Dare Bioscience: Preparing For The Upcoming Phase 3 Results (NASDAQ:DARE)


Introduction

Dare Bioscience (DARE) is an interesting small biotech company, which develops new treatment methods for large markets, such as bacterial vaginosis, hormone-free contraceptive, and Female Sexual Arousal Disorder. However, despite the large potential market, it is still crucial to understand whether developed drugs are unique and could be able to compete in the marketplace. DARE-BV1 is the most developed drug of the company, which also received both Fast Track and Qualified Infectious Disease Product designations. Therefore, we wanted to investigate whether the upcoming pivotal Phase 3 results would be able to lift the share price by the end of 2020.

Bacterial vaginosis therapy

According to European (IUSTI/WHO) guideline on the management of vaginal discharge, 2011:

Bacterial vaginosis is the most common vaginal condition in women ages 15-44. The general population prevalence of BV is high globally, ranging from 23% to 29% across regions. In Caucasian women, the prevalence is 5-15%, and in black African and American women 45-55%. The prevalence is less well studied in Asian women, but in general, is around 20-30%.

It is characterized by an overgrowth of predominantly anaerobic organisms (e.g. Gardnerella vaginalis, Prevotella spp., Mycoplasma hominis, Mobiluncus spp.) in the vagina leading to a replacement of lactobacilli and an increase in vaginal pH.

Criteria for diagnosis BV include clinical symptoms (Amsel), Nugent score, and Hay-Ison criteria.

Indications for treatment of BV include:

  • Symptoms
  • Positive direct microscopy with/without symptoms in some pregnant women (those with a history of prior idiopathic preterm birth or second-trimester loss)
  • Women undergoing some surgical procedures
  • Optional: positive direct microscopy in women without symptoms. They may report a beneficial change in their discharge following treatment
  • Male partners do not require treatment

Figure 1. Recommended regimens for bacterial vaginosis.

It is commonly recognized that the existing therapeutic options for BV are inadequate because of low cure rates, high rates of recurrence, potentially severe systemic adverse effects, and, for some products, incompatibility with alcohol consumption or condoms.

Scientific aspects and Clinical results

DARE-BV1 is a novel thermosetting bioadhesive hydrogel containing clindamycin phosphate 2% designed for one-time administration for BV, a Fast Track and Qualified Infectious Disease Product-tagged indication.

This gel is designed to take advantage of body temperature to undergo a sol-to-gel transition that can be utilized in several different states, for example, as a liquid (viscous or dilute) or a semisolid (gel/paste). The gel also possesses bioadhesive properties, erodes slowly, and releases the drug over several days. All these properties should increase the duration of action and potentially improve the effectiveness of clindamycin relative to existing vaginal products.

Figure 2. The clinical result of DARE-BV1

In a proof of concept study which enrolled 30 women to access the safety and efficacy of DARE-BV1 to treat BV after a single administration, it was reported that a single dose of DARE-BV1 showed a meaningful clinical cure rate of 86% in evaluable patients at the test-of-cure visit. 96% of those women remained clinically cured at the follow-up visit 21 to 30 days after dosing. There were no reports of adverse reactions to DARE-BV1 throughout the study. A phase 3 clinical trial of DARE-BV1 started in June 2020 and was estimated to complete in December 2020. This is a multicenter, randomized, double-blind, placebo-controlled study of DARE-BV1 (clindamycin phosphate vaginal gel, 2%) (QD x 1 day) compared to placebo vaginal gel (HEC Universal Placebo Gel) (QD × 1 day) for the treatment of BV.

Competition

Table 1. Summary of competitors

Name of Drug (Company)

Pros

Cons

DARE-BV1 (Darebioscience)

  • Novel technology in drug delivery
  • Single-dose, convenient for physicians and patients
  • The vaginal application might have fewer side-effects than oral application.
  • Highest cure rate (86%)
  • Not the first single-dose therapy for BV in the market
  • Diminish the effectiveness of condoms
  • No clinical studies conducted
  • Cure rate only recorded in a proof of concept study with a small sample size

Clindesse (Perrigo Pharma)

  • First FDA-approved single-dose therapy for BV, convenient for physicians and patients
  • The vaginal application might have fewer side-effects than oral application.
  • Efficacy proven by clinical studies
  • Recommended in the guideline of IUSTI/WHO
  • Medium cure rate (41-64%)
  • Diminish the effectiveness of condoms

Metronidazole gel 1.3%

  • The vaginal application might have fewer side-effects than oral application.
  • Low cure rate (37%)
  • Tended to have more adverse effects than clindamycin products
  • Not recommended in the guideline of IUSTI/WHO
  • Incompatibility with alcohol consumption

Metronidazole gel 0.75%

  • The vaginal application might have fewer side-effects than oral application.
  • High cure rate (75%)
  • Recommended in the guideline of IUSTI/WHO
  • Tended to have more adverse effects than clindamycin products
  • Incompatibility with alcohol consumption

Solosec – secnidazole 2g oral granules (Lupin Pharmaceuticals)

  • First oral single-dose treatment for BV
  • Convenient administration
  • Medium cure rate (53-68%)
  • Not recommended in the guideline of IUSTI/WHO

Market potential

Due to the recent high curing rate of 86%, DARE-BV1 received both Fast Track and Qualified Infectious Disease Product designations, showing that the drug might be a new alternative to an old problem. However, Dare Bioscience must first show good results in a larger trial to prove its superiority.

With the results expected by the end of 2020 and with Fast Track designation, DARE-BV1 is expected to hit the market by 2021 should it receive the FDA approval. For initial modeling purposes, we think a $ 150 million sales peak is a reasonable starting point comparing to recent sale numbers of Solosec. To evaluate possible upsides for the company, we estimate the peak sales of DARE-BV1 in 3 scenarios as follow:

Scenario

Low

Mid

High

Expected peak sales ($, million)

75

112.5

150

Then, using this model, we estimate the company’s revenues in the upcoming years:

Year

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

Percentage of peak sales (%)

5

20

35

50

65

75

85

90

95

99

100

Expected peak sales ($, million)

Low

3.75

15

26.25

37.5

48.75

56.25

63.75

67.5

71.25

74.25

75

Mid

5.63

23

39.38

56.25

73.13

84.38

95.63

101.25

106.88

111.38

113

High

8

30

53

75

98

113

128

135

143

149

150

Sales margin 65% ($, million)

Low

2.44

9.75

17.06

24.38

31.69

36.56

41.44

43.88

46.31

48.26

48.75

Mid

3.66

14.63

25.59

36.56

47.53

54.84

62.16

65.81

69.47

72.39

73.13

High

4.88

20

34.13

48.75

63.38

73.13

82.88

87.75

92.63

96.53

97.50

From that, we can calculate the NPV of the drug in each scenario:

Scenario

Low

Mid

High

Drug net present value (11% discount rate) ($, million)

166.56

249.84

333.12

Compared to the current market capitalization of $35.02 million, the NPVs show huge upside potential even in the case of low peak sales.

Nevertheless, it is also noteworthy that the company is currently holding just $5.35 million in cash, while its debt to equity ratio over 308%. It is very likely that Dare will soon have to raise additional money to continue its operation.

Risks

It is not clear whether the drug will reproduce its superior results in the upcoming late-stage trial. The active ingredient and the mechanism are not necessarily new or unique. Furthermore, the company has not revealed its go-to-market strategy. Despite its development stage of DARE-BV1, the company still has not announced any strategic partner or licensee for this asset. Should it succeed in entering the market in 2021, the next challenge would be to compete with other competitors, which would be relatively difficult without synergies. In contrast, its hormone-free contraceptive Ovaprene, which is in an earlier development stage, was already licensed by Bayer.

Conclusion

DARE-BV1 is a novel thermosetting bioadhesive hydrogel containing clindamycin phosphate 2% designed for one-time administration for bacterial vaginosis, the most common vaginal condition in women. Its high efficacy was only recorded in a proof of concept study while the clinical phase 3 trial is still on the process. It is commonly recognized that the existing therapeutic options for BV are inadequate, however, DARE-BV1 does not seem to be a strong candidate with the sharp competition from Clindesse, Solosec, and Metronidazole gel. Nevertheless, its current low market capitalization still shows that there is room for improvement in the company’s valuation in the future.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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