Daré Bioscience Q1 2023 Earnings Call Transcript

Quartr
Provided by Quartr
May 11, 2023

There are 8 speakers on the call.

Operator

Welcome to the conference call hosted by Dare Bioscience to review the company's financial results for the quarter ended March 31, 2023, and to provide a general business update. This call is being recorded. My name is Mallory, and I will be your operator today. With us today are Sabrina Martucci, Johnson Dare's President and Chief Executive Officer John Fair, Dare's with Chief Commercial Officer and Lisa Walters Hoffert, Dare's Chief Financial Officer. Ms.

Operator

Johnson, please proceed.

Speaker 1

Thank you. Good afternoon, and welcome to the financial results and business update call for the quarter ended March 31, 2023, for Dare Bioscience. Our plan today is review our Q1 results, discuss developments since our recent call in March and highlight some important objectives and milestones anticipated in 2023. Before we begin, I'd with the Securities Litigation Reform Act of 1995. Any statements made during this call that are not statements of historical facts should be considered forward looking statements.

Speaker 1

Actual all filed in their entirety by the cautionary statements in the company's SEC filings, including our Form 10 Q for the quarter ended March 31, 2023, which was filed today. I would also like to point out that the content of this call includes time sensitive information that is current only as of today, March May 11, 2020 Q3. Dare undertakes no obligation to update any forward looking statements to reflect new information or developments after this call, except as required by law. As a reminder, Dare's diversified portfolio, which includes 1 FDA approved product and 12 development stage candidates, 3 of which are in or nearing Phase 3 clinical development, is focused solely and squarely on women's health and is built upon the following core principles: each product candidate must address a meaningful market opportunity in the form of a persistent unmet need Each product candidate must have the potential to be first line or first in category or both because we seek to deliver a clear improvement over the standard of care. And ideally, each product candidate has demonstrated proof of concept and or uses well characterized active with pharmaceutical ingredients, which can mitigate development time, cost and even risk.

Speaker 1

Our current innovation efforts are focused in contraception, vaginal health, reproductive health, menopause, sexual health and fertility. On our recent 2022 financial results and update call, we discussed the key milestones anticipated for the year 2023. Phase 2b RESPOND study top line results for our investigational Sildenafil cream for female sexual arousal disorder the U. S. Launch of Xatiado by Organon the initiation of the Phase 3 clinical study of Ovaprene, our investigational potential 1st in category hormone free monthly intravaginal contraceptive whose U.

Speaker 1

S. Commercial rights are under a license agreement with Bayer, which we expect will be the single pivotal study to support Ovaprene's premarket application IND related activities for DARE HRT1, which is our investigational 28 day intravaginal ring and for the candidate DARE HRT1 and Phase 2 clinical study plans for DARE VVA1. And additionally DARE PDM-one, which is our investigational vaginal hydrogel formulation of diclofenac to with primary dysmenorrhea, menstrual cramps, the Phase 1 study conduct and the top line data this year. On today's call, Lisa will review our Q1 2023 financial results shortly, but we will otherwise focus on our anticipated milestones for this quarter, this Q2 of 2023. So mainly, we'll spend our time today on the Sildenafil Cream 3 6% Phase IIb RESPOND study top line results and the commercial launch of Xociado in the U.

Speaker 1

S. By Organon. We'll start with the SINACEL CREAM update, and we will review both the exploratory Phase 2b response study objective to provide context for the anticipated upcoming top line data readout. And as importantly, we'll talk about the dynamics for female sexual arousal disorder, which will highlight why we're so excited to be conducting this Phase 2b study for this yet unserved indication in the quarter, that's analogous to erectile dysfunction in men. I'll then turn the call over to John, who will provide an update on Organon's XOXIETO launch activities.

Speaker 1

With Sildenafil Cream 3.6 percent, we're looking to address the lack of physical genital arousal response and the associated distress that are the hallmark of female sexual arousal disorder or FSAD. As I mentioned upfront, FSAD is analogous to erectile dysfunction or ED in men, both in terms of with the pathophysiology of the condition as well as the target pharmacology and the addressable markets are also quite comparable in size. As we approach the Phase 2b top line data readout expected this quarter, we wanted to give you a sense of what you can expect. First, by way of refresher, previously conducted studies by Dare and our licensor SST demonstrated this cream formulation of Sildenafil, which is the same active ingredient as in Viagra, increased blood flow to the female genital tissue, both when assessed internal vaginal probe and when assessed via an external temperature sensing camera. These data provide the proof of concept that the formulation is achieving its target activity in the tissue, increasing blood flow.

Speaker 1

Obviously, vaginal probes and general temperature sensors are not with appropriate patient reported outcomes to take forward into the Phase 3 program. So that's what we're expecting in the Phase quarter in terms of potential patients as the ED market. We've also mentioned that our product candidate, Sildenafil Cream 3.6%, is the only development stage program to our knowledge that is specifically designed to address the lack of general arousal symptoms associated with FSAD. As I mentioned, Sildenafil is the active ingredient in Viagra and our innovative topical cream formulation for women is designed to be used on demand prior to sexual activity and to deliver Sildenafil directly to the genital tissue to facilitate vasodilation and increase blood flow directly where needed to improve the physical arousal response to address the lack of those genital arousal sensations commonly associated with FSAD. Sildenafil Cream has the potential to be the 1st FDA approved product to treat FSAD and create an entirely new market of comparable addressable market size as ED.

Speaker 1

To put some of the market dynamics into context, we only need to look back to the launch of Viagra in 1998. According to an article published at that time in CNN Money, there were 2,700,000 prescriptions filled for Viagra in its 1st full quarter on the market. And at that time, that was the most prescriptions ever for any pharmaceutical product in its Q1 on the market. According to the same blazing a new path as we are with our exploratory Phase 2b study, where as I mentioned, we need to evaluate a number of different potential ways to ask women questions about their general sensations and improvements in order to identify and select the appropriate patient reported outcomes to take forward into the Phase 3 program. But that level of uptake that I described in the Viagra launch from both principally in ED, a lack of viable pharmaceutical intervention created a situation where before Viagra, men had a significant condition, which often led to depression, isolation and frustration.

Speaker 1

As is now the case with women with FSAD without a viable intervention for ED like Viagra, men were reluctant to have a conversation or ask their provider for help or information. According to a 2,004 study conducted by the British Medical Journal, the authors noted that men reported that ED affected their personal relationships, often less than feeling embarrassed, and they generally suffered in silence as many men felt unable to talk to their partners or friends about their condition. The authors also noted that once Viagra became available and when it provided symptom relief, men reported feeling happy and elated as well as great improvements in their well-being. These findings mirror the insights that we have uncovered about FSAD. We know that women are similarly reluctant to speak about their condition with their partners and often report feeling dissatisfaction with their sex lives, unhappiness and general frustration due to their sexual and are often affected by a feeling of shame or embarrassment.

Speaker 1

Given the similarities of ED and FSAD in terms of the pathophysiology of the condition as well as the psychological and emotional impact that we've been discussing, we believe there is enormous unmet need and we see the potential for a large amount of pent up demand for a product like Sildenafil Cream. Therefore, we are excited to bring our exploratory Phase 2b study to conclusion. This quarter, we plan as the first step to report the top line data for a number of the assessment tools that we utilized in the study. Subsequent to reporting the top line results, when we have the full data set from the study, we will formalize our with the FDA regarding the patient population to study and the endpoints to evaluate in the Phase 3 program. In addition to the Phase 2b study where the product was used at home, we recently announced the initiation of a supplemental thermography in a clinical study in a clinical setting.

Speaker 1

This Phase 1 thermography study of Sildenafil Cream is expected to enroll around 15 women and to be completed this year. These data are an important part of our comprehensive clinical development and regulatory plan for Sildenafil Cream and they'll add to our existing clinical and non clinical data package to support the ongoing development program. These data are expected to complement the forthcoming a much needed solution to the women estimated to be $10,000,000 in the United States alone who are distressed and seek treatment for low or no sexual arousal and with no FDA approved option to address their condition, our goal is for Sildenafil Cream to be the 1st FDA approved product for women with FSAD as Viagra was for men with ED. Now we're not planning on providing detailed updates on the other development programs today, but I do want to note that we've been enjoying working with our collaborator, with the to commence patient enrollment in mid-twenty 23 and what we expect to be the single pivotal contraceptive clinical study required to support the PMA submission for registration. I also want to mention that we are thrilled with the interest in our DARE PDM-one study that is underway in in Australia.

Speaker 1

And as a reminder, this is our investigational product to treat primary dysmenorrhea or menstrual cramps by delivering the non steroidal anti inflammatory drug for dysmenorrhea treatment was estimated to be valued at $13,000,000,000 in 2022 and that the size of this market is expected to increase to $28,000,000,000 by 2029. So with those updates on the development programs, I will now turn it over to John and to provide a commercial update on the Xociado launch activities.

Speaker 2

Thank you, Sabrina. As a reminder, Xociado clindamycin phosphate vaginal gel is lincosamide antibacterial for single dose vaginal administration indicated for the treatment of bacterial vaginosis in female patients 12 years of age and older in the United States. The Zaciano story is great validation of our portfolio candidate selection and development strategy. Bacterial vaginosis is the most common vaginal condition in women of reproductive age, estimated to affect approximately 20 3,000,000 women in the U. S.

Speaker 2

Alone. However, a large number of women with the condition are underserved by currently available products. We believe that we could deliver a novel option. Understanding that differentiation drives value, we designed a Phase capable of generating the data necessary to support a compelling label. We believe that if we were successful in our clinical development planning, we will be able to create an opportunity for commercialization collaboration that could drive value.

Speaker 2

And in regard to securing Health company Organon is launching Xatiatto and that they will leverage their established Nexplanon sales team to accelerate Xatiatto uptake. With the manufacturing validation activities required to support the commercial launch completed, commercial launch activities are Given that the sales team for Nexplanon will be launching Xatiado, we expect that the Xatiado sales team will we expect that Xatiata will benefit from Organon's track record of commercial success in the branded women's health category. Organon believes there's a roughly 90% overlap of healthcare providers or HCPs who prescribe Nexplanon and have the potential to be prescribers of Xatiatto based on provider treatment patterns. Because of the strong relationships the sales team has with these HCPs in the women's health space, we expect Organon to be well positioned to inform these HCPs about Xatiatto, ultimately providing benefits for their patients. As I mentioned on our last update call, Oregon has what we believe to be a truly integrated go to market plan, targeting all the key stakeholders, HCPs, payers and patients in order to quickly drive interest and awareness in Xatiado.

Speaker 2

With a strong product label and a powerful commercial partner, we are excited about the launch of Xatiatto expected this quarter. And Organon has been working on launch activities. They're taking a holistic approach to the product's introduction, including ongoing work in the areas of non sales course related promotional activities and utilization of key symposia and conference events. Organon had a very prominent presence at a recent payer focused industry conference called AMCP, which stands for the Academy of Managed Care Pharmacy. This annual event is one of the key conferences where payers and manufacturers can interact and share key pharmacoeconomic insights and learnings across a broad range of products and therapeutic areas.

Speaker 2

Organon shared important insights into the pharmacoeconomic and socioeconomic impact of a bacterial vaginosis diagnosis. And I attended this conference personally, and I really believe this information was very well received by many of the key stakeholders attending the conference as well. In addition to their presence at AMCP and their ongoing work with payers, Organon is planning activities in support of the physician community, including their branded exhibit at the Marquee Conference with the American College of Obstetricians and Gynecologists Annual Clinical and Scientific Meeting commonly referred to in our field as the ACOG meeting. The upcoming ACOG meeting, which takes place later this month, provides unique opportunities to interact with key HCPs focused in women's health, which is critical given the role that OBGYN offices play in treating patients with bacterial vaginosis. And finally, I know we touched on this earlier, but it feels worth repeating.

Speaker 2

Organon will leverage its established Nexplanon sales team, which currently focuses on contraception to maximize Xatiatto uptake at launch. And because the vast majority of sufferers of bacteriovaginosis are also women of reproductive age, the Nexplanon sales force is well positioned to leverage their existing relationships with HCPs in women's health. So in summary, we believe that should be well positioned for commercial success given the knowledge and experience Organon's Nexmon sales team, coupled with Organon's payer outreach, provider and patient centered initiatives. We are working towards the first commercial sale before the end of the second quarter. And with that, I will now turn the call over to Lisa to provide a financial update.

Speaker 3

Thank you, John, and thanks, everyone, for joining us today. I would now like to summarize Dare's financial results for the quarter ended March 31, 2023, which I will refer to as the current quarter or Q1. As you know, Dari's business model is to assemble in advance a portfolio of differentiated product candidates that address meaningful unmet needs that we've identified in women's and then to monetize the value of those our portfolio's clinical and regulatory advances over both the near and long term. The investment required to build and advance a portfolio include corporate overhead, portfolio acquisition and maintenance costs, and ongoing research and development or R and D expenses. So during the Q1 of 2023, our general and administrative expenses or G and A were approximately $3,300,000 Our R and D expenses, which vary from period to period based on clinical, preclinical, and primarily reflected the costs of 2 of our later stage programs, including the ongoing Sildenafil Cream 3.6% Phase 2b RESPOND clinical trial and manufacturing and regulatory affairs activities related to Ovaprene.

Speaker 3

Our comprehensive loss for the quarter was approximately $8,000,000 We ended the Q1 with approximately $19,800,000 in cash and cash equivalents and we had approximately 86,300,000 shares of common stock outstanding as of May 10. In terms of $2,500,000 following first commercial sale. Thereafter, we will be eligible to receive potential additional milestone payments of up to $180,000,000 as well as tiered double digit royalties based on Zaciato's net sales. We are continuing to explore a variety of options to fund our operations, advance our candidates, monetize the value of our assets and build shareholder value. As a reminder, these alternatives include, but are not limited to, non dilutive grants, equity sales, license agreement, structured financings, strategic collaborations and alliances.

Speaker 3

As we've noted previously, we will endeavor to be creative, collaborative and opportunistic in seeking the capital needed to meet our objectives and build shareholder value. We also encourage investors to review the more detailed discussion of our financials, our financial condition, liquidity, capital resources and risk factors in our Form 10 Q for the quarter ended March 31, 2023, which we filed this afternoon, as well as our annual report on Form 10 ks for the year ended December 30 1, 2022, which was filed on March 30, 2023. I would now like to turn the call back over to Mallory, the operator.

Operator

Your first question comes from the line of Catherine Nowak with Jones Research.

Speaker 4

Hi, good afternoon. Congrats on the quarter and thank you so much for taking my question. My first question is about sildenafil Cream. Just thinking about the RESPOND study, what kind of endpoints are important for efficacy study that's specifically directed at arousal? And to that point, how are arousal and desire differentiated from the FDA's perspective when you're thinking about a product that's directed specifically at FSAD versus hypoactive desire?

Speaker 1

Great, great questions. Thank you for them. And it's a good reminder of some of the things that maybe we should have also talked about in our prepared comments, because they're great questions to kind of get everyone ready, right, for the data readout. So in terms of the kind of questions that one can ask about general sensations of arousal. They are kind of as the name implies, they're part of their sexual activity and part of that arousal response to activity.

Speaker 1

And you may remember that and we've talked about this on past calls that we utilized both a combination of already validated questionnaires about sexual functioning that of a lot of domains, questions about orgasm, questions about lubrication, question about arousal sensations, questions about cognition even, right, and questions about desire, right, things that you talked about. So we used some the kind of relevant parts of some validated questionnaires like that. And then we also included what we're referring to as our exploratory endpoints and those really came out of interviews with women who have the condition to understand what bothers them, what do they what are they not feeling physically, what are the words they use to describe it and what would they like to see And so those are the type of things that we included in our study. And to your question too about the difference between those kind of questions versus desire disorder, think about what Sildenafil does. Sildenafil increases blood flow, right?

Speaker 1

That is what Sildenafil does and what someone is likely going to feel as a result of that. And that's very different from desire. Desire is its interest, right? It's emotional. It's are you interested in having a sexual activity?

Speaker 1

Do you have in the trial because I think it's important for us to understand our patients, both the subjects in the study, both before we enroll them in the study and to understand all the benefits, right, that a product like Sildenafil could potentially have. But the focus is really on on those general sensations, right, those physical manifestations, as opposed how interested they are or how much they fantasize.

Speaker 4

Right. That's helpful. My understanding FDA does not have separate draft guidances for arousal and benign disorders. They're kind of lumped together. Yes.

Speaker 1

So what they did, it's one guidance document, but it is very, very clear that the conditions are different. So what they've done is they have one guidance document that covers both as discrete conditions, female sexual arousal disorder and hypoactive desire disorder, but they all are all part of one guidance document. And I think part of that came out of the fact that the desire products, there are 2 products now FDA approved for desire disorder. They came before us in terms of approaching the FDA and talking about studies and talking about indications that really led to ultimately the FDA putting out that draft guidance document in 2016 to very clearly try to distinguish the 2 orders. They are different and they certainly don't want for instance a product that only demonstrates improvement in one aspect like desire to get labeling to imply that they improved arousal, because those are 2 very different things.

Speaker 1

And so that's what the guidance Document was really intended to do was to spell out they're both aspects of sexual dysfunction, but they're different. And to give examples for sponsors on what the pathway to approval is. And it gives a lot of leeway. That's why we did all this work to aligned on our exploratory endpoints and aligned with the FDA that the Phase 2b really is the validation study for those exploratory endpoints so that we really have an

Speaker 4

Got it. No, that's helpful. Thanks again and congrats on the quarter.

Speaker 1

Thank you so much. And then maybe one other point on that too that might be helpful to Again, to help frame it for people that are going to be watching for the top line data. The in any clinical trial, your primary outcome measures that you declare as the primary, they have to be if you're using a patient reported outcome, it has to be an already validated questionnaire. So we were not able to use some of the So we were not able to use some of the questions, those very specific questions that women with the condition exploratory endpoint. So the primary endpoint really came out of an already validated questionnaire, a sexual function questionnaire of 28 questions and then we use this particular arousal domain of it, and then an already established and validated questionnaire around distress, and we use one question out of that.

Speaker 1

So that's how we came up with the primary endpoints, using those already validated And then the exploratory endpoints use all of the new questions and new way of asking the questions and new descriptive words that came out of our patient interviews, those are our exploratory endpoints. And that's why our top line data readout will be a little a traditional, right? A traditional top line data readout usually just has the primary endpoint. But these exploratory endpoints are just as interesting. We can't do all of it for the top line data readout because that would just be a little bit much to do quickly, which is why we made the Amit, that we'll end up having to look at the whole fulsome database before we can decide what goes into Phase 3.

Speaker 1

But at least for top line, we'll be able to share a combination about the primary, secondary as well as some of these exploratory endpoints. It's the sign of being first.

Operator

Your next question comes from Kumar Raja with ROTH Capital.

Speaker 5

Thanks for taking my questions and congratulations on the progress. Continuing with the SIL Dental Cream, what is the expectation in terms of when you will have the full data set?

Speaker 1

That's a great question. We are trying to work as quickly as we can, right? So as you know, the way the process Works as you have the database lock and then there's we'll fairly quickly and short order from that have the top line data, which obviously we will announce very quickly upon getting those top line data. But then typically it does take we're not talking days. It's more time, right, before you actually get the full the complete data set and really have an opportunity to go through all of it very carefully and ultimately compile your clinical study report.

Speaker 1

That as Probably well know from other corporate experiences, it can take weeks to months, right, for that to happen. So obviously, we're motivated to work very quickly. It's something we pride ourselves on in terms of being a smaller company and you can work quickly. But there This is a very rich data set. I cannot stress that enough.

Speaker 1

We are asking these women who participated in the study. They were asked a lot of different questions, a lot of different ways, a lot of different times, and we collect a lot of information about with them. And so we don't want to rush this analysis because we are going to blaze the path, right, hopefully for the Phase 3, and what's happen in Phase 3 and not just for us, but who comes potentially after us in a program like this if it's successful as we hope it can be. We want to Sure that what we request from the FDA in the Phase 3 is very our formulation favorable as well, right? So That's a long way of me saying it's going to take some time.

Speaker 1

Know that the time is thoughtful and purposeful and well spent with the shared objective of making sure we take something forward ultimately to the FDA. Obviously, as quickly as we can, we want to move the data as we hope we want to move this forward as fast as we possibly can. But we also know we only get you get that one opportunity to present this to the FDA and what we want to take forward. So we're going to want to make sure we're thoughtful on that.

Speaker 5

Okay. And with regarding to the thermography study, how many sites will you be conducting that study in? And how will that be kind of like viewed in with this complete data before you present it to the FDA?

Speaker 1

Yes. So great question. So it's one site that we're working with. And these studies are very specific in their conduct. So they're only actually in the whole world, less than a handful of sites that can do these sexual health thermography studies because they're very specific in terms of the type of equipment you use, in terms of type of setup you need to have in order to do the study and the context.

Speaker 1

So we worked with one site for the first thermography study that we did and we're working with one of the other sites that has the capacity to do this for this particular study. And what they can be very helpful in is helping you understand time to effect and what that time to effect curve looks like. Obviously, we did one of them purposely before the Phase 2b study, and that's what determined our dosing regimen. And in the Phase 2b, we gave a window of 10 to 20 minutes when the woman would need to dose product in advance of the sexual activity. So having some additional data around that is very helpful and also data in terms of how quickly it separates from placebo is very helpful for us.

Speaker 1

And so we had that great some of that great data going into the Phase 2b, but we think it's very powerful to have a more fulsome data set again on that as we prepare for discussions with the FDA for the ultimate Phase 3 plan. But that's what we're really looking at. We're looking at what is the placebo curve and vehicle curve and active curve, No product, right? What does that all look like? And what is that time, when you're seeing kind of that maximum separation, so that as we plan our go forward program, we're really making sure we're taking a lot of very specific data into consideration.

Speaker 5

Great. And maybe finally in terms of oaprene, Maybe just provide some highlights like is everything going as expected for the mid-twenty three trial start?

Speaker 1

Yes. No, we're super excited. So the NA CHD has been fantastic to work with. They started doing work and being the core sites that we're going to have in the study, which are part of their contraceptive clinical trials network. You may remember back in December of last year, which was super helpful because they also gave great kind of insights on the protocol in terms of operationally And then obviously manufacturing activities as Lisa talked about in terms of things we've been spending on obviously pivotal study supplies, right, all of that, which is important to have for the study.

Speaker 1

So things have been shaping up nicely. As you know, part of the time we have said was also regulatory time. You may remember that the ID approval from the came with some comments and things that wanted to comment on things we might want to consider for the pivotal study to help really make sure it's that one pivotal study for registration. So we've been working on all of that and are feeling really good about where we are now and the sites excitement and enthusiasm for the study, as well as the NIH's enthusiasm for working with us on that. So we're feeling like we're in really good shape and everything's moving forward as planned right now.

Speaker 5

Okay, great. Thanks so much.

Speaker 6

Yes.

Operator

Your next question comes from the line of Ken D'Auber with Brookline Capital.

Speaker 7

Good afternoon. I'm going to ask about Zaciato and The context for the question. I'm very

Speaker 1

excited about Asociado too.

Speaker 7

Yes. So excuse me, your milestones dependent upon the first commercial sale, which is a pretty low bar in the grand scheme of things. And I have it does appear to be getting some formulary coverage. And I think the real heart of my question is given all this talk about launch and the fact that you haven't Say, aren't saying that you've had the 1st sale yet. That tells me that there's a question about with the timing of when Organon is actually detailing it.

Speaker 7

Have they started detailing the product

Speaker 1

or Yes. Great. Yes. It's a great question for us to clarify. So as John mentioned, Right in his comments.

Speaker 1

There's and we've been talking about, right? And as you just noted, right, in terms of formulary and payer and all that, there are conference, as John noted, in the women's health space happening in May. And as John also noted, there were and we've mentioned on past calls, there were manufacturing validation activities that had to happen before you could put product in the channel, All right. So with the manufacturing validation activities required to support that commercial launch now completed, that really allows us into that next phase of the commercial launch activities that, to your point, achieve that low bar of that first commercial sale. And that's why we're guiding that with everything that's happening with obviously ACOG being a very important big branded, right branded exhibit event for this product.

Speaker 1

Obviously, that's happening this month. In May, that's what we're saying, look, the anticipation is Q2.

Speaker 7

Okay, super. And The product is in licensed and I think you have to share the economics with the licensor and or licensee. And so, will that applies to the milestones and the royalties?

Speaker 1

Yes. So taking a step back in terms of just in general, Right, at Dare, because I think it's important thing to understand. Our portfolio is built, right, Just having that kind of going back to the beginning of the call, the three things I talked about that are so important to us in terms of making sure we're bringing ultimately to market very differentiated products that have considerable market opportunities. So you start with the need, you identify that, you design that sort of target product profile and you go look for the product. And what that means financial obligations that we owe to a third party.

Speaker 1

But we built our company knowing that was our strategy and that we would not as a company find ourselves in a place where we have to bear the expense of commercialization, right? You heard Lisa talk about our burn. Our burn is so low despite fact that we have 12 products in active development and it stays low, relatively, right, because we have been able to enter into commercialization partnerships. So knowing that we are going to do that upfront, all of our transactions. All of our in license transactions are designed to support exactly what you talked about that we're going to get money from And we are likely going to owe money, right, to someone else.

Speaker 1

But ultimately, that has to make sense for our shareholders, right? Because ultimately that's who we are working for, right? And so we look at all of that. Our deals are all very different. Every transaction is different depending on the indication, the opportunity, the likely downstream transaction that we're going to have and the nature of the product.

Speaker 1

So in this case, but generally to your point, they do include some milestones in royalties to the other party. In this transaction, we have $180,000,000 as Lisa talked about in terms of milestones that we're eligible to receive from Organon on top of the double digit tiered royalties. In this case, our licensor, the milestones are quite low. And I can let Lisa talk to them specifically because we've disclosed them. So they're no way near that

Speaker 3

Yes. No, and thank you, Sabrina. And exactly what she was describing, each deal is different. But with our license, so this is to obtain the rights the product, our license agreement with MilanoPharm, we will only owe them one commercial milestone and we've disclosed that that's $1,000,000 when the net Sales are over $50,000,000 And then just to bring it and so that's it on commercial milestones and everything else is a low royalty based on net sales.

Speaker 6

Yes.

Speaker 1

And then there is the $500,000 on the first commercial sale, right? Yes.

Speaker 7

Okay. So there's How does that help?

Speaker 1

Yes. Go ahead.

Speaker 7

Yes. The way to think about how the royalty works is in a way You're keeping, for a lack of a better term, a spread between what you're getting from or will get from Morgan versus what you'll pay out?

Speaker 1

Yes, absolutely. There's obviously there's a spread on just the royalty part, and then there's a Brad, as we were just talking about specifically on the milestones, which are 2 different, right? Those are 2 different revenue streams coming into Dare.

Speaker 7

Great. Thank you.

Speaker 1

Absolutely. Thanks.

Operator

Your last question comes from Doug Tissle with H. C. Wainwright.

Speaker 4

Hi, good afternoon. Thanks for

Speaker 6

taking the questions. Just curiosity, with Zacciano. Do you know will this be available at the pharmacy or will this be distributed through a specialty pharmacy?

Speaker 1

Yes. At the pharmacy, and I don't know, John, if you want to give me your comments

Speaker 6

on that.

Speaker 2

Yes. Just like every kind of A broad women's health product is going to be available through the pharmacy. So the retail outlet is where you'll see the product show up.

Speaker 1

Yes. And go ahead, Doug.

Speaker 4

Yes. I was going to ask

Speaker 6

you as a follow-up. Do we have a sense of The tech transfer and the timing for Organon taking on the FIB manufacturing?

Speaker 1

Yes, great question. So as and just for the benefit of showing responsibilities. And we've obviously together have been working on that. These things take time. So, Zacchetto, it's part of what we love about Zacchetto because it's part of in addition to intellectual property, part of what protects The brand, it's a very specific technology in order to make that hydrogel technology.

Speaker 1

It does require Obviously, certain equipment and certain processes and all of that good stuff. So we have obviously started the tech transfer process, but just Mechanistically, there's time in terms of things that are needed, right, equipment that is needed, that is specialized in order to make Xatiado. And then there's also kind of just the regulatory piece Right, the process of switching manufacturers. So both parties are working hard at this, but this is not a Just to set everyone's expectations appropriately a tech transfer for something like this in this manner, right, where it's not just a CDMO where it's truly going to transfer hands from a regulatory perspective as well is a process that takes time. This is not a tomorrow thing.

Speaker 1

This is something that takes time and effort from both parties, and we are working diligently together on it.

Speaker 6

Okay, great. Thank you so much.

Speaker 1

Yes, absolutely.

Operator

There are no further questions at this time.

Speaker 1

Great. Well, thanks, first of all, for the great questions. We really appreciated the opportunity to share our thoughts on and some of the upcoming milestones this quarter and spending some time on that and this year. And thanks everyone for taking the time this afternoon to hear about the recent updates and our ongoing commitment to drive value for all of Dare's stakeholders. We've talked about the shareholders today, but obviously the women and the healthcare providers.

Speaker 1

And with our diverse portfolio, we really seek to bring to market differentiated prescription therapies that prioritize women's and improve ease of use for women where a more compelling form factor can drive adoption, primarily in the areas we've been talking about and some that we haven't touched on today, the contraception, vaginal health, reproductive health, menopause, sexual health and fertility. So we very much look forward to keeping you updated on our progress and the milestones anticipated this year that I outlined earlier, which include the Xatiatto product launch and And so to list all the milestones again for 2023 that we've talked about, we have the Phase 2b RESPOND, top study results for the Sildenafil Cream study for female sexual arousal disorder. So this quarter is what we're targeting on that. Similarly this quarter, the U. S.

Speaker 1

First commercial sale of Xatiatto by Organon. In addition, as we've talked about the initiation of that Phase 3 clinical study of Ovaprene, which is our investigational potential first in category hormone free intravaginal contraceptive whose U. S. Commercial rights surrender license agreement with Bayer. And again, as we've talked about, we expect that to be a single pivotal study to support Ovaprene's premarket application.

Speaker 1

We didn't other than to mention them talk

Speaker 6

about these in detail today, but as we mentioned, the IND

Speaker 1

related activities for today, but as we mentioned, the IND related activities for DARE HRT1, which is our investigational 28 day interregional ring for hormone therapy for the vasomotor symptoms in menopause and DARE VVA1, our investigational hormone free intravaginal administered treatment for vulvarum vaginal atrophy. So Phase 3 and Phase 2 activities respectively for those and clinical study initiation plans for those candidates. And then mention PDM-one, which is our investigational vaginal hydrogel formulation of diclofenac for menstrual Very much looking forward to that Phase 1 study completion, which is underway right now and then the top line data this year. So that's all just for 2023. So thank you again for your time today, and we look forward to keeping you updated.

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Earnings Conference Call
Daré Bioscience Q1 2023
00:00 / 00:00