Welcome to the conference call hosted by Dare Bioscience to review the company's financial results for the quarter ended September 30, 2022 and to provide a general business update. This call is being recorded. My name is Paula 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 Chief Strategy Officer; and Lisa Walters-Hoffert, Dare's Chief Financial Officer. Ms. Johnson, please proceed.

Thank you. Good afternoon, and welcome to our Third Quarter 2022 Financial Results and Business Update Call for Dare Bioscience. Our plan today is to review our third quarter results, discuss development since our last call in August and use the time to review our business strategy including why we believe investment in women's health is efficient and disproportionately impactful and to highlight some important objectives and milestones anticipated through the end of the year and in 2023. Before we begin, I'd 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 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 annual report on Form 10-K for the year ended December 31, 2021, which was filed on March 31, 2022, and our quarterly report on Form 10-Q for the quarter ended June 30, 2022, 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, November 10, 2022. 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 you know, Dare is solely and squarely focused in women's health. It is our belief that prioritizing women's health is not only good for the many women…

It's the three vaginal health product candidates or potential candidates in our portfolio, specifically DARE-HRT1, the first hormone therapy, estradiol plus progesterone monthly intravaginal ring, DARE-VVA1 the first hormone-free vaginal atrophy therapy for women with hormone receptor positive breast cancer, and Glycerol Monolaurate, naturally occurring fatty acid monoester that has shown broad antimicrobial activity, and that may be developed to potentially treat and/or prevent vaginal infections of various sources.

It's the three vaginal health product candidates or potential candidates in our portfolio, specifically DARE-HRT1, the first hormone therapy, estradiol plus progesterone monthly intravaginal ring, DARE-VVA1 the first hormone-free vaginal atrophy therapy for women with hormone receptor positive breast cancer, and Glycerol Monolaurate, naturally occurring fatty acid monoester that has shown broad antimicrobial activity, and that may be developed to potentially treat and/or prevent vaginal infections of various sources.

clindamycin phosphate: Our commercialization collaborator is Organon and we are thrilled that commercial launch preparation activities have begun and are ongoing. The Organon market access team is meeting with customers now to review XACIATO and obtain competitive coverage in the bacterial vaginosis marketplace. Organon will leverage its established Nexplanon sales team to accelerate XACIATO uptake at launch. Organon believes there is roughly a 90% overlap of those healthcare providers who prescribe Nexplanon and who diagnose and treat bacterial vaginosis. The strong relationships the sales team has with these providers are expected to enable immediate access as early as day one. And the first commercial sale is anticipated in the first half of 2023 in the U.S. Ovaprene, our hormone-free monthly birth control candidate, Ovaprene is an investigational potential first-in-category hormone-free monthly intravaginal contraceptive. Our commercialization collaborator is Bayer and our pivotal study collaborator is the NIH. We announced IDE approval by the FDA in October for our planned pivotal study, and we are currently reviewing and implementing additional FDA design recommendations in order for this study to serve as the primary clinical support for a future pre-market approval submission to the FDA. In other words, if successful, we expect this study to be the single pivotal study necessary to support a PMA submission to the FDA. The NIH is holding an investigator meeting with the Ovaprene investigators in December of this year, 2022, and we anticipate initiating recruitment mid-2023. We will target about 200 subjects completing 12 months or 13 cycles of use. Sildenafil Cream, our female sexual arousal disorder product candidate, Sildenafil Cream is an investigational, potential first-in-category treatment for female sexual arousal disorder, FSAD, which has no FDA approved therapies. It's a novel cream formulation of Sildenafil, the same active ingredient is in Viagra. Subject screening for the…

Thank you, Sabrina. Given the stage of our current portfolio and the market dynamics in the therapeutic categories, specific to XACIATO and Ovaprene, we believe the best way to generate value for Dare and shareholders is via external commercialization collaborations or out license agreements, rather than attempting to commercialize these assets on our own. Opportunities to enter into such collaborations are ultimately contingent upon developing differentiated products that demonstrate the potential to be first line or first-in-category. So let me begin first with the bacterial vaginosis and our first FDA approved product, XACIATO. Organon, our global collaborator for XACIATO, shares our commitment to advance critically needed innovations in women's health. And we believe that Organon unique focus on women's health coupled with their strong commercial capabilities will ensure that XACIATO reaches women most impacted by this condition. We believe that Organon is uniquely positioned to bring XACIATO to market and will drive patient and provider awareness ultimately leading to the use of XACIATO based on XACIATO's unique and differentiated profile. As Sabrina mentioned, Organon will leverage the established Nexplanon sales team to accelerate XACIATO's uptake at launch. Organon believes this is roughly a 90% overlap of those healthcare providers who currently prescribe Nexplanon and are also diagnosing and treating bacterial vaginosis. These strong relationships that Nexplanon sales team has developed, will help us and the providers and expect that we will be able to get access to these providers as early as day one of the launch. Under our license agreement with Organon that allows them to commercialize XACIATO, we received a $10 million cash payment from Oregon after the license became effective in June, and we're also eligible to receive potential milestone payments of up to $182.5 million, as well as tiered double digit royalties based on net sales.…

Thank you, John and thanks everyone for joining us today. I would now like to summarize Dare's financial results for the quarter ended September 30, 2022, which I will refer to as the current quarter or the third quarter of 2022. Dare's business model is comprised of two parts. The first is to assemble in advance a portfolio of differentiated product candidates that address meaningful unmet needs that we've identified in women's health. The investment required to do this includes corporate overhead, portfolio acquisition and maintenance costs, and ongoing research and development or R&D expenses. The second part of our model involves monetizing the value of our portfolio's clinical and regulatory advances over the near and the longer term. There are many ways to generate value from products with differentiated outcomes, and one approach includes securing payments upfront and over time in the form of license fees, commercial milestones and royalties on net sales. For our first FDA approved product XACIATO, we recognized $10 million of revenue during the second quarter from an upfront license fee under our global license agreement for XACIATO Organon and the $10 million cash payment was received in the current or third quarter. As my colleagues both mentioned, Dare will be entitled to receive potential additional milestones in royalties, once XACIATO is commercially launched. But back to our current quarter, during the third quarter of 2022, our general and administrative or G&A expenses were approximately $2.7 million. Our R&D expenses, which vary from quarter-to-quarter based on clinical, preclinical manufacturing, regulatory and other activities were approximately $4.5 million and primarily reflected the cost of the ongoing Sildenafil Cream 3.6%, Phase 2b RESPOND clinical trial and the manufacturing and regulatory activities related to Ovaprene. Our comprehensive loss for the quarter was approximately $7.3 million. We entered the…

Thank you. [Operator Instructions] Again, your first question comes from a line of Kumar Raja of Roth Capital.

And so when we think about contraceptive me methods out there today in both the hormone and the hormone-free category, the Pearl Indices are very broad in terms of range. So you'll have products that are implanted where the Pearl Index can be as low as one. And the way to think about it is essentially the inverse of the Pearl Index is the likelihood of becoming pregnant. So a product with a Pearl Index of 1, like an implant where there's no really human error that can be involved, that's essentially a 99% effective product. And then the Pearl Indices range and your typical use therefore effectiveness numbers range hormonal products are also pretty broad range in terms of pills and patches. And there's new data also looking at women with higher BMI and reduce effectiveness in higher BMI. So as you start to look at hormonal products, you can have Pearl Index, Indices as low as 1 or 2 and as high as 8 or 9. And then you have products in the non-hormonal category where you start thinking about things such as condoms. And so a lot of the devices aren't regulated exactly the same way, so you only see the effectiveness numbers. So a condom, a typical use effectiveness would be expected to be about 82%. If you're looking at spermicides, that's about 72% or that would be a Pearl Index of about 27 or 28. And then you've got vaginal gel prescription products Pearl Index of 27. So as you can see, there's a very, very broad range of Pearl Indices for FDA approved products.

So again, think of that sort of range and there's perfect use and typical use, so a little bit complicated in the data, but that's your range to think about. And then, like I said, you've got condoms, which right now are the most commonly used hormone-free, short-acting contraceptive option. And so that's a typical use effectiveness of 82%. So the inverse of that would be a Pearl Index of 18 or so. And then you've got, again, the in the moment other in the moment vaginal products like a spermicide or like a vaginal gel, and those Pearl Index or Pearl Indices are 27. So as you can appreciate, I mean you want a product like Ovaprene and given the form factor, we obviously want it to be as effective as possible. Based on the post-coital test study, which is the pre-pivotal study that was completed which looked at a proxy of typical use effectiveness using a surrogate marker where you look at the ability of sperm to get into the cervix, which had been shown through other studies to be a nice proxy for contraceptive effectiveness, at least translated into that typical use effectiveness numbers, that would anticipate a typical use effectiveness of, 86% to 91%, which would translate into that Pearl Index range if you think of the inverse of that of nine to 14. So you're starting to see it. It's what one would anticipate from a product like Ovaprene is to be in that similar range, to similar types of products and similar form factors that like Ovaprene have a double action. It's got a physical barrier and a chemical barrier. So, but the range is pretty broad of where it could play. And so that's really how, that's right now, the best way we…

Yes, that's very helpful. And with regard to these 200 subjects that you plan to enroll in the study, what is the expectation in terms of the timeline for that? And also what are your expectations in terms of the dropout rate so that what is the ultimate number of patients who will be included in that? Thank you.

Yes, more great question. So we know from other contraceptive studies that the dropout ranges can range based on all the published literature and also from just the learnings we have of working with the NIH and their contraceptive clinical trials network, is that the range is, is pretty broad in terms of dropout rates amongst studies, but it's in that sort of 35% to 55% range. Particularly because these studies, like the Ovaprene study, 12 months of duration that you expect to follow a woman in the study and that's definitely the expectation here for Ovaprene for the Pivotal, it's a 12 month study of following the women. And so we are planning for and we think that's the most prudent thing to do. We're planning for the higher dropout range in that range, so that we can make sure that we adequately enrolled the study to ensure that we have the target 200 women completing the full 12 months of Ovaprene use that we're targeting. So you should expect that we would start with a number of double or more than double that in terms of who we're going to seek to screen and enroll in the study, which then segues nicely into your question of what, well, how long does that take? To get those women in the study? And that's one of the places where, you know, working with the NIH and their clinical trial contraceptive network is very helpful because they have a lot of experience with these kind of studies, both with hormonal products and non-hormonal products. And, and maybe not surprising is enrollment rates can be a little different hormonal non-hormonal product studies actually tend to enroll a little faster than hormone releasing products. So that's exciting. But having said all that right now, the only guidance we're ready to give at this point until we really get an recruitment underway and have a better sense of the metrics ourselves, for our specific product and our specific study is that we're looking to start that, those recruitment activities mid next year. And once that gets underway and we have a good sense of, what trajectory we have in terms of those enrollment, potential enrollment numbers per site, then we'll be able to give some guidance on how many months it's going to take us to enroll the subjects that we need. But in terms of when one should expect data from the study, you being realistic, it's going be at least 12 months out, right? It's a 12-month study. And so it's really just a matter of how much in advance of that 12 months you know, time do we need in order to fully enroll the subject, so a study. So more to follow on that, but hopefully that gives at least a little perspective of how we've been thinking about it and what's been seen with other products.

Great, thank you.

Absolutely.

Great, well thank you so much and thank you all 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, not just the shareholders and definitely the shareholders, but also the women and the healthcare providers as well. And with our diverse portfolio, we seek to bring to market differentiated prescription therapies that prioritize women's health and wellbeing, expand the treatment options where none exist, enhance outcomes where current standard of care has meaningful shortcomings and improve ease of use for women, where a more compelling form factor can drive adoption primarily in the areas of contraception, vaginal health, sexual health, and infertility. Today, as you heard, we have seven candidates in various stages of development and one FDA approved product and two commercialization collaborations under our belt. As I mentioned at the onset of the call, it is our belief that prioritizing women's health is good for the many women lacking effective or convenient therapeutic choices, and also good for a broad set of stakeholders, including their families and partners and of course our shareholders. And it's our belief that the programs in our portfolio represent a compelling opportunity given that potential commercial partners are looking for new differentiated products and candidates with meaningful revenue potential to add to their portfolios. Providers are looking for innovative first line or first-in-category products to address the unmet needs impacting the quality of life of so many of their patients. Women are seeking innovative options to help them navigate their needs and preferences over the course of a lifetime. And investors are looking for a diverse pipeline with high revenue potential and with independent outcomes to mitigate risk and enhance the overall commercial opportunity and where the investment has the opportunity to be disproportionately impactful. We look forward to keeping you updated on our progress through the balance of this year and into 2023 on the milestones forthcoming for our candidates under development and as well as activity with Organon regarding the XACIATO launch in the U.S. that are underway. Thank you so much.

Ladies and gentlemen, thank you for your participation in today's event. You may now disconnect.