting their care in a lot of different ways. So we also want to make sure we have telehealth available to women for our products that's directly through our DARE Health Hub or they really want for any synchronous, right quick questionnaire to get a prescription to something that they need or through a telehealth relationship with a third party that is really expert telehealth in like menopause care or sexual care. And so those kinds of relationships are really a critical part of our education and commercialization around our products. as is digital in general, people get their information primarily if it's not directly with their health care provider, it's online. So we're really excited to have really a digital focus with our program. So think about influencers that are clinicians that have podcasts that have followings on Instagram and how we leverage them. to make sure that women are getting the information they need. And for those health care providers, they can talk about our products and be that trusted source of information about products that have been studied. And then the DARE Health Hub is really that central commercial platform that brings it all together. So it is the place where if you're a health care provider, you're submitting a prescription on the back end. For fulfillment, all the prescription fulfillment happens through the DARE Health Hub all about third-party logistics payment from women for the products that she's seeking, whether it's a prescription or she wants to shop now for forest that doesn't require a prescription. If she doesn't have a prescription yet, she can get through telehealth. And if she's looking for more information, there's ways for her to then learn more about the product and get that educational content. And as you can see from the photo here at the site, there's this wonderful opportunity also for cross-selling, right? You may go there for one product and then have an opportunity to learn about another because they're all really interrelated. And then I want to spend the last few minutes before we open it up for questions, just talking about the development pipeline and specifically some of those important clinical readouts we have coming up -- so OvaPrime is really our first-in-category nonmonolvaginal contraceptive. There's nothing like that in the contraceptive category today in that it's a one-month product that a woman manages and controls all on her own. -- and it works without hormones. We've now had 2 positive interim data safety monitoring board meetings, really taking an interim look at the safety data. Based on all of that, we expect to complete enrollment later this year, and that really puts us in a position for a top line data readout next year in 2027. This is the pivotal Phase III trial for this product. And this has the potential to be the first FDA-approved monthly hormone-free contraceptive. The other active clinical program right now and sorry to go back to Ovaprene I meant to highlight the development of Ovaprene has been primarily grant funded, both and the Gates Foundation, including that pivotal Phase III -- and DARE-HPV is our product for human papillomavirus infection. So almost 6 million women every year will be infected with a high-risk strain of human papillomavirus. And what does that mean? It means that's a stream that can cause difficult cancer. And there's no treatment today, pharmacologic treatment when she is told she has that high-risk infection. She's told to watch and wait until cervical lesions appear or even cervical cancer appears. And then the only intervention is surgery that can lead to preterm birth and infertility -- so this is a pharmacologic intervention, which she has that persistent high-risk strain. It's in a Phase II trial right now, and that Phase II study is completely supported with a grant contract from ARPA H, which is a division of health and human services, and we expect that data readout next year from this one. I want to highlight menopause, our homeotherapy product. I touched on it just briefly upfront in terms of a potential commercial product for next year. We're all talking about menopause. We're all talking about hormone therapy, and that is fantastic. May even be talking about the shortage in the patches, which is only unfortunate for women. And despite all that conversation, there is yet no product available to women today that has been clinically studied and that actually meets the menopause society guidelines for hormone for women with uterus, which is both estradiol and progesterone together ideally in a nonoral form, and that's exactly what our once-a-month vaginal ring is designed to do. So we are looking to make this available next year, similar to what we did with DARE to PLAY Sildenafil Cream, where we start first by making it available as a 503B compounded product, while the NDA pathway program continues. We are looking forward to that for next year. Injections for IVF, very painful and also to maintain pregnancy. really not using equity in this third or, you got Dare place a fill cream. -- targeted to go live this quarter in Denryore4Sink L5 already live and launched. And then I mentioned we got that data reclaim menopause on therapy that's targeted for 2027 on the commercial side. And then couple that with some really important clinical data readouts for next year on Ovaprene, our first-in-category contraceptive and on Dare HPV, our first-in-category potential pharmacologic intervention for HPV infection. So hopefully, what you're getting from our time today is that we've really been building the commercial with also multiple catalysts coming. So -- we got the commercial catalyst this year and coming next year. And then there's clinical development catalysts that are coming up for next year as well and all of that with a very capital-efficient growth strategy both on how we commercialize our products and how we leverage those provider relationships to do that in digital and then also how we leverage the grant funding on our development program. So I will pause there and stop there and open it up for any questions on why Dare and why now?

Excellent. So I will now open up for the Q&A session. So thank you for those who had submitted your questions. And if you'd like to submit a question, please hit the Q&A button at the bottom of your screen and type it in -- so our first question is, can you provide an update on the NASDAQ listing.

Absolutely. So the way the process works with NASDAQ for those of you that have been following us, where we were not hitting a was on stockholders' equity, and so that was the compliance that we were looking to overcome. And the way that process works, we received the notice from NASDAQ. We were able to request a panel hearing, which we did back in July. And then those panel hearings are held about a month after you make that request, I think late August. And then the way the panel hearings work, the company presents its compliance plan, we did complete an offering recently, which does increase that stockholders' equity. And so we present the compliance plan to the panel. It's not just that one event, but also looking over time. And then the panel typically puts out its compliance determination within about 30 days of hearing. So that's the process that we're in right now. And as I hope is obvious, we do everything in our power to maintain that compliance. It's certainly important to us.

Next question, as you have access to significant nondilutive funding is the reason why you did the financing for the NASDAQ stay.

That's a fantastic question, and I know you're not all accountants. But what's really amazing matter non-dilutive funding, as you highlighted, it's amazing. It's not diluted funding, and it so much in our portfolio. But because of the way it's accounted, it actually does not help us with stockholders' equity. -- even though that's like $75 million, right, of capital, right, and money coming into the company over the last several years since 2018, it doesn't actually help us with the stockholders' equity measurement and assessment because it's just how we account for it. If we were able to account for it on a cash basis, it absolutely would. It would be very meaningful, but we're not able to do that in under GAAP. And so that's where things like the equity financing that was recently completed. That's exactly what something like that can do, right, because equity then does go straight to the stockholders' equity calculation.

Our next question is why is are pursuing a Phase III program for darteplay when a compounded formulation will already begin dispensing soon? Yes.

What's really, I think, strategic for us in thinking about both options is they allow us to do some different things. So obviously, pursuing the 503B path means that we can get this product into the hands of women today, right away and have a clinically studied option available for them and for their health care providers to make available to them. And so women shouldn't have to wait, right? Viagra has been on the market for 30 years for Men, we're a little bit on having a clinically studied solution for women. So 503B means that we can get a quality manufactured product in the hands of women right away. But as a 503B compounded product, it is cash pay for women which, by the way, is not a detriment, frankly, because most people do prefer cash pay and when it comes to their sexual health and right, things they might want to be a little more discrete about. But it also means that it's not FDA approved. And our view is that women deserve an FDA-approved option just like men have. And also strategically, that can really also enhance long-term kind of commercial protection. So we really want to look at both options and do that in a thoughtful way.

There's a follow-up question here. Is there a risk of a negative outcome in the Darla Phase III trial could adversely affect sales of the compounded product.