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Edited Transcript of DARE earnings conference call or presentation 14-Nov-19 9:30pm GMT

Q3 2019 Dare Bioscience Inc Earnings Call

Cambridge Dec 4, 2019 (Thomson StreetEvents) -- Edited Transcript of Dare Bioscience Inc earnings conference call or presentation Thursday, November 14, 2019 at 9:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* John Fair

Daré Bioscience, Inc. - Chief Business Officer

* Lisa Walters-Hoffert

Daré Bioscience, Inc. - CFO

* Sabrina Martucci Johnson

Daré Bioscience, Inc. - President, CEO, Secretary & Director

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Conference Call Participants

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* Brian W. Marckx

Zacks Investment Research, Inc. - Director of Research and Senior Medical Technology, Medical Device & Diagnostics Analyst

* James Francis Molloy

Alliance Global Partners, Research Division - MD of Equity Research and Biotechnology & Specialty Pharmaceuticals Equity Research Analyst

* Jason Howard Kolbert

Dawson James Securities, Inc., Research Division - Director of Research

* Jason Wesly McCarthy

Maxim Group LLC, Research Division - Senior MD

* Joanne Lee

Maxim Group LLC, Research Division - Equity Research Associate

* Nathan S. Weinstein

Aegis Capital Corporation, Research Division - Analyst

* Rachel Yang

Roth Capital Partners, LLC, Research Division - Analyst

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Presentation

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Operator [1]

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Welcome to the conference call hosted by Daré Bioscience to review financial results for the quarter ending September 30, 2019, and to provide a general business update. This call is being recorded. My name is Sarah, and I will be your operator today.

With us are Sabrina Martucci Johnson, Daré's President and Chief Executive Officer; John Fair, Chief Business Development Officer; and Lisa Walters-Hoffert, Daré's Chief Financial Officer. Ms. Johnson, please proceed.

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Sabrina Martucci Johnson, Daré Bioscience, Inc. - President, CEO, Secretary & Director [2]

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Thank you, and welcome to our financial results and business update call for Daré Bioscience. It's a pleasure to have the opportunity to talk about our third quarter results and our company highlights and upcoming milestones for the remainder of 2019 and 2020.

Before I begin, I would like to remind you that today's discussion will include forward-looking statements within the meaning of the 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, 2018, and our quarterly report on Form 10-Q for the quarter ended September 30, 2019, which was filed on November 12.

I'd also like to point out that the content of this call includes time-sensitive information that is current only as of today, November 14, 2019. Daré undertakes no obligation to update any forward-looking statements to reflect new information or developments after this call, except as required by law.

Daré is a biopharmaceutical company squarely focused on improving the life and well-being of women, primarily in the areas of contraception, vaginal health, sexual health and fertility. We continue to deliver on our vision of becoming the premier accelerator of innovation in women's health by advancing our product candidates to meaningful value inflection points and delivering on key program milestones.

On today's call, we'll review the 2 important and exciting updates that we announced earlier this week. The results of our pre-pivotal clinical study of Ovaprene, monthly hormone-free vaginal contraceptive candidate; and our definitive merger agreement with Microchips Biotech to add an innovative drug delivery platform to our portfolio, with the potential to bring truly game-changing technology to multiple therapeutic areas, including contraception.

After we review these very recent and relevant updates, we'll spend some time discussing the progress of our late-stage assets, DARE-BV1 and Sildenafil Cream, 3.6%, and the upcoming milestones you can expect in the balance of 2019 and 2020.

Let's start with Ovaprene. We are extremely pleased to be able to share with you the top line findings of our Ovaprene postcoital test clinical trial, a pre-pivotal clinical study. These results are in line with our expectations for this product and set the stage for filing the investigational device exemption or IDE application, which is an important step toward advancing the product into what we believe will be a single pivotal clinical trial.

For investors that are new to the Daré story, the prescription contraceptive market is valued at more than $5 billion in the U.S. alone. What that means for a company like ours that are actively innovating in this area is that a few market share point can deliver significant value. An independent analysis estimates that every 1% of the total prescription contraceptive market equals roughly $160 million in branded prescription value. So a product that is able to garner high single-digit market share, like Merck's monthly hormone contraceptive NuvaRing, for example, can deliver between $500 million and $1 billion of top line sales.

Currently, there aren't any effective -- highly effective, hormone-free options available to women that are fully women-controlled and designed to suit her lifestyle and life stage via convenient monthly dosing. This clear and persistent unmet need encouraged us to identify a product that could be a viable and effective new option and eventually led us to the Ovaprene hormone-free monthly vaginal contraceptive.

Ovaprene has an opportunity to be a truly disruptive technology. It has once per month convenience associated with Merck's monthly contraceptive NuvaRing, which had global sales of over $900 million in 2018 and the potential to offer effectiveness in the same range of hormonal products but without the use of hormones. We believe that is important because there are a significant number of women who are seeking alternatives to hormonal contraceptives. In some cases, they're contraindicated, meaning they're not able to take hormones because of an existing medical condition or they're unwilling to use hormones as the primary method of birth control. We believe these women could be very early adopters of the product, but we also anticipate that current users of hormonal birth control will be interested in Ovaprene since the classic side effects associated with hormones, including weight gain, nausea and mood changes, could be avoided, which is why we are so excited to review our top line Ovaprene PCT findings with you today on the call.

To begin, a postcoital test or a PCT is a rigorous clinical trial designed to challenge a device like Ovaprene via a predictive surrogate marker for contraceptive effectiveness. It involves taking numerous samples from each subject's cervical mucus post intercourse during ovulation, which is the most vulnerable time for women in terms of conception. These samples have been analyzed by trained clinicians, utilizing a high-powered microscope to determine the number of progressively motile sperm in the samples. The results are considered a surrogate for the contraceptive effectiveness. The fewer the sperm observed, the more effective the device is likely to be in terms of preventing pregnancy.

As we stated in our recent press release, we are very excited to report that the PCT study met its primary endpoint. 100% of women and across 100% of cycles in which Ovaprene was worn, Ovaprene prevented essentially all progressively motile sperm from reaching the cervix. To put this data into perspective, women enrolled in the study had a mean of 27.21 progressively motile sperm per high power fields in their baseline cycle. That's without the Ovaprene device. That means all of the women enrolled in the study had partners with viable sperm and sperm counts. Importantly, all the women enrolled in the study had normal ovulation cycles, and samples were taken during peak ovulation, the most challenging time frame for a contraceptive device like Ovaprene.

The top line results for Ovaprene revealed that women utilizing the Ovaprene device had a mean of 0.48 progressively motile sperm per high power field in their Ovaprene PCT cycles, with a median of 0 progressively motile sperm. To put that in perspective, that means in this study, Ovaprene was nearly 100% effective at preventing progressively motile sperm from reaching the cervical canal across all the women and all the cycles.

Other contraceptive products have demonstrated no motile sperm in the cervical mucus in their PCT clinical studies of similar size, went on to demonstrate typical use contraceptive effectiveness of 86% to 91% in pivotal studies evaluating pregnancy rates over a 6-month period, similar in range to typical use effectiveness rates of hormonal methods like pills, patches and vaginal rings such as the NuvaRing monthly vaginal ring that we discussed earlier.

As we have previously communicated, the data from this study will be used to support an IDE filing with the Center for Devices and Radiologic Health, the division of the U.S. Food and Drug Administration that has been designated to review Ovaprene under the FDA's premarket approval process. Pending FDA review and clearance of the IDE, we plan to initiate a pivotal contraceptive effectiveness and safety study of Ovaprene in the second half of 2020. If successful, we expect that study to support marketing approval of Ovaprene in the United States, Europe and other countries worldwide.

In addition to the outstanding news on Ovaprene this week, we also have another important and exciting update to share with you that will give us access to what we believe is another potentially game-changing drug delivery technology platform. By now, you may have seen the news detailing our agreement to acquire Microchips Biotech, an innovative biotechnology company that is working at the cutting-edge of drug delivery. The technology platform was developed by renowned MIT researchers, Dr. Robert Langer and Dr. Michael Cima, and has received investment funding by leading health care and venture investors, including Polaris Venture Partners, MS Pace, Intersouth Partners and Teva Pharmaceuticals.

The contraceptive development program, in particular, has been supported by up to $20.5 million in grant funding from the Bill & Melinda Gates Foundation to further refine and develop this long-acting, user-controlled, implantable contraceptive system designed to enable women to customize the regulation of their fertility by enabling and disabling the device, controlling the release of the active contraceptive agent remotely.

I'll ask our Chief Business Development Officer, John Fair, to provide a little more insight into the technology.

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John Fair, Daré Bioscience, Inc. - Chief Business Officer [3]

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Thank you, Sabrina. We believe the acquisition of this highly complementary product candidate will translate into immediate value creation for Daré. This program is fully funded through its current stage of preclinical development and is eligible to receive up to $2.5 million in additional funding from the Gates Foundation in 2020, which will cover the cost of ongoing preclinical development activities, and when combined with amounts already received to date, will bring the total grant funding to approximately $20.5 million. It's an important new technology for us and that there's truly nothing else like it on the development landscape, and it doesn't compete with or in its current stage, draw resources from any of the technologies we are currently developing for women's health.

The technology is a microchip-based implant that is a self-contained, hermetically sealed drug device. The device in its final iteration is intended to be easy to implant and remove, store numerous therapy doses that can be delivered over months or years and deliver each dose on a precisely timed, predetermined schedule to achieve the desired therapeutic effect. The device is designed to be controlled by the patient via a wireless remote, and importantly, for the contraceptive indication to be completely disabled by the patient for rapid return to fertility. We think of it as a user-controlled, long-acting form of contraception akin to a contraceptive implant that has the innovation of being able to be turned off or on based on the needs or the desires of the user. The functionality shall allow for convenient return to fertility, giving her the ability to resume her protection upon her discretion at some future date. It's an exciting new technology that we believe holds a tremendous amount of promise and is a great addition to our portfolio.

With that, I'll turn it back over to Sabrina.

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Sabrina Martucci Johnson, Daré Bioscience, Inc. - President, CEO, Secretary & Director [4]

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Thank you, John. In the time that we have left, I'd like to highlight progress on our bacterial vaginosis or BV program, DARE-BV1, including our Phase III preparations and time line; and Sildenafil Cream, 3.6%, our novel cream formulation of sildenafil with the potential to be the first FDA-approved treatment option for female sexual arousal disorder.

DARE-BV1 is a novel thermosetting bioadhesive hydrogel formulated with 2% clindamycin, an antibiotic used to treat certain bacterial infections, including BV. DARE-BV1 is designed to be administered in a convenient, single, vaginally delivered application. The bioadhesive properties of DARE-BV1 are believed to prolong the duration of exposure to clindamycin relative to currently marketed creams, potentially improving the rate of clinical effectiveness compared to existing FDA-approved therapies. Current FDA-approved therapies to BV have clinical cure rates ranging from 37% to 68%. In an investigator-initiated proof-of-concept study that enrolled 30 women, DARE-BV1 demonstrated an 86% clinical cure rate in the 26 evaluable subjects at the test of cure visit after one administration.

We plan to utilize the FDA's 505(b)(2) pathway to obtain marketing approval of DARE-BV1 for BV in the U.S. To that end, we're currently working on regulatory and start-up activities that are necessary to commence the Phase III multicenter, randomized, double-blind, placebo-controlled study in the U.S. and expect to initiate this study in early 2020. We plan to enroll approximately 219 women. The primary efficacy endpoint of the study will be clinical care at the evaluation visit to occur 21 to 30 days after enrollment in the study, with clinical cure defined as resolution of specified clinical signs and symptoms. If the Phase III and the nonclinical studies that we plan to conduct in parallel with the Phase III are successful, we expect to be in a position to file an NDA with the FDA in late 2020 or early 2021.

To provide additional data and support DARE-BV1 value proposition, we also plan to conduct an extension study, during which subjects will receive no additional treatment that will be evaluated 60 and 90 days post dosing with DARE-BV1 to evaluate the duration of response or sustain clinical cure. As compared to treatment with metronidazole vaginal gel, which is the treatment that subject in the Phase III study will receive if the BV symptoms are not otherwise resolved. We anticipate that the extension study will provide important data to support DARE-BV1 as a differentiated treatment option with both clinicians and payers.

Finally, I'm excited to provide an update on our Sildenafil Cream, 3.6% program, which incorporates sildenafil, the same active ingredient in the male erectile dysfunction drug, Viagra. If approved, Sildenafil Cream could be the first FDA-approved FSAD treatment option for women.

Female Sexual Arousal Disorder or FSAD, as I referred to it, is a condition characterized primarily by a persistent or recurrent inability to attain or maintain sufficient general arousal during sexual activity, frequently resulting in distress or interpersonal difficulty. As with erectile dysfunction in men, FSAD in women is associated with insufficient blood flow to the genitalia. Sildenafil Cream is designed to increase genital blood flow and provide improvement in the female genital arousal response while avoiding systemic side effects observed with oral formulations of sildenafil. We plan to leverage the existing data and establish safety profile of sildenafil and the Viagra brand to utilize the FDA's 505(b)(2) pathway to obtain marketing approval of Sildenafil Cream in the U.S.

During the third quarter of 2018, we had a Type C Meeting with the FDA regarding the design of our Phase IIb clinical trial for Sildenafil Cream and the overall development program for this product candidate. Based on the FDA guidance we received from that meeting last year, we conducted a non-interventional study -- intentional study intended to support the content validity of specific patient-reported outcomes or pro measures for subsequent clinical studies of Sildenafil Cream. The pro content validity study, which was completed in the third quarter of this year 2019, was designed to identify and demonstrate which symptoms are the most important and relevant to our target population since these are the general arousal symptoms that we would want to assess in our Phase IIb trial, in which subjects will use Sildenafil Cream and placebo cream in their home setting, as well as our Phase III studies. Now that we have those results, the timing of initiation of the Phase IIb clinical trial will be influenced by the additional FDA guidance, which we expect to receive prior to the end of 2019. In anticipation of that FDA guidance, we are conducting start-up activities for the Phase IIb trial.

In addition, we have performed and we will continue to perform additional clinical and nonclinical work that might be valuable or required to support the overall program, such as the recently reported positive findings from a human clinical study using thermography to assess the pharmacodynamics of Sildenafil Cream in healthy women. The finding showed a statistically significant increase in genital temperature, a surrogate for general blood flow for Sildenafil Cream when compared to placebo and demonstrated that Sildenafil Cream elicits a quantifiable general response within 11 to 15 minutes of application. The study of 6 women also demonstrated statistically significant differences between Sildenafil Cream and placebo on measures of self-reported arousal. This is meaningful because self-reported arousal will be a component of the primary endpoint of the Phase IIb study.

Before I turn the call over to Lisa Walters-Hoffert, our CFO, I'd like to reiterate that we believe each candidate in our portfolio, those mentioned here today, as well as those we did not discuss, has the potential to become either a first-line therapy or a first-in-category solution or both and delivers on our mandate to address persistent unmet needs in women's health.

I'll now turn the call over to Lisa to review our financials.

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Lisa Walters-Hoffert, Daré Bioscience, Inc. - CFO [5]

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Thanks, Sabrina, and thanks to all of you for participating on this update call. I would now like to summarize our financial results for the third quarter ending 2019.

As previously noted, Daré's primary operations have been and are expected to continue to be research and development to advance our portfolio of product candidates through clinical development, and ultimately, regulatory approval. During the quarter ended September 30, 2019, our expenses included general corporate overhead, portfolio maintenance in the form of licensing fee accruals and expenses for research and development to advance these candidates towards the clinical milestones. Daré's general and administrative expenses were approximately $1.3 million, and our research and development expenses were approximately $2 million for the quarter. Most of our R&D expenses fell into the buckets that Sabrina just discussed, the Ovaprene in PCT clinical trial, work to prepare for the initiation of the Phase III study of DARE-BV1, activities to advance our other programs and personnel costs.

Our comprehensive loss for the quarter was approximately $3.4 million. We ended the third quarter with cash of approximately $2.4 million, 16.8 million common shares outstanding and approximately 3.7 million warrants to purchase shares of our common stock and no debt.

As Sabrina mentioned this past Monday, and as disclosed more fully in Footnote 11 of our 10-Q filed on Tuesday, Daré announced that it entered into an agreement and plan of merger with Microchips Biotech, whereby if the merger closes, Microchips will become a wholly owned subsidiary of Daré. This merger is expected to close on or before November 22, 2019.

In addition to acquiring an exciting technology platform, relationship with the Gates Foundation and a seasoned development team to complement our own, at the time of closing, we expect Microchips' cash and cash equivalents to be approximately $6.9 million and approximately $5.7 million of cash after the payment of transaction-related expenses. At closing, Daré will issue 3 million shares of its common stock in consideration of the cash and cash equivalents of Microchips, less liabilities and issue those shares to the Microchips' stockholders, which as Sabrina has just mentioned, include Polaris Venture Partners, MS Pace, Intersouth Partners and Teva Pharmaceuticals. We are thrilled to add these fundamental health care funds to our investor base.

In addition, Daré has agreed to pay future contingent consideration for the achievement of specified funding, product development, regulatory and commercial milestones as well as tiered royalty payments. We expect that less than $1.3 million of this contingent consideration will become payable through the end of 2021, and such payments may be paid at our option in shares of our common stock or cash, subject to compliance with NASDAQ rules.

In our recently filed 10-Q, we also noted that Daré continues to have a going concern as our existing resources will not be sufficient to fund our planned operations through November of 2020. Again, we encourage all investors to review the more detailed discussion in our 10-K filed with the SEC on Tuesday, relating to our definitive merger agreement with Microchips and our liquidity and capital resources and financial condition.

I would now like to turn the call back to Sabrina.

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Sabrina Martucci Johnson, Daré Bioscience, Inc. - President, CEO, Secretary & Director [6]

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Thank you, Lisa. So we continue to view 2019 as a transformational year for Daré, and we believe we are well positioned to continue to create and capture value from our portfolio of women's health product candidates, particularly as we go into 2020 with the planned DARE-BV1 Phase III study initiation and readout, Sildenafil Cream Phase IIb study initiation and Ovaprene pivotal study initiation.

I also want to add that we continue to have productive conversations with potential strategic partners for our late- and mid-stage assets, and we are encouraged by the number of companies that have indicated interest in one or more of our programs. As we have discussed, we will continue to evaluate those collaboration opportunities and the timing of such partnerships in context of what we believe will drive the greatest value for our shareholders. Importantly, we believe that the level of interest in our portfolio from potential strategic partners from our earlier-stage programs to our mid- and our late-stage assets position us well to drive significant value in both the short and long term for investors, and most importantly, for women as well.

We will now turn it over to the operator, who will open the lines for Q&A.

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Questions and Answers

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Operator [1]

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(Operator Instructions) Our first question comes from the line of Yasmeen Rahimi with Roth Capital Partners.

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Rachel Yang, Roth Capital Partners, LLC, Research Division - Analyst [2]

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This is Rachel Yang on for Yasmeen. So first, can you walk us through -- so how -- can you walk us through how you determine acquisition of assets? What type of assets do you believe sit well within your current pipeline?

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Sabrina Martucci Johnson, Daré Bioscience, Inc. - President, CEO, Secretary & Director [3]

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Yes, thank you for that question, the opportunity to give some clarity on that. So as we think about assets to add to our portfolio, they really have to meet 4 minimal criteria. And ideally, even more than that as the Microchips hit on a number of those.

So first and foremost, they have to clearly address the persistent unmet need because what's interesting to us is to add assets that have meaningful commercial viability, and so that really means that they have to be addressing a need that is not currently addressed today.

Second, we love a program that has existing data and proof of concept, and ideally, even human proof of concept.

Third, programs that have an opportunity to leverage an interesting regulatory pathway that we know from other areas really reduces your risk, meaning a 505(b)(2) pathway are very, very interesting to us.

And that kind of ties into our fourth category of importance, which is we look for programs that are really delivering products in ways that are unique for her and often that take advantage of sometimes unique female biology so that we can enhance convenience and outcome by sometimes avoiding systemic, meaning oral drug delivery.

And so Microchips is a wonderful example of the technology and an opportunity that hit on all 4 of those really important criteria. But beyond that, really went above and beyond, the incredible relationships that -- kudos to the team at Microchips that they had formed with the Bill & Melinda Gates Foundation. To have the kind of support that the foundation has provided for that program is obviously a relationship that we're really thrilled to now personally have as a company and to take that program forward with that. And an opportunity to have a program like this, as John and Lisa both noted in their comments, are funded. The next phases of development are funded. So it doesn't take away from other programs and other activities that we have here, is a plus. And boy, icing on the cake is it is a really wonderful opportunity to be able to -- in exchange for that cash that they have on hand, to be able to issue our shares to investors like theirs that are now going to be Daré investors, and that's really exciting for us as well. So hopefully, that answers your question.

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Rachel Yang, Roth Capital Partners, LLC, Research Division - Analyst [4]

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That's very helpful. And I have a follow-up, can you walk us through how you plan on financing the Ovaprene Phase III program? And which components of the trial designs are set in stone and which are up to negotiation?

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Sabrina Martucci Johnson, Daré Bioscience, Inc. - President, CEO, Secretary & Director [5]

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Yes. So thanks for that opportunity. I think I'll use that opportunity to kind of highlight some of the comments I made in my kind of closing remarks before we entered into the Q&A.

So we are very, very fortunate, and I think it speaks to the work we've done to build the preeminent portfolio in women's health, the products that truly address persistent unmet needs. We have been very, very fortunate to have productive conversations with potential strategic partners, with a number of companies that have indicated interest in one or more of our programs. And certainly, Ovaprene is a program of interest, given the opportunity it has to be such a potentially disruptive technology in the contraceptive category.

But as I also mentioned, we will -- we're going to continue to evaluate this collaboration opportunities and really make a decision around the type of partnerships and the timing of such partnerships in the context of what we believe will drive the greatest value for our shareholders. So we look forward to keeping you updated on our progress on that and on the interest that we have across our portfolio.

As it pertains to the clinical development program, filing an IDE is really our first opportunity in that process around -- an IDE filing is Daré's opportunity, really our first opportunity to engage robustly with the FDA around that clinical development program. We obviously know from other products that have gone through that same division of the FDA, what they have typically done in their -- what they've been required to do in their pivotal programs, typically, it's been 1 pivotal study, 6 months in duration and evaluating up to about 250 subjects as completers at the end of that 6 months. So that's what's happened with other products. Obviously, Ovaprene is a very brand-new category of product. That's why it's so exciting and so interesting. It's the first once-a-month, hormone-free product. Everything else that's gone through that division of the FDA has been a spermicide on demand, a condom on demand, a diaphragm on demand. So we're really looking forward to having these interactions now with the FDA and to providing clarity and guidance as we move forward on that program.

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Rachel Yang, Roth Capital Partners, LLC, Research Division - Analyst [6]

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Great, and congrats on your progress.

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Operator [7]

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Our next question comes from the line of Jason McCarthy with Maxim Group.

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Joanne Lee, Maxim Group LLC, Research Division - Equity Research Associate [8]

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This is Joanne Lee on for Jason. Regarding the acquisition of Microchips Biotech, I was wondering if you could go over some of the details on the ongoing contraceptive implant program, which I understand is being fully funded, and then some further guidance on its pathway to approval.

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Sabrina Martucci Johnson, Daré Bioscience, Inc. - President, CEO, Secretary & Director [9]

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Yes. So that development program is still in the preclinical stage. It has -- the technology has been through a human study, which is, like I say, we like products that have been through proof of concept, to show kind of proof of concept for the technology, but in the contraceptive area in the preclinical stages of development.

And really, at this phase in the development program, there's really 2 core focus areas of activities. One is obviously around the technology itself and optimizing the device design and release profiles and things like that. So typically, as you would do for any -- think about any kind of preclinical program and often what you're doing at that phase in development as you're preparing to go into human clinical studies. So that really includes the animal work as well as design work that would be done at this phase in the development program.

As well as it's a great opportunity to also do market research with women to really understand how she would like to use a technology like this to make sure we're achieving all those design objectives. So that hopefully gives you a sense of kind of how we're thinking about these next phases of development. And I'm trying to remember if there was more to your questions...

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Lisa Walters-Hoffert, Daré Bioscience, Inc. - CFO [10]

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And you did ask about the funding. So in our press release and in the Q, we announced that Gates had -- there was available funding up to $20.5 million. Approximately $17.9 million, so call it $18 million has been issued and granted to date. So there's another $2.5 million, which as Sabrina noted, if received, will fund our operations into 2021. So what's nice about that program is it did come with existing funding, which was a great opportunity for Daré.

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Sabrina Martucci Johnson, Daré Bioscience, Inc. - President, CEO, Secretary & Director [11]

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And really to fund those next phases of activity, including the animal work.

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Jason Wesly McCarthy, Maxim Group LLC, Research Division - Senior MD [12]

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Okay. It's Jason. I'm on -- I'm actually on the call, too. I just wanted to jump in with another question. I don't know if you're aware. Just like half an hour ago, Agile's hormonal contraceptive, it got the PDUFA extended all the way until February, I think which was unexpected. Can you discuss just a little bit maybe your views on the FDA's willingness or efforts to really bring more women's health products and particularly contraceptives to approval into the market?

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Sabrina Martucci Johnson, Daré Bioscience, Inc. - President, CEO, Secretary & Director [13]

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Yes, it's a great question, and thank you for giving us the opportunity to talk about the field. And I think, frankly, it also gives us an opportunity to talk a little bit about our business model at Daré.

So as we've talked about our portfolio, and this is true whether I'm talking to you about BV1 or Ovaprene or Sildenafil Cream or I can keep going, we've worked in the Microchips program, we've worked very, very hard as we have designed and built our portfolio to achieve a couple of objectives. One being, I didn't mention, but I probably should have on the call, it's an interesting portfolio of design because we constantly -- while we're hitting our operational targets and milestones for you, all investors, we are also -- it's kind of tiered as you think about data, clinical and regulatory kind of events across the portfolio. So I think that's interesting in a portfolio structure.

But to your specific question, about the FDA and their interest in approving products for women, we strongly believe that they absolutely are interested in approving products for women and ensuring that women have products to address clearly defined persistent unmet needs. And I can speak to our sildenafil program. As you know, we had a Type C Meeting last year. We are having ongoing discussions obviously with the agency, which is why we feel we'll have clarity as we go into the end of the year. So there's definitely interest and enthusiasm with working with sponsors to bring new products to market for women. So we, as a company, don't doubt for a second that willingness.

I will say, from a risk and a portfolio design perspective, we have tended to lean towards, again, areas where there's a very clear persistent unmet need, meaning that there is no other product in the category that could be considered to be exactly or even marginally equivalent to our program, right? So BV1, onetime administration of clindamycin. So while there's other clindamycin creams and while there's even another onetime cream, it's a cream, it's not a clear gel. It -- this is bioadhesive. If you look at Ovaprene, it's the first ever hormone-free, once-a-month contraceptive. If you look at sildenafil, it's the first product being developed for arousal disorder, where there is nothing else in the category approved. And while that -- I do not mean to imply in any way, that means anything is a slam dunk, right? You always have to work with the agency and your product. In the end, the benefits have to outweigh the risks. It's definitely a certain type of conversation with the agency when they're looking at a category where there is nothing else available for someone as opposed to when they're looking at a category and there's a perception that there may be something similar enough that your offering isn't quite as differentiated.

So why don't I end it there because we are 100% rooting for Agile and really want to see them be successful because we do think that their product is interesting and that it will be an important and a nice addition to the armamentarium that's available today. But hopefully, that gives some context for us, for Daré, how we built our portfolio and how we are looking at our FDA interactions.

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Operator [14]

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Our next question comes from the line of Jason Kolbert with Dawson James.

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Jason Howard Kolbert, Dawson James Securities, Inc., Research Division - Director of Research [15]

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Most of my questions have been answered, but what I'd like to focus on 2 areas. One is, Lisa, you talked about the fact that you spent $3.4 million in the quarter. You ended with $2.4 million in cash plus the acquisition essentially as a finance -- a nondilutive financing. Help me understand, all other things being the same, what your cash runway looks like today?

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Lisa Walters-Hoffert, Daré Bioscience, Inc. - CFO [16]

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Yes, and thanks for the question. We don't provide specific runway guidance because -- on a quarterly basis or even on an annual basis. We didn't say we don't have cash through 2020 of November of next year. But as you pointed out, though, the $2.4 million and then the net $5.7 million that we acquired, some of that's going to go to cover the Microchips' ongoing research and development activities, preclinical that Sabrina described. But the excess funds we can use, we will be acquiring them. So I wish I could be more specific, but that's kind of as much as I can say right now.

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Sabrina Martucci Johnson, Daré Bioscience, Inc. - President, CEO, Secretary & Director [17]

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Yes. And I think what I would add to that, Jason, and thank you for asking that question, because one of the things we're very proud of as a company, and I think, again, it bodes well for our investors, if you look at how much we've accomplished with how little we spend is we're incredibly capital-efficient and really try to focus our spend on things that can drive value inflection. So most of the money we bring in goes to clinical and regulatory milestone events. And we leverage grant funding wherever we can. So the Ovaprene program is really, to this point, essentially funded by the NIH, which we are incredibly thankful for the support of the NIH for that program.

So I think what you can see going forward is that we are very -- as a company culture, we're very capital efficiency-minded. And I think what you can expect from us going forward is that same sort of low overhead burn that we have showed historically, and that we will continue to be creative in funding sources like the Gates Foundation opportunity around Microchips, the NIH that we've had around Ovaprene. And as we look at forward looking, continue to be as creative as we can in terms of funding strategy to achieve as much as we can with as much nondilutive capital as possible. And when we are using equity capital that we are incredibly mindful on how that's spent and that it's really driving value.

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Jason Howard Kolbert, Dawson James Securities, Inc., Research Division - Director of Research [18]

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Good. And I get that, and I think that comes through, and I think that's an important element of the acquisition that you made. So I understand that.

Can we talk a little bit about the linkage between business development and kind of the up-and-coming proof-of-concept status, if you will, of Ovaprene, BV1, sildenafil? And kind of just individually, next catalyst, where you are on proof of concept and what the BD level of interest is on those 3 programs in particular?

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Sabrina Martucci Johnson, Daré Bioscience, Inc. - President, CEO, Secretary & Director [19]

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Yes. I can't stress enough, and if I put in all bold letters if I could, just how incredibly fortunate, and frankly, validating it is to see the level of interest that we continue to have in our portfolio really across the programs and the interest that there has been in the programs.

We just came back from BIO-Europe. We're always doing these kind of partnering meetings, John and I, and so we're super excited about that level of interest. And we're having that level of interest right now in the portfolio because, to your point, we've got 3 programs, each of which is at an interesting value inflection point.

Ovaprene, having reported out the kind of data that we just reported, given the field of PCT studies and how robust our PC study is and how predictive those kind of studies are of highly effective contraceptive methods. Clearly, being the first potential monthly, hormone-free contraceptive. Lots of interest in Ovaprene, obviously.

But the same goes for our BV1 and our sildenafil program. I mean BV1 with the level of effectiveness that it has the potential to deliver and how quickly and efficiently, to your point, we can get through that Phase III and have a clinical readout in 2020, which is an important milestone for that program around a commercial partner. Obviously, it's going to want Phase III data and NDA filing for progress that phase of development. That's a really interesting milestone that we have coming up right in 2020.

And for Sildenafil Cream, getting through these discussions that started last year with the FDA and that we're continuing this quarter, that's an important milestone for the Sildenafil Cream program that I can't emphasize enough. This is the first potential product for treatment of female sexual arousal disorder, which is her version of erectile dysfunction. There are actually more women with arousal disorder than there are men with erectile dysfunction, and they are just as distressed and just as motivated. And getting through these discussions with the FDA, which provides clarity for the Phase IIb and Phase III program, is a really important event for that program as we'll be getting through that Phase IIb study. Once we get through that Phase IIb study, really, hopefully, demonstrating success against those patient-reported outcomes of general arousal sensations. That's an incredible milestone for the company, and we're planning on running that study in 2020.

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Jason Howard Kolbert, Dawson James Securities, Inc., Research Division - Director of Research [20]

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Congratulations on all the progress. It's really exciting. I have to believe that the BD level and trust among specialty pharma and even some of the large pharmas got to be really, really high. It would be interesting to see a deal come together.

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Sabrina Martucci Johnson, Daré Bioscience, Inc. - President, CEO, Secretary & Director [21]

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Thank you.

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John Fair, Daré Bioscience, Inc. - Chief Business Officer [22]

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Thank you.

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Sabrina Martucci Johnson, Daré Bioscience, Inc. - President, CEO, Secretary & Director [23]

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Thank you. We feel the same. So we're -- like I said, it's very validating to have the kind of interest that we have.

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Operator [24]

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Our next question comes from the line of Jim Molloy with Alliance Global Partners.

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James Francis Molloy, Alliance Global Partners, Research Division - MD of Equity Research and Biotechnology & Specialty Pharmaceuticals Equity Research Analyst [25]

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I had a quick question on the Microchips, following up on that a little bit. Can you talk a little bit about what the extent the costs are to get to the next key catalyst and the cash that comes in and the potential additional cash from the Bill & Melinda Gates Foundation? Does that cover it? Or is there an -- will there be a need for additional capital? And is there an option for the Bill & Melinda Gates Foundation to kick in additional capital?

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Sabrina Martucci Johnson, Daré Bioscience, Inc. - President, CEO, Secretary & Director [26]

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Great, great question. So as Lisa mentioned, and I'll kind of reinforce that the Bill & Melinda Gates Foundation, the funding level of the collaboration has been $20.5 million. Not all of that has already been received. So I think that's yes as an answer. As she noted, about $18 million has come in to date, and there's about $2.5 million of ongoing funding that's already just part of that current grant agreement. Obviously, we can't speak to what the future looks like, but this certainly fits into the kind of programs that the foundation has been interested in supporting truly disruptive technologies in the contraceptive space that allow the opportunity for a super highly effective contraceptive method. Implants are by far the most effective contraceptive method, but give her the ability to control her family planning and fertility.

So we really look forward to that ongoing relationship and feel very good that the activities really that we described and kind of getting to those next phases, including the next phase of funding that can come in next year into that current grant really is sufficient to get through that point. And then obviously, upon success, we'll look forward to continuing to secure funding as appropriate for that program.

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James Francis Molloy, Alliance Global Partners, Research Division - MD of Equity Research and Biotechnology & Specialty Pharmaceuticals Equity Research Analyst [27]

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Right. My point is, of course -- and I mean in addition to the $2.5 million that's left on the current grant that I guess we'll see if they -- if that'll come in or not, and I see on your website from a while ago, it looks like they had a deal with Teva from back in the day. Is that something that is ongoing? Or can you talk a little bit about sort of Microchips' relationship? Anything there?

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Sabrina Martucci Johnson, Daré Bioscience, Inc. - President, CEO, Secretary & Director [28]

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Yes. So the technology is really an interesting one that has a lot of utility and promise, as I mentioned kind of upfront, outside of the contraceptive field. The contraceptive field is a really great one actually to spend the time and effort on doing this kind of work on because we know there are drugs that can release over long periods of time and are stable in that environment. So it's a great place to do kind of this stage of work on the program and think about as first indications, but there are absolutely other therapeutic areas.

So Teva, at one point, was involved in the program and had some support for the program, as you noted. And clearly, also they're now investor getting some of our Daré shares. So I think there are other opportunities like that for those kinds of collaborations to continue to support the ongoing development of the program, and particularly as we think about other therapeutic areas. We're very focused on women's health. Obviously, here at Daré, but an implant like this is agnostic to gender. You can put an implant in men or women.

And so certainly, hopefully, from the answers we just gave around business development in general here at Daré, we're partnering, we're all about partnering appropriately in nondilutive capital that those kind of opportunities bring. So we will absolutely also look at other areas where this technology could have utility and look for those kind of partnering opportunities as well.

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James Francis Molloy, Alliance Global Partners, Research Division - MD of Equity Research and Biotechnology & Specialty Pharmaceuticals Equity Research Analyst [29]

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Great. So one last question, and then I'll hop back in the queue. On the BV1 trial, to make it clear, looking for data here, Phase III top line in 2020. When do you have to start that trial by to get that 2020 data?

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Sabrina Martucci Johnson, Daré Bioscience, Inc. - President, CEO, Secretary & Director [30]

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Really, right now, the plans are -- we're already doing a lot of the start-up activities that are associated, and the plan is to actually start the trial in 2020, and that time line is what supports us having data in that year.

It's a relatively short study. So as I mentioned, the primary endpoint visit is at day 21 to 30. I should be clear that, that pivotal study, not the extension study that I talked about, which goes out to another 60 days, but just that pivotal phase at day 21 to 30, that's the part that we need for the NDA filing. So as you can then guess, given how short the study is, you could start the study. There's a lot of leeway on when to start the study in 2020 to have a data readout in 2020.

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Operator [31]

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Our next question comes from the line of Brian Marckx with Zacks Investment Research.

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Brian W. Marckx, Zacks Investment Research, Inc. - Director of Research and Senior Medical Technology, Medical Device & Diagnostics Analyst [32]

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Congrats on all the progress. Sabrina, I wondered on BV1 whether there's any regulatory or patient sign-offs that you need before you can start that study?

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Sabrina Martucci Johnson, Daré Bioscience, Inc. - President, CEO, Secretary & Director [33]

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Yes. So great question. So as we had mentioned in the past with that program, one of the things that we had to do as a company was file our own IND because the prior work has been investigator-initiated. So we have to file a Daré IND. So that's obviously an important step in the program, and the time line that we talked about reflects that process of IND filing and clearance.

And then yes, so an important thing in a study like this is obviously the patient consents. And particularly in the study like this one, where they have an active infection and they're going to get an investigational treatment, and so a big part of operationally successfully running a study like this is setting appropriate expectations around when they can have something else if by product or placebo. That's what you really worry about in these studies because patients are going to be randomized to placebo, and you want to give them comfort that, don't worry, we will give you something if you're randomized to placebo over time to manage your infection. And so operationally, those important discussions and consent are a big piece of it.

And so as we look at starting up that study, part of the activities that, for instance, one does now before you literally get going is look at obviously all those protocol considerations. You have to take in to make sure that you're going to be able to roll the right kind of women and keep demand and get them comfortable that they're going to have treatment. But a big piece of it is enrolling the right sites. And fortunately, there have been other BV studies. We have a good sense of who the sites need to be in the United States and then have really good experience with these kind of infectious disease-type studies, where you really have to have a placebo control but want to make sure that women have -- stay in and know that they're going to get treatment over time if they were randomized to placebo. So thanks for asking about that.

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Brian W. Marckx, Zacks Investment Research, Inc. - Director of Research and Senior Medical Technology, Medical Device & Diagnostics Analyst [34]

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Yes, I appreciate the detailed answer. Relative to the extension study of the BV1, is that a certainty that you're going to run the extension portion of it? Or is that a to be determined?

And then also on that, are those results something -- if you do conduct that portion of it, something that you will announce, you're certain that you will announce?

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Sabrina Martucci Johnson, Daré Bioscience, Inc. - President, CEO, Secretary & Director [35]

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Yes, thanks for asking that clarifying question. So right now, the intent is to conduct the extension study. It's something that we've looked at based on what we've done with payers, what we've done with -- to some of the earlier questions on potential partners, right, potential commercial partners for this program, what might be interesting for them to see that really helps differentiate the program.

So as the -- as this program progresses, we'll continue to provide clearer and clearer kind of guidance, as we did with Ovaprene, if you think back to that program on when we're going to have different clinical readouts, when things are starting.

But right now, given how inexpensive that component of the study is -- and again, I refer you to the Q, it has really nice detailed information around the clinical program and the cost. But given the low incremental cost for that extension study but the significant upside it can provide in terms of payer, relationship of payers and potential partners, it certainly is in our plans, and we look forward to being able to give some clearer guidance on exactly when we'd expect that data as well.

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Operator [36]

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Our next question comes from the line of [Suzanne Meline] with [Catalysis Partners].

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Unidentified Analyst, [37]

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Congratulations on the successful completion of the Ovaprene postcoital study. I share your enthusiasm for the asset. I was trying to keep track of the different licensing fees that you guys have to pay, and I was curious whether any of the licensing fees to ADVA kick in now that you've successfully completed the postcoital study.

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Sabrina Martucci Johnson, Daré Bioscience, Inc. - President, CEO, Secretary & Director [38]

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Yes, we haven't given that level -- thanks for the question. Typically, for competitive reasons, we don't give that level of guidance. We request confidential treatment with the SEC when we file our agreement, so that specific timing of milestone, events and what is known as specific to the milestone events is not disclosed. So we would really never be in a position at this point in the process to give that level of specificity around what might trigger a milestone payment and what it might be.

What we have disclosed, however, because we understand it's important for investors and people interested in the company to understand, is what, in aggregate, the milestones, both clinical and commercial, might look like. I have to admit, I don't have it right in front of me, but we did disclose for that program. It's -- I can look it up quickly. I think it's under...

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Lisa Walters-Hoffert, Daré Bioscience, Inc. - CFO [39]

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It's about $14 million -- I think it's about $14 million.

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Sabrina Martucci Johnson, Daré Bioscience, Inc. - President, CEO, Secretary & Director [40]

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Yes, it's about...

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Lisa Walters-Hoffert, Daré Bioscience, Inc. - CFO [41]

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It's Lisa. Sorry, I'm going to jump in here. About $14 million when you try -- and we try to break this down between kind of clinical, regulatory and commercial. You lump them all together, and it gets to be

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Sabrina Martucci Johnson, Daré Bioscience, Inc. - President, CEO, Secretary & Director [42]

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Made for people.

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Lisa Walters-Hoffert, Daré Bioscience, Inc. - CFO [43]

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Yes, for all of us.

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Sabrina Martucci Johnson, Daré Bioscience, Inc. - President, CEO, Secretary & Director [44]

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Yes. So it's about $14 million to $15 million clinical range. And that's -- again, for competitive reasons, that's the only disclosure we've given.

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Operator [45]

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Our last question comes from the line of Nathan Weinstein with Aegis Capital.

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Nathan S. Weinstein, Aegis Capital Corporation, Research Division - Analyst [46]

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And there were definitely some good questions asked before. And so actually, what I was hoping to ask was on a macro level, looking at the women's health market. In terms of the investment activity you've seen, how the market in general is growing. And then in particular, on whether over time you guys have seen greater interest from ESG-focused investment funds in the space.

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Sabrina Martucci Johnson, Daré Bioscience, Inc. - President, CEO, Secretary & Director [47]

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I'm not sure I understood the last part of the question.

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Nathan S. Weinstein, Aegis Capital Corporation, Research Division - Analyst [48]

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ESG.

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Sabrina Martucci Johnson, Daré Bioscience, Inc. - President, CEO, Secretary & Director [49]

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Can you repeat it, Nathan? I'm sorry to make you repeat it. But could you repeat it, repeat the question?

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Nathan S. Weinstein, Aegis Capital Corporation, Research Division - Analyst [50]

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Yes. Can you hear me now?

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Sabrina Martucci Johnson, Daré Bioscience, Inc. - President, CEO, Secretary & Director [51]

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Yes. Thank you. If you can repeat it, that would be awesome. Thank you.

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Nathan S. Weinstein, Aegis Capital Corporation, Research Division - Analyst [52]

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Yes. So the last part of the question was, over time, whether you've seen greater interest from ESG-focused investment funds and with you guys and in the space in general.

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Sabrina Martucci Johnson, Daré Bioscience, Inc. - President, CEO, Secretary & Director [53]

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And Nathan, define ESG, just to make sure we're thinking about this properly.

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Nathan S. Weinstein, Aegis Capital Corporation, Research Division - Analyst [54]

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So ESG would be environmental, social...

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Sabrina Martucci Johnson, Daré Bioscience, Inc. - President, CEO, Secretary & Director [55]

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Oh, we thought that's what you were referring to -- yes, yes. So it's interesting because as Daré as a company receives a little more visibility, and people understand kind of the impact of the work we're doing. That is a category of investors that is interested in treating trust. And in fact, I did go and attend the Social Capital Impact Investors Conference in San Francisco in September, SOCAP, which is really an interesting opportunity to get in front of investors that have that mandate.

It's interesting as we don't fit totally neatly into the buckets that they typically invest in because often it's environment or things like that, but they do have -- they had a health care sector representation at that conference. And it really was an interesting opportunity to understand the funds that are looking for things like this. And I think given our focus in women's health, and there are some other interesting aspects of Daré as a company that's often appealing to these kind of funds, which not only are women's health-focused, but female CEO, majority female Board as a publicly traded company. We tick some interesting boxes for funds that are looking for an investment that feels very good to them. So we're really pleased that we're starting to get some notice in those circles as well. So thanks for asking that question.

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Operator [56]

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This concludes today's question-and-answer session. I will now turn the call back over to Ms. Sabrina Martucci Johnson for closing remarks.

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Sabrina Martucci Johnson, Daré Bioscience, Inc. - President, CEO, Secretary & Director [57]

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Well, thank you, and I really want to appreciate everyone's time this afternoon, and particularly the really thoughtful questions that we got today because I think they're a great opportunity to -- for us, hopefully, to provide a little more clarity around our portfolio, our programs, our partnering opportunities, our strategies, our upcoming clinical and regulatory events, not only this year, but as we go into next year as well. And with that in mind, we are absolutely looking forward to keeping you updated on our progress. So thank you all.

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Operator [58]

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Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.