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DARE: Pipeline Timelines Intact. Several Development-Related Milestones Upcoming

By Brian Marckx, CFA

NASDAQ:DARE

READ THE FULL DARE RESEARCH REPORT

Q4 / Pipeline Update
Daré Bioscience (DARE) reported financial results for their fourth quarter and provided an operational update. Relative to the financials, operating expenses were $3.0M, while up about 10% and 13% from the prior year and quarter, respectively, they were 11% lower than our estimate. R&D expense, including license fees, was $1.9M, up from $1.5M (+34%) and $673k (+188%) in Q3’18 and Q4’17. We note that Q4 expenses included $275k in upfront payments related to acquisition of rights to the bacterial vaginosis candidate, which happened in December. The comparable periods did not include any license-related expenses. Meanwhile, SG&A expense of $1.0M was down 13% (from $1.2M) sequentially and 50% lower (from $2.0M) than the prior year.

We continue to expect R&D expense and opex as a whole to increase with further progression of DARE’s lead development programs. The acquisition of DARE-BV1 (formerly known as MP-101), the clinical-stage bacterial vaginosis candidate, adds a third lead program.

Cash balance was $6.8M at year-end 2018. Subsequently, in April 2019, DARE received notice that they have been awarded an additional $983k of an anticipated $1.9M in total grant funding from the Eunice Kennedy Shriver National Institute of Child Health and Human Development (another $731k could be awarded in the future).

Management believes that their current cash balance is sufficient to fund operations into Q3 of this year. Cash used in operating activities was $2.7M and $10.3M ($2.8M and $10.9M, ex-changes in working capital) in the three and twelve months ending 12/31/18, compared to $1.0M and $2.5M ($1.6M and $3.7M, ex-changes in working capital) in the prior-year periods.

As it relates to the operational update…
Timelines appear to be largely tracking prior expectations as it relates to development of Ovaprene, Topical Sildenafil and the company’s earlier-stage programs. The most significant product development related news as of late was the December 2018 announcement of DARE’s acquisition of worldwide rights to a late-stage hydrogel-based treatment for bacterial vaginosis (BV) as well as the underlying proprietary hydrogel drug delivery technology that it is built upon. DARE-BV1 potentially represents DARE’s most near-term commercial product. We discuss DARE-BV1, along with the other late-stage programs below. Recent and anticipated near-term development-related milestones include;

Ovaprene
‣ Post-coital test (PCT) commenced in May 2018
‣ Data from PCT expected 2H’19
‣ Assuming positive results (i.e. finding five or fewer sperm per high-powered field in the cervical mucus), will then file IDE to FDA seeking approval to conduct a pivotal randomized controlled study

Topical Sildenafil
‣ Had Type C meeting with FDA in Q3’18 regarding development program including design of Ph2b clinical trial
‣ Nov 27th: DARE announced commencement of Thermographic Feasibility Study (our discussion below)
‣ Content validity study commenced, Nov. 29th press release
‣ Following completion of CVS, will request another Type C meeting with FDA for additional guidance prior to commencing at-home portion of Ph2b study
     ◦ CVS could complete later this year
     ◦ Depending on timing of conclusion of CVS, Type C meeting could happen later this year
     ◦ Depending on conclusion of CVS and Type C meeting, commencement of Ph2b study might also happen in 2019
‣ DARE’s current expectation is to have topline data from the Phase 2b study by Q4 2020

DARE-BV1
‣ File IND (seeking FDA approval to commence Ph3 study) in 2H’19
‣ Commence Phase 3 study in Q4’19
‣ Phase 3 study read-out in 2020
‣ If Phase 3 is successful, file NDA in 2020.

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