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Item 1. Business

2023-03-30 compared with 2022-03-31 · 475 added, 402 removed, 832 unchanged (51% of the section changed)

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We are a biopharmaceutical company committed to advancing innovative products for women’s health.

We are driven by a mission to identify, develop and bring to market a diverse portfolio of differentiated therapies that prioritize women's health and well-being, expand treatment options, and improve outcomes, primarily in the areas of contraception, fertility and vaginal and sexual health.

Our first product, XACIATO™ (clindamycin phosphate vaginal gel, 2%), was approved by the FDA in December 2021 for the treatment of bacterial vaginosis in females 12 years of age and older.

In March 2022, we entered into an exclusive global license agreement with an affiliate of Organon & Co., Organon International GmbH, or Organon, to commercialize XACIATO.

XACIATO is expected to be available commercially in the United States in the fourth quarter of 2022.

Our first product, XACIATO [zah-she-AH-toe] (clindamycin phosphate) vaginal gel, 2%, was approved by the FDA in December 2021 as a single-dose prescription medication for the treatment of bacterial vaginosis in female patients 12 years of age and older.

In March 2022, we entered into an exclusive global license agreement with an affiliate of Organon & Co., Organon International GmbH, or Organon, to commercialize XACIATO, which became fully effective in June 2022.

Accordingly, our potential future revenue from the commercialization of XACIATO will consist of royalties based on net sales and milestone payments from Organon as discussed below.

We anticipate the first commercial sale of XACIATO in the U.S.

to occur in the first half of 2023.

We began assembling our diverse portfolio of clinical-stage product candidates and pre-clinical programs in 2017 through acquisitions, exclusive in-licenses and other collaborations.

Our programs target unmet needs in women’s health in the areas of contraception, fertility and vaginal and sexual health and aim to expand treatment options, enhance outcomes and improve ease of use for women.

We are primarily focused on progressing the development of our existing product candidates.

We are also exploring opportunities to expand our portfolio by leveraging assets to which we hold rights or obtaining rights to new assets, with continued focus solely on women's health.

Our programs target unmet needs in women's health in the areas of contraception, vaginal health, reproductive health, menopause, sexual health and fertility and aim to expand treatment options, enhance outcomes and improve ease of use for women.

While we are currently focused on progressing the development of our existing product candidates, we continue to explore opportunities to expand our portfolio in women's health by leveraging assets to which we hold rights or by obtaining rights to new assets.

We believe the product candidates in our portfolio offer innovative approaches that may provide meaningful benefits over current therapeutic or contraceptive options.

We evaluate potential new product candidates based on similar selection criteria as we applied in assembling our existing portfolio.

Our product candidates, if approved for commercial sale, would be prescription products.

Our product candidates, if approved for commercial sale, would be physician prescribed products.

The following graphic summarizes our portfolio, including targeted indications, development status and milestones:

Our goal is to bring to market innovative products in women’s health, primarily in the areas of contraception, fertility and vaginal and sexual health.

Our goal is to bring to market innovative products that address persistent unmet needs in women’s health, primarily in the areas of contraception, vaginal health, reproductive health, menopause, sexual health and fertility - areas in women's health that we believe represent compelling and meaningful market opportunities for products that enhance outcomes and convenience.

We plan to achieve this goal by advancing the drug and drug/device combination product candidates in our portfolio through mid- to late-stage clinical development, and potentially regulatory approval, as well as by establishing and leveraging strategic partnerships and other collaborations to complete product development and commercialize our products, if approved.

We are also exploring portfolio expansion through both business development activities that may result in acquiring, or acquiring access to, new product candidates through in-licensing or other collaborative arrangements, and leveraging assets we previously acquired or in-licensed from third parties.

As with our current portfolio, we look for innovations in women’s health that have (a) attractive market opportunities and potential to address an unmet medical need, including through new formulations, manners of application or delivery methods of well-known drug substances that result in novel, product candidates customized for women, (b) human proof-of-concept clinical data previously generated by third parties and/or potential to utilize the FDA's 505(b)(2) pathway, and (c) potential to become a first-in-category or first-line product.

We believe that there is an opportunity to fill the gap that exists in the development of innovations in women’s health between (a) non-profit organizations, small private companies and individual entrepreneurs that discover, innovate and conduct early-stage research and clinical development of product candidates, and (b) pharmaceutical companies that conduct late-stage clinical development and commercialize approved products.

We believe that the development activities between these two ends of this spectrum (early pre-clinical and clinical development of product candidates on the one hand and late-stage clinical trials and commercialization of product candidates on the other) are currently underserved.

In addition, we believe there are gaps in treatment options in the women's health market and there is an opportunity to provide therapies that address persistent unmet needs.

We intend to fill the mid-stage development gap and to expand treatment options for women.

We are also exploring opportunities to expand our portfolio through both business development activities that may result in acquiring, or acquiring access to, new product candidates through in-licensing or other collaborative arrangements, and leveraging platform technology assets we previously acquired or in-licensed from third parties that can be modified with different active pharmaceutical ingredients to address multiple indications.

As with our current portfolio, we seek innovations in women’s health that have (a) attractive market opportunities with the potential to address an unmet medical need, including through new formulations, manners of application or delivery methods of well-known drug substances that result in novel, product candidates customized for women, (b) human proof-of-concept clinical data previously generated by third parties and/or potential to utilize the FDA's 505(b)(2) pathway, and (c) potential to become a first-in-category or first-line product.

Key elements of our business strategy are as follows:

• Advance clinical development of the product candidates in our portfolio through mid- to late-stage clinical development or regulatory approval .

We are targeting a 2022 commencement of a pivotal Phase 3 clinical study of Ovaprene in collaboration with the Eunice Kennedy Shriver National Institute of Child Health and Human Development, or NICHD.

In addition, our Phase 2b RESPOND clinical study of Sildenafil Cream, 3.6% in women with female sexual arousal disorder, or FSAD, is ongoing.

In 2022, we also expect to complete our ongoing Phase 1/2 clinical study of DARE-VVA1 and we are commencing a Phase 1/2 clinical study of DARE-HRT1.

• Explore opportunities to expand our portfolio, with the women’s health market as our sole focus .

While simultaneously advancing our current portfolio, we intend to continue to identify other important unmet needs in women’s health and explore opportunities to build our product pipeline by acquiring or in-licensing new programs or leveraging assets we previously acquired or in-licensed to create new programs that meet our selection criteria.

• Pursue strategic collaborations to enhance our development and commercialization capabilities .

We intend to develop and maintain strategic relationships with commercial stage companies that are leaders or emerging leaders in the women’s health market, as well as with other entities, where we believe such collaborations will accelerate or otherwise improve upon our clinical development and/or product commercialization capabilities.

Our license agreement with Bayer to commercialize Ovaprene, if approved, and our Cooperative Research and Development Agreement, or CRADA, with NICHD for the conduct of the Phase 3 clinical study of Ovaprene are examples of these efforts.

• Seek non-dilutive funding to support product development.

In 2022, we continued to make important progress in the clinical development of our product candidates, including with (i) the completion of, and positive topline results from, Phase 1/2 studies for DARE-HRT1 and for DARE-VVA1, both of which were conducted by our wholly owned subsidiary in Australia;

(ii) the completion of subject screening for our exploratory Phase 2b RESPOND study of Sildenafil Cream, 3.6%;

and (iii) preparations for a pivotal Phase 3 study of Ovaprene.

In 2023, we plan to build upon that progress, including through the (A) expected announcement of topline results from the exploratory Phase 2b RESPOND study of Sildenafil Cream, 3.6%, (B) commencement of the pivotal Phase 3 study of Ovaprene, (C) preparations for a Phase 3 study of DARE-HRT1, and (D) completion of the Phase 1 study of DARE-PDM1.

• Explore opportunities to expand our portfolio, with women’s health as our sole focus .

While simultaneously advancing our current portfolio, we intend to continue to identify other important areas of unmet need in women’s health and to explore opportunities to build our product pipeline by acquiring or in-licensing new programs or leveraging assets we previously acquired or in-licensed to create new programs that meet our selection criteria.

In 2022, we announced three new development programs, DARE-PDM1, DARE-GML and DARE-LBT, which are discussed in more detail below.

• Pursue strategic collaborations to fund our business and/or enhance our development and commercialization capabilities .

We intend to develop and maintain strategic relationships with commercial-stage companies that are leaders or emerging leaders in women’s health, as well as with other entities, where we believe such collaborations will help fund our business or accelerate or otherwise improve upon our clinical development and regulatory strengths and/or product manufacturing and commercialization capabilities.

Examples of our efforts to date include our license agreement with Organon to commercialize XACIATO, our license agreement with Bayer to commercialize Ovaprene, if approved and the license becomes effective, and our Cooperative Research and Development Agreement, or CRADA, with the Eunice Kennedy Shriver National Institute of Child Health and Human Development, or NICHD, for the conduct of the Phase 3 clinical study of Ovaprene.

• Seek non-dilutive sources of funding to support product development.

We intend to advance development of our programs through a variety of means, including through non-dilutive funding.

For example, technology development and other preclinical activities for DARE-LARC1 have been supported by funding under grant agreements with a private foundation and we anticipate that our 2021 grant agreement will continue to fund pre-clinical activities for that program through most of 2026, contingent upon the program's achievement of specified milestones.

In addition, clinical development of Ovaprene and pre-clinical development activities for DARE-LARC1 and DARE-PTB1 have been supported by NICHD grant awards.

XACIATO [zah-she-AH-toe] (clindamycin phosphate) vaginal gel (formerly known as DARE-BV1), a lincosamide antibacterial, received FDA approval in December 2021 for the treatment of bacterial vaginosis in female patients 12 years of age and older.

XACIATO is a clear, colorless, viscous gel, which contains clindamycin at a concentration of 2%.

A single-dose user-filled disposable applicator delivers 5 g of vaginal gel containing 100 mg of clindamycin.

To date, we have received non-dilutive funding to support various aspects of development of Ovaprene, DARE-LARC1, DARE-204/214, DARE-PTB1 and DARE-LBT1.

We intend to continue to explore grants and other forms of non-dilutive funding to support development of our product candidates.

XACIATO (clindamycin phosphate) vaginal gel (formerly known as DARE-BV1), a lincosamide antibacterial, received FDA approval in December 2021 for the treatment of bacterial vaginosis in female patients 12 years of age and older.

XACIATO is a clear, colorless, viscous gel, which contains clindamycin at a concentration of 2%, to be administered once intravaginally as a single dose.

XACIATO is our first and only approved product.

We achieved FDA approval of XACIATO three years after acquiring rights to the program.

We commenced and completed a successful pivotal clinical study, prepared and filed a new drug application with the FDA and received notification from the FDA of U.S.

We commenced and completed a successful pivotal clinical study, prepared and filed a new drug application, or NDA, with the FDA and received notification from the FDA of U.S.

marketing approval, all during the COVID-19 pandemic.

In March 2022, we entered into an exclusive license agreement with Organon pursuant to which Organon will obtain exclusive worldwide rights to develop, manufacture and commercialize XACIATO.

XACIATO is expected to be available commercially in the United States in the fourth quarter of 2022.

In March 2022, we entered into an agreement with Organon which became fully effective in June 2022, whereby Organon licensed exclusive worldwide rights to develop, manufacture and commercialize XACIATO.

Accordingly, our potential future revenue from the commercialization of XACIATO will consist of royalties based on net sales and milestone payments from Organon.

See "Strategic Agreements for Product Commercialization" below for further discussion of the terms of our agreement with Organon.

Organon has publicly announced that it aims to launch XACIATO in the United States in the first half of 2023 and plans to assess opportunities and potentially seek further marketing authorizations for countries outside the United States.

Under the terms of our agreement with Organon, we will remain the NDA holder of XACIATO for an interim period.

Upon Organon's request, we will assist with the transfer of the NDA by the FDA and the transfer of manufacturing responsibilities to Organon.

As the NDA holder, we will continue to be responsible for regulatory and compliance matters following commercial launch, though Organon is responsible for commercializing, promoting, determining pricing, and negotiating reimbursement matters related to XACIATO.

See "Sales and Marketing" below for further discussion of manufacturing for XACIATO and "Government Regulation—U.S.

Government Regulation" below for discussion of applicable laws and compliance requirements.

XACIATO previously received both Qualified Infectious Disease Product (QIDP) and Fast Track designations from the FDA for the treatment of bacterial vaginosis in women.

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available to the product based on the submission of new clinical data that were essential to its approval.

The FDA granted XACIATO for the treatment of bacterial vaginosis in female patients 12 years of age and older three years of data exclusivity, which was extended by five years, such that the data exclusivity period is set to expire on December 7, 2029.

XACIATO has also been designated as a reference listed drug by the FDA for purposes of future generic drug development.

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Government Regulation- New Drug Marketing Exclusivity under the Hatch-Waxman Act Amendments & GAIN Exclusivity Extension" below.

According to the Centers for Disease Control and Prevention, or the CDC, bacterial vaginosis is the most common vaginal condition in women ages 15-44.

Bacterial vaginosis is a type of vaginal inflammation caused by the overgrowth of certain bacteria naturally found in the vagina.

Symptoms include vaginal discharge, vaginal odor, vaginal pain, itching or burning, and burning during urination.

We entered this therapeutic category because we felt there was a significant unmet need for better treatment.

Branded prescription products that received FDA approval before XACIATO for the treatment of bacterial vaginosis have clinical cure rates (based on the Amsel criteria) ranging from 37-68%.

XACIATO is contraindicated in individuals with a history of hypersensitivity to clindamycin or lincomycin.

Its prescribing information contains warnings and precautions about clostridioides difficile -associated diarrhea, XACIATO’s incompatibility with and potential to weaken polyurethane condoms so as to make them unreliable for preventing pregnancy or protecting against sexually transmitted diseases (therefore, polyurethane condoms should not be used during treatment with XACIATO or for 7 days following treatment;

latex or polyisoprene condoms should be used), and vaginal candida infections.

The most common adverse reactions reported in >2% of patients and at a higher rate in the XACIATO group than in the placebo group in the pivotal DARE-BVFREE trial were vulvovaginal candidiasis and vulvovaginal discomfort.

Systemic clindamycin has neuromuscular blocking properties that may enhance the action of other neuromuscular blocking agents.

It should be used with caution in patients receiving such agents.

Other clindamycin vaginal products have been used to treat pregnant women during the second and third trimester.

XACIATO has not been studied in pregnant women.

However, based on the low systemic absorption of XACIATO following the intravaginal route of administration in nonpregnant women, maternal use is not likely to result in significant fetal exposure to the drug.

Similarly, because systemic absorption following intravaginal administration of clindamycin is low, transfer of the drug into breastmilk is likely to be low and adverse effects on the breastfed infant are not expected.

The safety and effectiveness of XACIATO have not been established in pediatric patients younger than 12 years of age.

XACIATO has not been evaluated in geriatric patients (65 years of age or older) to determine whether they respond differently than younger patients.

Clinical Data

The efficacy of XACIATO as a treatment of bacterial vaginosis in females 12 years of age and older was demonstrated in the Phase 3 DARE-BVFREE trial (NCT04370548), a randomized, double-blind, placebo-controlled clinical study that randomized 307 patients at 32 centers across the United States.

A single dose of XACIATO was compared to a single dose of placebo vaginal gel (hydroxyethylcellulose [HEC] Universal Placebo Gel) for the treatment of bacterial vaginosis.

Patients were evaluated at three timepoints:

a Day 1 screening/randomization visit, a Day 7 to 14 Interim Assessment visit, and a Day 21 to 30 Test of Cure visit.

The total study duration was up to approximately one month for each individual patient.

To be eligible, patients had to have a clinical diagnosis of bacterial vaginosis defined as an off-white (milky or gray), thin, homogeneous discharge with minimal or absent pruritus and inflammation of the vulva and vagina, clue cells > 20% of the total epithelial cells on microscopic examination of the saline wet mount, vaginal secretion pH of > 4.5, and a fishy odor of the vaginal discharge with the addition of a drop of 10% KOH (i.e., a positive whiff test).

The 307 patients were randomized in a 2:1 ratio, with 204 in the XACIATO group and 103 in the placebo group.

The modified Intent-To-Treat (mITT) Population excluded women with a positive test result for other concomitant vaginal or cervical infections at baseline, including a positive vaginal culture for Candida spp.

or who had a baseline Nugent score of < 7.

Clinical Cure was defined as resolution of the abnormal vaginal discharge associated with bacterial vaginosis, a negative 10% KOH whiff test, and clue cells < 20% of the total epithelial cells in the saline wet mount.

Bacteriological Cure was defined as a Nugent score < 4.

Therapeutic Cure was defined as the presence of both a Clinical Cure and Bacteriological Cure.

In the mITT population, a statistically significantly greater percentage of patients experienced Clinical Cure, Bacteriological Cure, and Therapeutic Cure at the Test of Cure (Day 21-30) visit in the XACIATO arm compared to placebo (Table 1).

Statistically significant results for the endpoints were also achieved at the Interim Assessment visit (Day 7-14).

Summary of Clinical Cure, Bacteriological Cure, and Therapeutic Cure (mITT Population)

Interim Assessment visit (day 7-14) Test of Cure visit (day 21-30)

Parameter XACIATO

n (%) Placebo

n (%) Treatment Difference (%) [95% Confidence Interval] XACIATO

n (%) Placebo

n (%) Treatment Difference (%) [95% Confidence Interval]

Cure 93 (76.2) 14 (23.7) 52.5 (38.0, 67.0) 86 (70.5) 21 (35.6) 34.9 (19.0, 50.8)

Bacteriological Cure 50 (41.0) 2 (3.4) 37.6 (26.5, 48.7) 53 (43.4) 3 (5.1) 38.4 (26.7, 50.1)

Cure 43 (35.2) 0 32.5 (25.5, 45.0) 45 (36.9) 3 (5.1) 31.8 (20.3, 43.3)

The percentage of patients with Clinical Cure at the Test of Cure visit was also significantly higher in the XACIATO group compared to the placebo group among the subsets of patients defined by prior episodes of bacterial vaginosis (≤ 3 episodes and >3 episodes in the previous 12 months) at 71.3% (72/101) for XACIATO and 39.1% (18/46) placebo, and 70.0% (14/20) for XACIATO and 23.1% (3/13) placebo, respectively.

The median age of the patients in the trial was 35 years (range 15-59 years).

The population was 56% Black or African American and 41% White.

Persons of Hispanic or Latino ethnicity made up 25% of the population.

A history of prior bacterial vaginosis was noted in 89% of the population.

XACIATO was well-tolerated in the trial.

Additionally, see the discussion of patents and patent applications related to XACIATO under "Intellectual Property—Patents" below.

Our Pipeline:

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an effective, short-acting, hormone-free method of contraception that does not require intervention at the time of intercourse.

efficacy approaching that of current FDA-approved non-implanted hormonal contraceptive methods (pills, patches and vaginal rings), which is approximately 91% typical use efficacy.

Ovaprene is a novel, investigational hormone-free monthly intravaginal contraceptive designed to be worn conveniently over multiple weeks (one menstrual cycle) and with the potential to achieve “typical use” contraceptive efficacy approaching that of current FDA-approved non-implanted hormonal contraceptive methods (pills, patches and vaginal rings), which is approximately 91% typical use efficacy.

Typical use contraceptive efficacy refers to the expected rate of pregnancy prevention during the first year of actual use of a method, including sometimes using the method in a way that is not correct or not consistent.

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PCT clinical trials have been used as a surrogate marker for contraceptive effectiveness.

Infertility research suggests that higher rates of pregnancy are associated with PMS per HPF of from greater than one to greater than 20 sperm, and less than five PMS per HPF is considered indicative of contraceptive effectiveness.

Infertility research suggests that higher rates of pregnancy are associated with PMS per HPF of from greater than one to greater than 20 PMS, and less than five PMS per HPF is considered indicative of contraceptive effectiveness.

Pivotal Phase 3 Clinical Study

In January 2022, we initiated an Investigational Device Exemption, or IDE, review process with the FDA for a multi-center, non-comparative, pivotal Phase 3 clinical study of the safety and efficacy of Ovaprene to prevent pregnancy.

Our IDE submission was subsequently converted to an IDE pre-submission so that the FDA could engage in a collaborative discussion with us regarding items that must be addressed prior to enrollment of any subjects in the Phase 3 study.

This process is ongoing and we believe it will allow us to finalize the protocol and design of the study as the registration study to support a future PMA submission.

Based on communications with the FDA, in terms of study sample size and duration, we expect that at least 200 subjects completing 12 months of Ovaprene use will be adequate.

We are targeting commencement of the Phase 3 study during 2022.

In July 2021, we entered into the CRADA with the U.S.

Department of Health and Human Services, as represented by NICHD, part of the National Institutes of Health, for the conduct of the Phase 3 study, which will be conducted within NICHD’s Contraceptive Clinical Trial Network with NICHD contractor Health Decisions Inc., a

contract research organization, providing clinical coordination and data collection and management services.

In October 2022, we announced that the FDA approved an Investigational Device Exemption, or IDE, application allowing us to conduct a single arm, open-label pivotal contraceptive efficacy study of Ovaprene.

The multi-center, non-comparative pivotal Phase 3 clinical study will evaluate Ovaprene’s effectiveness as a contraceptive device along with its safety and usability over a 12-month (13 menstrual cycles) duration.

We are targeting approximately 200 to 250 subjects to complete the study, and because contraceptive efficacy studies tend to have high drop-out rates, the study will enroll significantly more women in order to achieve the targeted number for completion.

If successful, the study is expected to support a PMA application to the FDA, as well as regulatory filings in Europe and other countries worldwide, to allow for marketing approvals of Ovaprene.

Initiation of recruitment for the study is targeted for mid-2023.

There is no predicate device for Ovaprene (i.e., there is no existing FDA-approved product that the FDA can use to compare with Ovaprene).

As such, Ovaprene will be reviewed via a PMA and not a 510(k) premarket submission.

While the regulatory process for such a novel product can require more interactions and research to support FDA approval, the benefit is a clearly differentiated product.

In order for the planned Phase 3 study to serve as the primary clinical support for a future marketing approval or clearance, the FDA provided additional study design considerations with the IDE approval letter.

We have been working with our collaborators at the National Institutes of Health, or NIH, and at Bayer to review and implement the FDA's study design considerations, which we believe will further position the study to collect safety and effectiveness data to enable the preparation of, and to support the submission of, a PMA application for Ovaprene.

In 2021, we entered into a CRADA, with the U.S.

Department of Health and Human Services, as represented by NICHD, part of the NIH, for the conduct of the Phase 3 study, which will be conducted within NICHD’s

Contraceptive Clinical Trial Network.

We and NICHD will each provide medical oversight and final data review and analysis for the study and will work together to prepare the final report of the results of the study.

We are responsible for providing clinical supplies of Ovaprene, coordinating interactions with the FDA, preparing and submitting supportive regulatory documentation, and providing a total of $5.5 million in payments to NICHD to be applied toward the costs of conducting the Phase 3 study.

NICHD will be responsible for the other costs related to the conduct of the Phase 3 study and will manage the payment of expenses to Health Decisions Inc., the clinical sites, and other parties involved with the study.

If the planned Phase 3 study is successful, we expect the data to support a pre-market approval submission, or PMA, to the FDA, as well as regulatory filings in Europe and other countries worldwide, to allow for marketing approvals of Ovaprene.

In addition to the CRADA, we are collaborating with ADVA-Tec, Inc.

and Bayer HealthCare LLC, or Bayer, for the development and commercialization of Ovaprene as part of two strategic collaborations announced in March 2017 and January 2020, respectively.

We are responsible for providing clinical supplies of Ovaprene, coordinating interactions with the FDA, preparing and submitting supportive regulatory documentation, and providing a total of $5.5 million to NICHD to be applied toward the costs of conducting the Phase 3 study, $5.0 million of which has been paid and the remaining amount is due in the second quarter of 2023.

NICHD will be responsible for the other costs related to the conduct of the Phase 3 study and will manage the payment of expenses to the contract research organization for the study, the clinical sites, and other parties involved with the study.

In addition to the CRADA, we are collaborating with ADVA-Tec, Inc., or ADVA-Tec, and Bayer HealthCare LLC, or Bayer, for the development and commercialization of Ovaprene as part of two strategic collaborations announced in March 2017 and January 2020, respectively.

See "Strategic Agreements for Pipeline Development" and "Strategic Agreements for Product Commercialization" below for discussion of the terms of e ach collaboration.

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While numerous pharmaceutical products have been developed and approved to treat erectile dysfunction in men, women continue to lack effective options for female sexual arousal disorder, or FSAD, the most analogous condition of the various types of female sexual dysfunction disorders.

We are developing Sildenafil Cream, 3.6%, an investigational proprietary cream formulation of sildenafil, a phosphodiesterase-5 inhibitor and the active ingredient in the male erectile dysfunction drug Viagra®, for topical administration to the vulva and vagina for treatment of FSAD.

Today, there are no FDA-approved products that specifically address the symptoms or underlying pathology of FSAD.

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FSAD is a condition characterized primarily by a persistent or recurrent inability to attain or maintain sufficient genital arousal (an adequate lubrication-swelling response) during sexual activity, frequently resulting in distress or interpersonal difficulty.

This is distinct from hypoactive sexual desire disorder (HSDD) in women, which is characterized primarily by a lack of sexual desire.

This is distinct from hypoactive sexual desire disorder (HSDD) in women, which is characterized primarily by a lack of sexual desire (also commonly referred to as low libido).

As with erectile dysfunction in men, FSAD in women is associated with insufficient blood flow to the genitalia.

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2 g cream with 71 mg sildenafil;

and 4 g cream with 142 mg sildenafil) in 20 healthy post-menopausal women using a crossover study design, topical sildenafil cream demonstrated significantly lower systemic exposure to sildenafil compared to a 50 mg oral sildenafil dose, and topical sildenafil cream was safe and well tolerated at clinically relevant doses (1-2 g cream).

and 4 g cream with 142 mg sildenafil) in 20 healthy postmenopausal women using a crossover study design, topical sildenafil cream demonstrated significantly lower systemic exposure to sildenafil compared to a 50 mg oral sildenafil dose, and topical sildenafil cream was safe and well tolerated at clinically relevant doses (1-2 g cream).

Study subjects reported favorable product characteristics:

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In a Phase 2a, single center, single-dose, double-blind, placebo-controlled, 2-way crossover study, women with FSAD, ages 21 to 60, received a single 2 g dose of Sildenafil Cream, 3.6%.

Of the 35 women enrolled, 31 (15 pre-menopausal and 16 post-menopausal) completed the study.

Of the 35 women enrolled, 31 (15 premenopausal and 16 postmenopausal) completed the study.

The primary objective was to evaluate the efficacy of Sildenafil Cream, 3.6% compared to placebo cream assessed by participant-reported levels of subjective cognitive sexual arousal and by physiological genital arousal response.

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The study, which was designed to evaluate up to 10 subjects, achieved the study objectives based on a planned interim analysis of the first six completed subjects, and thus additional subjects were not enrolled.

In this study, Sildenafil Cream, 3.6% demonstrated significantly greater increases in genital temperature compared to

placebo cream, indicating a positive impact on genital blood flow during the 30-minute post-dosing testing session, with statistical separation from placebo cream within the first 15 minutes after dosing.

In this study, Sildenafil Cream, 3.6% demonstrated significantly greater increases in genital temperature compared to placebo cream, indicating a positive impact on genital blood flow during the 30-minute post-dosing testing session,

with statistical separation from placebo cream within the first 15 minutes after dosing.

Additionally, significantly greater self-reported arousal responses were reported during Sildenafil Cream, 3.6% visits compared to placebo cream visits.

In 2019, as part of our Phase 2b clinical program for Sildenafil Cream, 3.6%, we completed a non-interventional study, or the content validity study, designed to identify and document the genital arousal symptoms that are most important and relevant to women with FSAD.

In 2019, as part of our exploratory Phase 2b clinical program for Sildenafil Cream, 3.6%, we completed a non-interventional study, or the content validity study, designed to identify and document the genital arousal symptoms that are most important and relevant to women with FSAD.

Participants who met the eligibility criteria participated in one-on-one, in-depth interviews conducted by subject matter experts in the field of clinical outcome assessments and female sexual medicine.

The findings of that study helped facilitate alignment with the FDA on acceptable efficacy endpoints in our Phase 2b clinical study and future Phase 3 program, including with respect to the patient reported outcome, or PRO, instruments to be used to screen eligible patients with FSAD and to measure achievement of the primary efficacy endpoint in the Phase 2b study.

Phase 2b RESPOND Clinical Study

In March 2021, we announced initiation of our Phase 2b RESPOND clinical study of Sildenafil Cream, 3.6% in women with FSAD.

During the Phase 2b RESPOND clinical study, subjects will use Sildenafil Cream, 3.6% and placebo cream in their home setting and will document genital arousal symptoms and distress using PRO instruments.

The findings of that study helped facilitate alignment with the FDA on acceptable efficacy endpoints in our exploratory Phase 2b clinical study and future Phase 3 program, including with respect to the patient reported outcome, or PRO, instruments to be used to screen eligible patients with FSAD and to measure achievement of the primary efficacy endpoint in the Phase 2b study.

Exploratory Phase 2b RESPOND Clinical Study

In 2021, we commenced our exploratory Phase 2b RESPOND clinical study of Sildenafil Cream, 3.6% in premenopausal patients with FSAD.

During the multi-center, double-blind, placebo-controlled study, subjects use Sildenafil Cream, 3.6% and placebo cream in their home setting and document genital arousal symptoms and distress using PRO instruments.

The primary efficacy endpoint of the study is a composite endpoint that includes patient-reported improvement in genital sensations of arousal and reduction in distress associated with FSAD.

The Phase 2b RESPOND clinical study is designed to evaluate Sildenafil Cream, 3.6% compared to placebo cream over 12 weeks of dosing following both a non-drug and placebo run-in period.

The study is expected to randomize 400 to 590 subjects into the double-blind dosing period at 40 to 50 clinical sites in the U.S.

to ensure a total of 300 (150:150) to 440 (220:220) subjects complete the 12-week double-blind dosing period.

The final size of the study will be determined by a single interim analysis for unblinded sample size re-estimation, based on the study’s adaptive design.

An adaptive design implemented in accordance with the FDA’s Guidance for Industry on adaptive designs for clinical trials of drugs mitigates the risk of the study being underpowered if the true treatment effect and variability are significantly different from estimates based on published data but are still clinically meaningful.

The pace of enrollment of participants in the trial has been slower than initially expected.

While the COVID-19 pandemic contributed in part to the slower pace of enrollment, we identified a number of other contributing factors, and we implemented mitigation strategies and adapted certain requirements to increase study subject recruitment.

We do not expect these changes to impact trial results.

We anticipate that the planned interim analysis will be conducted in 2022, after which we will be able to predict the timeframe for announcement of topline data from this trial.

We are developing Sildenafil Cream, 3.6% with Strategic Science & Technologies-D LLC under our license and collaboration agreement announced in February 2018.

The study is designed to evaluate Sildenafil Cream, 3.6% compared to placebo cream over 12 weeks of dosing following both a non-drug and placebo run-in period.

In November 2022, we announced the completion of subject screening.

A total of approximately 160 to 170 subjects (approximately 80 to 85 subjects per arm) are expected to complete the study's 12 week double blind dosing period for inclusion in the topline data assessment, targeted for the second quarter of 2023.

The study was originally expected to randomize a minimum of 400 subjects into the double-blind dosing period from 40 to 50 sites in the U.S.

to achieve 150 subjects per arm completing the 12-week double-blind dosing period.

In August 2022, we announced that, based on the results of an interim analysis to evaluate the relative magnitude of the treatment effect, we expected to complete enrollment in the study with the revised projected number of subjects.

The interim analysis was conducted by an independent third-party statistical resource and we, as well as our collaborator, Strategic Science & Technologies, LLC, continue to remain blinded to results of the study by treatment group.

The reduction in the number of subjects should not be viewed as indicative of the magnitude of the treatment effect and the relative magnitude of the treatment effect seen in the interim analysis should not be viewed as predictive that topline data will show Sildenafil Cream, 3.6% achieved the efficacy endpoints of the exploratory Phase 2b RESPOND study.

Because we have not identified comparable clinical studies for FSAD conducted by third parties to consider when designing our clinical trials of Sildenafil Cream, 3.6%, we designed the exploratory Phase 2b RESPOND study to provide important data for Sildenafil Cream, 3.6% intended to help us assess potential efficacy endpoints for our future Phase 3 clinical studies.

We are developing Sildenafil Cream, 3.6% with Strategic Science & Technologies-D LLC and Strategic Science & Technologies, LLC (which we refer to collectively as SST) under our license and collaboration agreement announced in February 2018.

See “Strategic Agreements for Pipeline Development” below for discussion of the terms of this collaboration.

DARE-HRT1 is a unique intravaginal ring, or IVR, designed to deliver bio-identical 17β-estradiol and bio-identical progesterone continuously over a 28-day period as part of a hormone therapy regimen to treat the vasomotor symptoms, or VMS, and genitourinary syndrome associated with menopause.

The IVR technology used in DARE-HRT1 was developed by Dr.

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Unlike other vaginal ring technologies, ours is designed to release drugs via a solid ethylene vinyl acetate polymer matrix without the need for a membrane or reservoir to contain the active drug or control the release, allowing for sustained drug delivery over time periods ranging from weeks to months.

Hormone therapy is considered the most effective treatment for vasomotor symptoms, commonly referred to as hot flashes, and the genitourinary syndrome of menopause, and it has been shown to prevent bone loss and fracture.

Following clinical development, we intend to leverage existing safety and efficacy data on estradiol and progesterone, the active ingredients in DARE-HRT1, to utilize the FDA's 505(b)(2) pathway to obtain marketing approval in the U.S.

Hormone therapy is considered the most effective treatment for vasomotor symptoms, or VMS, commonly referred to as hot flashes, and the genitourinary syndrome of menopause, and it has been shown to prevent bone loss and fracture.

Following clinical development, we intend to leverage the large body of existing safety and efficacy data on estradiol and progesterone, the active ingredients in DARE-HRT1, to utilize the FDA's 505(b)(2) pathway to obtain marketing approval in the U.S.

of DARE-HRT1 for the treatment of moderate to severe VMS due to menopause in women with intact uteri.

Based on pre-IND communications with the FDA and the topline pharmacokinetic, or PK, data from our Phase 1/2 clinical trial of DARE-HRT1, which is discussed below, we believe FDA approval of DARE-HRT1 for that indication is achievable via the FDA's 505(b)(2) pathway supported by a single, placebo-controlled Phase 3

clinical trial of DARE-HRT1 and a scientifically justified PK “bridge” (via a relative bioavailability trial) between DARE-HRT1 and the selected listed estradiol and progesterone drugs.

Ongoing activities to support progressing DARE-HRT1 directly into a single Phase 3 clinical study to support registration include manufacturing and non-clinical studies to support an investigational new drug, or IND, submission and the IND-opening Phase 3 study.

There are currently no FDA-approved IVRs that deliver bio-identical progesterone in combination with bio-identical estradiol.

As such, DARE-HRT1 has the potential to be a first-in-category product that offers monthly convenience for women.

As such, DARE-HRT1 has the potential to be a first-in-category product that offers monthly convenience for women, and non-oral concurrent dosing of bio-identical progesterone in combination with bio-identical estradiol.

Clinical Data

In June 2021, we announced positive topline results from our Phase 1 clinical trial of DARE-HRT1.

The randomized, open-label, three-arm, parallel group trial evaluated the pharmacokinetics, or PK, and safety of DARE-HRT1 in approximately 30 healthy, post-menopausal women with intact uteri, and was conducted by our wholly owned Australian subsidiary at specialty women's health sites in Australia.

The primary objective of the study was to describe the PK parameters of two different dose combinations (estradiol 80 µg/progesterone 4 mg IVR and estradiol 160 µg/progesterone 8 mg IVR) over 28 days.

Secondary endpoints of the study were to assess the safety and tolerability of DARE-HRT1 and compare the systemic exposure of estradiol, estrone, and progesterone of DARE-HRT1 over 28 days against a daily combination of oral estrogen (Estrofem®) and oral progesterone (Prometrium®).

Baseline-corrected steady state release level data from the study demonstrate that both the lower (IVR1) and higher (IVR2) dose versions of DARE-HRT1 successfully delivered the bio-identical estradiol and bio-identical progesterone over the 28-day evaluation period (Table 2).

Baseline-Corrected Steady State Levels of Estradiol and Progesterone

(Standard Deviation)

In January 2023, data from our Phase 1 clinical trial of DARE-HRT1 were published in Menopause:

The Journal of The North American Menopause Society in an article entitled, “Evaluation of 28-day estradiol and progesterone vaginal rings in a phase 1 clinical pharmacokinetic study.” We previously announced positive topline results from the study in June 2021.

The randomized, open-label, three-arm, parallel group trial evaluated the PK and safety of DARE-HRT1 in approximately 30 healthy, postmenopausal women with intact uteri, and was conducted by our wholly owned Australian subsidiary at two specialty women's health sites in Australia.

Women in the first arm received one IVR designed to release 17β-estradiol (E2) at a rate of 80 μg/d and progesterone (P4) at 4 mg/d, or the 80/4 IVR.

Women in the second arm received one IVR designed to release E2 at a rate of 160 μg/d and P4 at 8 mg/d, or the 160/8 IVR.

Women in the third arm received oral Estrofem® (1 mg E2) and oral Prometrium® (100 mg P4) both daily for 29 days.

The primary objective of the study was to describe the PK parameters of the 80/4 IVR and the 160/8 IVR.

Secondary endpoints of the study were to assess the safety and tolerability of the IVRs and compare the systemic exposure of E2, estrone, and P4 in the IVR groups with the oral group.

Blood samples were taken predose then intensively over the first day (Day 1) and periodically thereafter over the remaining 27 days.

After removal of the IVRs on the morning of Day 29, intensive samples were collected.

Similar procedures were conducted with women enrolled in the oral group.

The journal article concluded that the 80/4 IVR and the 160/8 IVR gave similar steady-state concentrations of E2 as seen with drug products approved by the FDA for treatment of VMS and genitourinary symptoms of menopause, and that the E2 concentrations of the study support the potential of DARE-HRT1 as a new option for hormone therapy for treatment of VMS and vaginal symptoms associated with menopause.

The IVRs were well tolerated, and no serious adverse events were reported.

DARE-HRT1 has also been evaluated in a Phase 1/2 clinical trial conducted by our wholly owned subsidiary in Australia.

We announced topline results from the Phase 1/2 study in January 2023 and October 2022, and we believe topline results from the study support continued clinical development of DARE-HRT1.

The randomized, open-label, two-arm, parallel group Phase 1/2 study of DARE-HRT1 was designed to evaluate the PK of the same two versions of DARE-HRT1 as were evaluated in our earlier Phase 1 clinical study, the 80/4 IVR and the 160/8 IVR, in approximately 20 healthy, postmenopausal women with intact uteri over approximately three consecutive months of use.

The study also collected safety, usability, acceptability and symptom-relief data, including VMS as well as the vaginal symptoms of menopause.

Topline data from the study demonstrate that DARE-HRT1 successfully delivered E2 and P4 over the 12-week evaluation period.

The baseline-corrected steady state release of E2 and P4 from both the 80/4 IVR and the 160/8 IVR demonstrated steady state release levels in month 3 of the 12-week study as shown in the table below:

Steady State C a vg (standard deviation)

DARE-HRT1 80/4 IVR (n=11)

Estradiol 20.6 (16.8) pg/mL

Progesterone 1.32 (0.20) ng/mL

Estradiol (E2)

22.17 (4.47) pg/mL

Progesterone (P4)

1.25 (0.34) ng/mL

DARE-HRT1 160/8 IVR (n=10)

Estradiol 32.5 (9.3) pg/mL

Progesterone 2.23 (0.61) ng/mL

The levels of estradiol released from each formulation of DARE-HRT1 evaluated in the study achieved or exceeded the levels that were targeted for hormone therapy.

Target levels of estradiol for hormone treatment for either the VMS or vaginal symptoms of menopause were established by reviewing PK levels published for FDA-approved products for both the treatment of VMS as well as the genitourinary symptoms of menopause.

Based on the estradiol PK data in the Phase 1 study, the results support further development of DARE-HRT1 as a potentially effective hormone therapy for both VMS and vaginal symptoms associated with menopause.

The levels of progesterone released from each version of DARE-HRT1 evaluated in the study met the objectives of releasing progesterone.

Estradiol (E2)

38.97 (10.79) pg/mL

Progesterone (P4)

1.80 (0.28) ng/mL

The levels of E2 released from both the 80/4 IVR and the 160/8 IVR achieved or exceeded the levels that were targeted for hormone therapy for either the VMS or vaginal symptoms of menopause based on PK levels published for FDA-approved products for both the treatment of VMS as well as the genitourinary symptoms of menopause.

Based on the E2 PK data in the Phase 1/2 study, the results support the potential of DARE-HRT1 as an effective hormone therapy for both VMS and vaginal symptoms associated with menopause.

The levels of P4 released from both the 80/4 IVR and the 160/8 IVR met the objectives of releasing P4.

Progesterone is used in hormone therapy to reduce the impact of estrogen on nontarget sites, such as the endometrium, to prevent estrogen-induced endometrial hyperplasia.

The study treatment was well tolerated with the most common adverse events consistent with other vaginal products.

There was only one early discontinuation due to an adverse event, which was found to be unrelated to study treatment or participation, and no serious adverse events were reported.

The proportion of participants reporting adverse events was similar across all dose groups, the two DARE-HRT1 groups as well as the group receiving a daily combination of FDA-approved oral estrogen and oral progesterone products, with 89% of adverse events mild in severity and all other adverse events (11%) rated as moderate.

DARE-HRT1 had a high level of acceptability in the study, with over 80% of subjects on the lower and higher dose versions of DARE-HRT1 reporting the IVR as comfortable or very comfortable.

Additionally, over 80% of subjects in each IVR dose group stated they were either somewhat or very likely to use the IVR for a women’s health condition or disease if needed.

Phase 1/2 Clinical Study

We are commencing a Phase 1/2 clinical study of DARE-HRT1 in Australia in the second quarter of 2022.

The open-label study will evaluate the PK of the lower and higher dose versions of DARE-HRT1 in approximately 20 healthy, post-menopausal women with intact uteri over approximately three consecutive months of use.

The study will also collect safety, usability, acceptability and symptom-relief data.

The levels of E2 released from both the 80/4 IVR and the 160/8 IVR achieved statistically significant improvement in VMS as well as the genitourinary symptoms of menopause, and vaginal pH and maturation index.

Menopausal symptoms, including hot flashes and night sweats, were reduced compared with baseline in both the 80/4 IVR and the 160/8 IVR groups (p<0.01).

Participants also showed significant improvement from baseline in all measures surveyed on The Menopausal Quality of Life Survey (MENQOL), which surveys not only parameters of VMS, but also physical, psychosocial and sexual symptoms (p<0.01 on all domains).

With DARE-HRT1 use, vaginal pH significantly decreased compared to baseline (p<0.01) and cytologic tests of the vaginal epithelium (vaginal maturation index) showed significant normalization (all p values <0.01 for increases in superficial cells, increases in intermediate cells and decreases in parabasal cells from baseline) among all participants.

The most common genitourinary symptom, vaginal dryness, which was reported by 70% of participants at baseline, showed significant improvement in both the 80/4 IVR and the 160/8 IVR groups (p<0.01), and this subset also experienced significant decreases in vaginal pain with DARE-HRT1 use (p<0.01).

Both IVRs were well tolerated with the types of most common adverse events consistent with other vaginal products.

There were two early discontinuations due to well known, hormonal related side effects.

No serious adverse events were reported.

DARE-HRT1 had a high level of acceptability in the study, with 100% of subjects reporting that the IVR was comfortable to wear, and there were no reports of the IVR being expelled from the vagina during use.

Additionally, over 95% of subjects stated they would be either somewhat or very likely to use the IVR for a women’s health condition or unrelated disease if needed.

We are developing DARE-HRT1 under our license agreement with Catalent JNP, Inc.

See “Strategic Agreements for Pipeline Development” below for discussion of the terms of that agreement.

DARE-VVA1 is a proprietary formulation of tamoxifen for vaginal administration.

We are developing DARE-VVA1 as an alternative to estrogen-based therapies for the treatment of moderate to severe vulvar and vaginal atrophy, or VVA , in women with or at risk for hormone-receptor positive (HR+) breast cancer, including women on anti-cancer therapy, to treat the symptoms of VVA.

DARE-VVA1 is a proprietary formulation of tamoxifen for intravaginal administration.

We are developing DARE-VVA1 as a hormone-free alternative to estrogen-based therapies for the treatment of moderate to severe vulvar and vaginal atrophy, or VVA.

Tamoxifen is a well-known and well-characterized selective estrogen receptor modulator, or SERM.

Tamoxifen has unique properties that produce different effects in different types of tissues.

In breast tissue, tamoxifen acts as an estrogen antagonist, meaning that it can inhibit estrogen's effect and hence why it may be effective in treating HR+ breast cancer.

However, in other tissue, including vaginal tissue, tamoxifen has been reported to exert an estrogen-like response.

Tamoxifen has unique properties that produce different effects (estrogen agonist or estrogen antagonist) in different types of tissues.

In breast tissue, tamoxifen acts as an estrogen antagonist, meaning that it can inhibit estrogen's effect and hence why it may be effective in treating hormone-receptor positive (HR+) breast cancer.

However, in other tissue, including vaginal tissue, tamoxifen has been reported to elicit an estrogen-like response.

This has the potential to have a favorable effect on vaginal cytology.

VVA is an inflammation of the vaginal epithelium due to the reduction in levels of circulating estrogen, which is characterized by pain during intercourse, vaginal dryness and irritation.

Commonly used therapies for VVA are estrogen-based and often contraindicated in HR+ breast cancer patients, or patients with a genetic predisposition or history of familial disease, because of the concern that estrogen use will promote recurrence or occurrence of disease.

Due to the prevalence of aromatase inhibitors for the treatment of HR+ breast cancer, the prevalence of VVA in post-menopausal breast cancer patients is estimated to be between 42 and 70 percent.

We intend to leverage the existing safety and efficacy data for tamoxifen to utilize the FDA’s 505(b)(2) pathway to obtain marketing approval of DARE-VVA1 in the U.S.

An exploratory study of vaginal administration of tamoxifen in four healthy postmenopausal women diagnosed with VVA published in Clinical and Experimental Obstetrics & Gynecology demonstrated that tamoxifen self-administered intravaginally for three months clinically benefited women with symptoms of VVA without significant systemic absorption of the study drug.

VVA is a common condition in postmenopausal women and women with, or with a history of, HR+ breast cancer who received anti-cancer therapy.

The prevalence of VVA in postmenopausal breast cancer patients is estimated to be between 42 and 70 percent.

Commonly used therapies for VVA are estrogen-based and are often contraindicated in HR+ breast cancer patients, or patients with a genetic predisposition or history of familial disease, because of the concern that estrogen use will promote recurrence or occurrence of disease.

We believe there is a clear unmet medical need for an effective non-hormonal treatment for VVA.

At the conclusion of our development program, if successful, we intend to leverage the existing safety and efficacy data for tamoxifen to utilize the FDA’s 505(b)(2) pathway to obtain marketing approval of DARE-VVA1 in the U.S.

Clinical Data

systemic absorption of the study drug.

In the open-label prospective cohort study with no placebo arm, participants were instructed to self-administer a vaginal suppository containing tamoxifen (20 mg) daily for one week and twice weekly for three months.

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In comparison, after three months of once daily administration of oral dose of 20-mg tamoxifen, Nolvadex® (tamoxifen citrate) tablets, the average steady state plasma concentration of tamoxifen is 122 ng/ml (range of 71 to 183 ng/ml).

In September 2021, we announced initiation of our Phase 1/2 clinical study of DARE-VVA1.

The randomized, multi-center, double-blind, parallel-arm, placebo-controlled, dose-ranging study is designed to evaluate the safety, tolerability, PK, and pharmacodynamics (PD) of DARE-VVA1 in postmenopausal participants with moderate to severe VVA and is being conducted by our wholly owned Australian subsidiary.

We expect the study will enroll approximately 40 postmenopausal women with VVA, including a cohort of women with a history of hormone-receptor positive breast cancer, at approximately three study sites.

Eligible participants will be randomly allocated to one of the five treatment groups (approximately 8 participants per group) that will evaluate four dose levels (1 mg, 5 mg, 10 mg, and 20 mg) and a placebo.

Following a screening visit, DARE-VVA1 will be self-administered intravaginally once a day for the first two weeks, and then twice a week for the following six weeks for a total treatment period of 56 days.

In each treatment group, participants will have serial blood sampling for PK analysis and undergo safety evaluations and preliminary assessments of effectiveness.

Following the completion of the treatment period, participants will attend a safety follow-up visit.

The primary endpoints of the study will evaluate the safety and tolerability of DARE-VVA1 by vaginal administration and determine the plasma PK of DARE-VVA1 after intravaginal application.

Secondary endpoints will evaluate the preliminary efficacy and PD of DARE-VVA1 in terms of the most bothersome symptom and changes in vaginal cytology and pH.

We anticipate reporting topline data from the study in the second half of 2022.

In November 2022, we announced topline results from of our Phase 1/2 clinical study of DARE-VVA1 conducted by our wholly owned subsidiary in Australia.

The randomized, multi-center, double-blind, parallel-arm, placebo-controlled, dose-ranging study enrolled 17 postmenopausal women with VVA and evaluated the safety, tolerability, plasma PK and pharmacodynamics (PD) of DARE-VVA1.

The age of the 17 study participants ranged from 49 to 68 years, with an average age of 60.9 years.

Participants were randomly allocated to one of five treatment groups (approximately four participants per group) that evaluated four dose levels of DARE-VVA1 (1 mg, 5 mg, 10 mg, and 20 mg tamoxifen) and a placebo.

Following a screening visit, DARE-VVA1 was self-administered by study participants intravaginally once a day for the first two weeks, and then twice a week for the following six weeks for a total treatment period of 56 days.

In each treatment group, participants had serial blood sampling for PK analysis and underwent safety evaluations and preliminary assessments of effectiveness.

Following the completion of the treatment period, participants attended a safety follow-up visit.

Fourteen participants completed the study.

The primary endpoints of the study evaluated the safety and tolerability of DARE-VVA1 by vaginal administration and determined the plasma PK of DARE-VVA1 after intravaginal application.

Secondary endpoints evaluated preliminary efficacy and PD of DARE-VVA1 in terms of the most bothersome vaginal symptom and changes in vaginal cytology and pH.

Intravaginal administration of DARE-VVA1 was well tolerated in the study and all treatment emergent adverse events were mild or moderate and equally distributed between participants randomized to study drug treatment versus placebo.

Concentration of tamoxifen in plasma samples collected over the course of the study did not exceed 10 ng/mL, even in participants in the highest dose group (20 mg tamoxifen).

Participants who received study drug treatment had improvements in the assessments and symptoms associated with VVA.

Specifically, they had decreases in vaginal pH, increases in the percentage of vaginal superficial cells, significant decreases in the percentage of vaginal parabasal cells (p=0.04), and reduction in their self-assessed most bothersome vaginal symptom reported.

Regarding the most bothersome vaginal symptom reported, of the participants randomized to receive study drug treatment, 39% (5/13) reported that vaginal dryness and 62% (8/13) reported that pain with intercourse (dyspareunia) was their most bothersome vaginal symptom at baseline.

At the end of the treatment period, among the participants randomized to receive study drug treatment who reported vaginal dryness as their most bothersome symptom at baseline (n=5) (moderate or severe), all those who completed the study reported that vaginal dryness was either absent (n=1) or mild (n=3).

Among the participants randomized to receive study drug treatment who reported dyspareunia as their most bothersome symptom at baseline (n=8) (moderate or severe), at the end of the treatment period, four reported no longer experiencing dyspareunia, one reported mild dyspareunia, two had no change in this symptom, and one did not complete the study.

Of the four participants randomized to the placebo group, two reported vaginal dryness and two reported dyspareunia as their most bothersome symptom at baseline.

At the end of the treatment period, the participants randomized to the placebo group who reported vaginal dryness as their most bothersome symptom at baseline (n=2) (moderate or severe), reported that vaginal dryness was either absent (n=1) or mild (n=1), and among the participants randomized to the placebo group who reported dyspareunia as their most bothersome symptom at baseline (n=2), one reported no longer experiencing dyspareunia and one did not complete the study.

We believe the topline results of the Phase 1/2 clinical study support ongoing development of DARE-VVA1 as a treatment for moderate to severe VVA, and that DARE-VVA1 has the potential to be the first therapeutic studied specifically for the treatment of VVA in hormone adverse patients, such as those with, or at risk of recurrence of, HR+ breast cancer.

We acquired the DARE-VVA1 program through our acquisition of Pear Tree Pharmaceuticals in 2018.

See "Strategic Agreements for Pipeline Development" below for discussion of that merger agreement.

DARE-PDM1 is a hydrogel formulation of diclofenac for vaginal administration, designed to treat primary dysmenorrhea.

DARE-PDM1 utilizes our proprietary hydrogel technology to vaginally deliver the active pharmaceutical ingredient, diclofenac, a nonsteroidal anti-inflammatory drug (NSAID), in a novel way.

Primary dysmenorrhea is defined as painful menstruation in girls and women with normal pelvic anatomy, typically described as cramping pain in the low back or lower abdomen before or during the menstrual period.

Oral NSAIDs, such as diclofenac, are often recommended for temporary relief from the painful symptoms of primary dysmenorrhea.

Because there are currently no FDA-approved vaginal diclofenac treatment options for primary dysmenorrhea, DARE-PDM1 has the potential to be a first-in-category product, delivering diclofenac in a convenient vaginal format that may extend the duration of pain relief and reduce the risks associated with the oral delivery of NSAIDs.

According to the American College of Obstetricians and Gynecologists’ Committee on Adolescent Health Care, dysmenorrhea is the most common menstrual symptom among adolescent girls and young women, and most adolescents experiencing dysmenorrhea have primary dysmenorrhea.

Prevalence rates of dysmenorrhea vary but range from 50% to 90%.

Phase 1 Clinical Study

In February 2023 we announced the start of a Phase 1 clinical study of DARE-PDM1, which is being conducted by our wholly owned subsidiary in Australia.

The DARE-PDM1 Phase 1 study, DARE-PDM1-001, is a multi-center, randomized, placebo-controlled, double-blind, three-arm parallel group study expected to enroll approximately 36 healthy, premenopausal women with primary dysmenorrhea.

This study is designed to assess the systemic (plasma) and local mucosal (vaginal fluid) diclofenac PK and safety after a single dose and during three daily doses of vaginally administered DARE-PDM1, given in two different strengths (1% or 3% diclofenac in 2.5 mL of hydrogel) versus placebo.

The study will also assess, as an exploratory endpoint, the preliminary dysmenorrhea treatment efficacy of DARE-PDM1, when dosed in three daily doses at the onset of dysmenorrhea symptoms, compared to a no-treatment, baseline, control cycle.

The study observation period will encompass approximately three menstrual cycles.

We anticipate announcing topline data from the study in 2023.

At the conclusion of the development program, if successful, we intend to leverage the existing safety and efficacy data for diclofenac to utilize the FDA's 505(b)(2) pathway to obtain marketing approval of DARE-PDM1 in the U.S.

We are developing DARE-PDM1 under our agreements with TriLogic Pharma, LLC, MilanaPharm LLC and Hammock Pharmaceuticals, Inc.

See "Strategic Agreements for Pipeline Development" below for discussion of those agreements.

DARE-204 and DARE-214

DARE-204 and DARE-214 are formulations of etonogestrel designed to provide contraception over 6-month and 12-month periods, respectively.

These product candidates are being developed as a sub-cutaneous injectable, longer-acting, reversible method of contraception with a more predictable return to fertility.

We are conducting development activities in preparation for Phase 1 clinical studies of these product candidates.

If we exercise our option and enter into an exclusive worldwide license agreement for DARE-204 and/or DARE-214, at the conclusion of these development programs, if successful, we intend to leverage the existing safety and efficacy data for etonogestrel to utilize the FDA's 505(b)(2) pathway to obtain marketing approval in the U.S.

We are developing DARE-204 and DARE-214 under our development and option agreement with Adare Pharmaceuticals USA, Inc.

See "Strategic Agreements for Pipeline Development" below for discussion of the terms of that agreement.

DARE-FRT1 and DARE-PTB1

DARE-FRT1 and DARE-PTB1 are IVRs designed to release bio-identical progesterone over a 14-day period.

DARE-FRT1 is being developed for broader luteal phase support as part of an in vitro fertilization, or IVF , treatment plan.

DARE-FRT1 and DARE-PTB1 are IVRs designed to release bio-identical progesterone over an up to 14-day period.

DARE-FRT1 is being developed for luteal phase support as part of an in vitro fertilization, or IVF , treatment plan.

DARE-PTB1 is being developed for the prevention of preterm birth.

Each of DARE-FRT1 and DARE-PTB1 was developed from the same IVR technology platform as DARE-HRT1.

DARE-FRT1 and DARE-PTB1 use the same IVR technology platform as DARE-HRT1.

We are conducting development activities in preparation for Phase 1 clinical studies of these product candidates.

We intend to leverage the existing safety and efficacy data for progesterone to utilize the FDA’s 505(b)(2) pathway to obtain marketing approval of DARE-FRT1 and DARE-PTB1 in the U.S.

At the conclusion of these development programs, if successful, we intend to leverage the existing safety and efficacy data for progesterone to utilize the FDA’s 505(b)(2) pathway to obtain marketing approval of DARE-FRT1 and DARE-PTB1 in the U.S.

We are developing DARE-FRT1 and DARE-PTB1 under our license agreement with Catalent JNP, Inc.

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• DARE-LARC1 , a contraceptive implant delivering levonorgestrel with a woman-centered design that has the potential to be a long-acting, yet convenient and user-controlled contraceptive option;

• ADARE-204 and ADARE-214 , injectable formulations of etonogestrel designed to provide contraception over 6-month and 12-month periods, respectively;

• DARE-GML , an intravaginally-delivered potential multi-target antimicrobial agent formulated with glycerol monolaurate (GML), which has shown broad antimicrobial activity, killing bacteria and viruses;

• DARE-LBT , a novel hydrogel formulation for delivery of live biotherapeutics to support vaginal health;

• DARE-RH1 , a novel approach to non-hormonal contraception for both men and women by targeting the CatSper ion channel.

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DARE-LARC1’s woman-centered design seeks to offer the benefits of traditional long-acting reversible contraceptives with the added flexibility and convenience for the user to pause and resume release of levonorgestrel, depending on her desire for fertility or contraceptive protection.

Under a grant agreement we entered into in June 2021, we may receive up to $48.95 million, payable over approximately five years, to advance development of the technology through nonclinical proof of principle studies to enable an investigational new drug, or IND, submission.

We received an initial payment under that grant of $11.45 million in 2021.

Under a grant agreement we entered into in June 2021, as amended, we may receive up to approximately $49.0 million, payable over approximately five years, to advance development of the technology through nonclinical proof of principle studies to enable an IND submission.

As of the date of this report, we have received payments totaling approximately $23.9 million under the grant agreement.

Additional payments are contingent upon the DARE-LARC1 program's achievement of development and reporting milestones specified in the grant agreement.

Additionally in 2021, we received an unrelated NICHD grant award of approximately $300,000 to be used to explore device insertion and removal in nonclinical studies.

The DARE-LBT program is being supported by a private foundation grant of approximately $585,000 under a grant agreement that we entered into in November 2022.

The grant funds support activities related to development of a vaginal thermosetting gel formulation for the delivery of live biotherapeutics that can be reconstituted at the point of care.

If successful, the formulation could be carried forward for further development as a delivery vehicle with potential to enhance the availability of novel therapeutics for vaginal health in the United States and worldwide, including in countries with varying climatic conditions and/or where extended storage may be required.

Sales and Marketing

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These options include building our own sales force and other commercial infrastructure, entering into strategic marketing partnerships with third parties, including commercial sales organizations or other pharmaceutical or biotechnology companies, out-licensing the product to other pharmaceutical or biotechnology companies, and combinations of these strategies.

We have entered into an exclusive license agreement with Organon to out-license worldwide commercialization of XACIATO and an exclusive license agreement with Bayer to out-license U.S.

Organon has global commercial rights to XACIATO under our exclusive license agreement, and we have an exclusive license agreement with Bayer to out-license U.S.

commercialization of Ovaprene.

Each of these licensees has established marketing, sales and distribution capabilities in women's health.

Each of these collaborators has established marketing, sales and distribution capabilities in women's health.

We expect to continue to evaluate each product opportunity and pursue the commercialization strategy that we believe will maximize the return on our assets in and outside of the U.S.

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We do not own or operate, nor do we expect to own or operate, facilities for manufacturing, storage and distribution, or testing of our product or product candidates.

We rely on third parties to supply and manufacture our product candidates and other materials necessary to conduct pre-clinical testing, clinical trials and other activities required for regulatory approval of our product candidates, and expect to continue to do so in the future.

We rely on third parties to supply and manufacture our

product candidates and other materials necessary to conduct pre-clinical testing, clinical trials and other activities required for regulatory approval of our product candidates, and expect to continue to do so in the future.

In addition, to the extent our commercialization strategy for a product requires that we undertake commercial supply obligations, we intend to rely on contract manufacturers and suppliers for manufacture, storage, distribution and testing of our finished commercial products and their respective components, including the active pharmaceutical ingredients, or API.

These arrangements require less upfront capital expenditure and allow us to maintain a smaller and more flexible infrastructure.

Under the terms of our license agreement with Organon, we will be responsible for providing product supply of XACIATO on an interim basis until Organon assumes such responsibility.

Under the terms of our license agreement with Organon, we are responsible for providing product supply of XACIATO on an interim basis until Organon assumes such responsibility.

In March 2022, we entered into a long-term supply and manufacturing agreement with the contract manufacturing organization, or CMO, that provided clinical supplies of XACIATO for our pivotal Phase 3 DARE-BVFREE clinical study.

This CMO currently is our sole source for commercial supplies of XACIATO.

Under the terms of our agreement, the CMO is responsible for obtaining supplies, at our expense, of all the components necessary for the manufacture of XACIATO, including the API, clindamycin.

Under the terms of our agreement, the CMO is responsible for obtaining supplies, at our expense, of all components necessary for the manufacture of XACIATO, including the API, clindamycin.

Our agreement contemplates potential assignment by us to a commercial collaborator.

We expect to have sufficient quantities of XACIATO finished product to support commercial launch in 2022.

Under our agreements with ADVA-Tec and SST, respectively, ADVA-Tec is responsible for providing all clinical trial and commercial supplies of Ovaprene, either directly or through a CMO, and SST is responsible for providing Sildenafil Cream, 3.6% for the Phase 2b clinical study.

We expect to have sufficient quantities of XACIATO to support commercial launch in the first half of 2023.

Under our agreement with ADVA-Tec, ADVA-Tec is responsible for providing all clinical trial and commercial supplies of Ovaprene, either directly or through a CMO, and except under limited circumstances, we may not obtain supplies of Ovaprene from any source other than ADVA-Tec or its CMO and licensor, Poly-Med, Inc.

Other than our agreement with ADVA-Tec, we have no long-term arrangements for the production or supply of our product candidates or the materials required to produce them.

Under the terms of our license agreement with SST, SST is responsible for providing clinical supplies of Sildenafil Cream, 3.6% for Phase 2 clinical studies in the U.S., and we are responsible for manufacturing or obtaining all other clinical and commercial supplies of Sildenafil Cream, 3.6%.

We expect that our current arrangements will meet our foreseeable needs for clinical trial materials or, generally, that alternative supply sources will be readily available.

However, we may experience manufacturing and supply delays and disruptions in connection with CMOs scaling up production to meet our clinical supply requirements for later stage clinical studies.

However, we may experience manufacturing and supply delays and disruptions in the event we need to engage alternative supply sources, as well as in connection with our current CMOs scaling up production to meet our clinical supply requirements for later stage clinical studies.

In addition, some key raw materials or components of our clinical-stage product candidates, including Ovaprene and Sildenafil Cream, 3.6%, have only a single source of supply and alternative supply sources may not be readily available.

Global supply chain disruptions related to the COVID-19 pandemic and recent geopolitical events may contribute to manufacturing and supply delays.

"RISK FACTORS – Risks Related to Product Research & Development and Regulatory Approval – Manufacturing and supply delays and disruptions may significantly delay our clinical studies and be expensive for us to resolve” below.

"RISK FACTORS – Risks Related to Product Research & Development and Regulatory Approval – Delays in the manufacture of our clinical and commercial supplies as well as other supply chain disruptions could postpone the initiation of or interrupt clinical studies, extend the timeframe and cost of development of our product candidates, delay potential regulatory approvals and impact the commercialization of any approved products” below.

Strategic Agreements for Product Commercialization

Organon License Agreement

On March 31, 2022, we entered into an exclusive license agreement with Organon pursuant to which Organon will obtain exclusive worldwide rights to develop, manufacture and commercialize XACIATO and other future intravaginal or urological products for human use formulated with clindamycin that rely on intellectual property we control.

Under the agreement, we will receive a $10.0 million non-refundable and non-creditable payment following the effective date of the agreement and will be entitled to receive tiered double-digit royalties based on net sales and up to $182.5 million in milestone payments as follows:

$2.5 million following the first commercial sale of a licensed product in the United States, which is expected to occur during the fourth quarter of 2022;

In March 2022, we entered into an agreement with Organon, which became fully effective in June 2022, whereby Organon licensed exclusive worldwide rights to develop, manufacture and commercialize XACIATO and other future intravaginal or urological products for human use formulated with clindamycin that rely on intellectual property we control.

Under the agreement, in July 2022, we received a $10.0 million non-refundable and non-creditable payment and are entitled to receive tiered double-digit royalties based on net sales and up to $182.5 million in milestone payments as follows:

$2.5 million following the first commercial sale of a licensed product in the United States, which is expected to occur in the first half of 2023;

and up to $180.0 million in tiered commercial sales milestones and regulatory milestones.

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The royalty period for each licensed product will continue on a country-by-country basis from the first commercial sale of the licensed product in the country until the expiration of the later of (i) the date that no valid patent claim would be infringed in the absence of the license granted under the agreement by the sale of the licensed product in the country, (ii) 10 years after the end of the month in which the first commercial sale of the licensed product in the country occurred, and (iii) the expiration of regulatory market exclusivity for the licensed product in that country.

Under the agreement, we will be responsible for regulatory interactions and for providing product supply on an interim basis until Organon assumes such responsibilities.

Until such time, Organon will purchase all of its product requirements of XACIATO from us at a transfer price equal to our manufacturing costs plus a single-digit percentage markup.

The effective date of the agreement will occur following the satisfaction of closing conditions that include receipt of all applicable approvals, or the expiration or termination of all applicable waiting periods, required under applicable antitrust laws, including the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

Under our agreement with Organon, we are responsible for regulatory interactions and for providing product supply on an interim basis until Organon assumes such responsibilities.

Until such time, Organon will purchase all of

its product requirements of XACIATO from us at a transfer price equal to our manufacturing costs plus a single-digit percentage markup.

Unless terminated earlier, the agreement will expire on a product-by-product and country-by-country basis upon expiration of the applicable royalty period for each licensed product.

In addition to customary termination rights for both parties, following the first anniversary of the effective date of the Agreement, Organon may terminate the Agreement in its entirety or on a country-by-country basis at any time in Organon’s sole discretion on 120 days’ advance written notice.

In addition to customary termination rights for both parties, following the first anniversary of the effective date of the agreement, or June 30, 2023, Organon may terminate the agreement in its entirety or on a country-by-country basis at any time in Organon’s sole discretion on 120 days’ advance written notice.

The agreement includes customary representations and warranties, covenants and indemnification obligations of each party.

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Strategic Agreements for Pipeline Development

Hammock/MilanaPharm Assignment and License Agreement

Hennepin License Agreement

In August 2022, we entered into a license agreement with Hennepin Life Sciences LLC, or Hennepin, under which we acquired the exclusive global rights to develop and commercialize treatments delivering the novel antimicrobial glycerol monolaurate (GML) intravaginally for a variety of health conditions including bacterial, fungal, and viral infections.

As a result of this license agreement, we commenced our DARE-GML program.

Under the agreement, we received an exclusive, worldwide, royalty-bearing license to research, develop and commercialize the licensed technology.

We are entitled to sublicense the rights granted to us under the agreement.

The following is a summary of other terms of the agreement:

Milestone Payments.

We agreed to make potential future development and sales milestone payments of (1) up to $6.25 million in the aggregate upon achieving certain development and regulatory milestones, and (2) up to $45.0 million in the aggregate upon achieving certain commercial sales milestones for each product covered by the

licenses granted under the agreement, which may be paid, in our sole discretion, in cash or shares of our common stock.

Royalty Payments.

Hennepin is eligible to receive tiered royalties in low single-digit to low double-digit percentages based on worldwide net sales of products and processes covered by the licenses granted under the agreement.

We must use commercially reasonable efforts to develop and introduce to market at least one product.

Unless earlier terminated, the agreement expires in its entirety upon the last to expire royalty term.

In addition to customary termination rights for both parties, we may elect to terminate the agreement at any time, with or without cause, on a country-by-country basis, and Hennepin may terminate the agreement if we do not undertake any development work with respect to the licensed intellectual property for five consecutive years from the date of the agreement.

Cooperative Research and Development Agreement with NICHD

In July 2021, we entered into a CRADA with the U.S.

Department of Health and Human Services, as represented by NICHD, part of the NIH, for the conduct of a pivotal Phase 3 clinical study of Ovaprene.

See also “Our Pipeline:

Clinical Stage Programs – Ovaprene” above.

Pursuant to the terms of the CRADA, we are responsible for providing a total of $5.5 million in four payments to NICHD to be applied toward the costs of conducting the Phase 3 study, a total of $1.5 million of which we paid in two installments 2021 and $3.5 million of which we paid in the first quarter of 2022 in accordance with the payment schedule under the CRADA.

The final payment, due in the second quarter of 2023, is $500,000.

NICHD will be responsible for the other costs related to the conduct of the Phase 3 study and will manage the payment of expenses to other parties involved with the study.

Either we or NICHD may terminate the CRADA for any reason upon 30 days’ prior written notice to the other party.

Subject to the U.S.

government may have in inventions jointly or independently invented by NICHD employees for which a patent application is filed.

The CRADA also contains customary representations, warranties, and indemnification and confidentiality obligations.

The CRADA expires five years from its effective date.

Sublicense Revenue Share .

Former stockholders of Pear Tree are eligible to receive tiered royalties based on single-digit to low double-digit percentages of annual net sales of licensed products by us or our affiliates, subject to customary reductions and offsets, and a portion of royalties we receive from sublicensees.

These payments may be made, in our sole discretion, in cash or in shares of our common stock in accordance with the terms of the merger agreement.

Pear Tree’s licensors are eligible to receive semi-annual royalties based on a single-digit percentage of net sales of licensed products by us or our affiliates, subject to customary reductions and offsets, or a portion of any royalties received by us or our affiliates from sublicensees, and a low double-digit percentage of all sublicensing fees or other lump sum payments or compensation we receive from sublicensees,

subject to customary exclusions.

Portions of certain milestone payments made to Pear Tree’s licensors may be creditable against royalty payments due to Pear Tree’s licensors.

License Agreements Revenue Share Offset .

Under the merger agreement, in addition to customary royalty reductions and offsets, royalty payments and payments based on income received from sublicensees of licensed products made by us to Pear Tree’s licensors are creditable against all royalty and sublicense revenue share payments payable to former stockholders of Pear Tree.

Catalent JNP License Agreement

In April 2018, we entered into an exclusive license agreement with Catalent JNP, Inc.

(formerly known as Juniper Pharmaceuticals, Inc., and which we refer to as Catalent in this report), under which Catalent granted us (a) an exclusive, royalty-bearing worldwide license under certain patent rights, either owned by or exclusively licensed to Catalent, to make, have made, use, have used, sell, have sold, import and have imported products and processes;

and (b) a non-exclusive, royalty-bearing worldwide license to use certain technological information owned by Catalent to make, have made, use, have used, sell, have sold, import and have imported products and processes.

We are entitled to sublicense the rights granted to us under this agreement.

The following is a summary of other terms of the Catalent license agreement:

We paid a $250,000 non-creditable upfront license fee to Catalent in connection with the execution of the agreement.

Annual Maintenance Fee.

We will pay an annual license maintenance fee of $100,000 to Catalent on each anniversary of the date of the agreement, which will be creditable against royalties and other payments due to Catalent in the same calendar year (including milestone payments and sublicense income), but may not be carried forward to any other year.

Milestone Payments.

Catalent is eligible to receive (1) up to $13.5 million in the aggregate in payments based on the achievement of specified clinical and regulatory milestones, $1.0 million of which became payable in 2021, and in accordance with the license agreement, the amount was offset by the $100,000 annual maintenance fee, resulting in a net amount of $900,000 paid to Catalent, and (2) up to $30.3 million in the aggregate in payments based on the achievement of specified commercial sales milestones for each product or process covered by the licenses granted under the agreement.

Royalty Payments .

During the royalty term, Catalent is eligible to receive mid single-digit to low double-digit royalties based on worldwide net sales of products and processes covered by the licenses granted under the agreement.

In lieu of such royalty payments, we will pay Catalent a low double-digit percentage of all sublicense income we receive for the sublicense of rights under the agreement to a third party.

The royalty term, which is determined on a country-by-country basis and product-by-product basis (or process-by-process basis), begins with the first commercial sale of a product or process in a country and terminates on the latest of (1) the expiration date of the last valid claim within the licensed patent rights with respect to such product or process in such country, (2) 10 years following the first commercial sale of such product or process in such country, and (3) when one or more generic products for such product or process are commercially available in such country, except that if there is no such generic product by the 10th year following the first commercial sale in such country, then the royalty term will terminate on the 10-year anniversary of the first commercial sale in such country.

We must use commercially reasonable efforts to develop and make at least one product or process available to the public, which efforts include achieving specific diligence requirements by specific dates specified in the agreement.

Unless earlier terminated, the term of the agreement will continue on a country-by-country basis until the later of (1) the expiration date of the last valid claim within such country, or (2) 10 years from the date of first commercial sale of a product or process in such country.

Upon expiration (but not early termination) of the agreement, the licenses granted thereunder will convert automatically to fully-paid irrevocable licenses.

Catalent may terminate the agreement (1) upon 30 days’ notice for our uncured breach of any payment obligation under the agreement, (2) if we fail to maintain required insurance, (3) immediately upon our insolvency or the making of an assignment for the benefit of our creditors or if a bankruptcy petition is filed for or against us, which petition is not dismissed within 90 days, or (4) upon 60 days’ notice for any uncured material breach by us of any of our other obligations under the agreement.

We may terminate the agreement on a country-by-country basis for any reason by giving 180 days’ notice (or 90 days’ notice if such termination occurs prior to receipt of marketing approval in the United States).

terminates the agreement for the reason described in clause (4) above or if we terminate the agreement, Catalent will have full access including the right to use and reference all product data generated during the term of the agreement that is owned by us.

Adare Development and Option Agreement

In March 2018, we entered into an exclusive development and option agreement with Adare Pharmaceuticals USA, Inc.

(formerly known as Orbis Biosciences, Inc., and which we refer to as Adare), for the development and potential exclusive worldwide license of injectable formulations of etonogestrel for contraceptive protection over 6-month and 12-month periods (which we refer to as DARE-204 and DARE-214, respectively).

The agreement, as amended, provides us with an option to negotiate an exclusive, worldwide, royalty-bearing license, with rights to sublicense, for the programs if we fund the conduct of specified development work.

We have no obligation to exercise our option.

SST License and Collaboration Agreement

In February 2018, we entered into a license and collaboration agreement with Strategic Science and Technologies-D, LLC and Strategic Science Technologies, LLC, referred to collectively as SST, under which we received an exclusive, royalty-bearing, sublicensable license to develop and commercialize, in all countries and geographic territories of the world, for all indications for women related to female sexual dysfunction and/or female reproductive health, including treatment of female sexual arousal disorder, or the Field of Use, SST's topical formulation of Sildenafil Cream, 3.6% as it existed as of the effective date of this agreement, or any other topically applied pharmaceutical product containing sildenafil or a salt thereof as a pharmaceutically active ingredient, alone or with other active ingredients, but specifically excluding any product containing ibuprofen or any salt derivative of ibuprofen, or the Licensed Products.

In February 2018, we entered into a license and collaboration agreement with Strategic Science & Technologies-D LLC and Strategic Science & Technologies, LLC, referred to collectively as SST, under which we received an exclusive, royalty-bearing, sublicensable license to develop and commercialize, in all countries and geographic territories of the world, for all indications for women related to female sexual dysfunction and/or female reproductive health, including treatment of female sexual arousal disorder, or the Field of Use, SST's topical formulation of Sildenafil Cream, 3.6% as it existed as of the effective date of this agreement, or any other topically applied pharmaceutical product containing sildenafil or a salt thereof as a pharmaceutically active ingredient, alone or with other active ingredients, but specifically excluding any product containing ibuprofen or any salt derivative of ibuprofen, or the Licensed Products.

The following is a summary of other terms of the SST license agreement:

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(1) prior to receipt of approval by a regulatory authority necessary for commercialization of a Licensed Product in the corresponding jurisdiction, including NDA approval, we may terminate the agreement without cause upon 90 days prior written notice;

(2) following receipt of approval by a regulatory authority necessary for commercialization of a Licensed Product in the corresponding jurisdiction, including NDA approval, we may terminate the agreement without cause upon 180 days prior written notice;

and (3) SST may terminate the agreement with respect to the applicable Licensed Product(s) in the applicable country(ies) upon 30 days’ notice if we fail to use commercially reasonable efforts to perform development activities in substantial accordance with the development plan and do not cure such failure within 60 days of receipt of SST's notice thereof.

Catalent JNP License Agreement

In April 2018, we entered into an exclusive license agreement with Catalent JNP, Inc.

We are entitled to sublicense the rights granted to us under this agreement.

The following is a summary of other terms of the Catalent license agreement:

We paid a $250,000 non-creditable upfront license fee to Catalent in connection with the execution of the agreement.

Annual Maintenance Fee.

We will pay an annual license maintenance fee to Catalent on each anniversary of the date of the agreement, the amount of which will be $50,000 for the first two years, and $100,000 thereafter, and which will be creditable against royalties and other payments due to Catalent in the same calendar year but may not be carried forward to any other year.

We made the first of these payments in April 2019.

Milestone Payments.

We must make potential future development and sales milestone payments of (1) up to $13.5 million in the aggregate upon achieving certain clinical and regulatory milestones, $1.0 million of which became payable in the third quarter of 2021, and in accordance with the license agreement, the amount was offset by the $100,000 annual maintenance fee, resulting in a net amount of $900,000 paid during the third quarter of 2021, and (2) up to $30.3 million in the aggregate upon achieving certain commercial sales milestones for each product or process covered by the licenses granted under the agreement.

Royalty Payments .

During the royalty term, we will pay Catalent mid-single-digit to low double-digit royalties based on worldwide net sales of products and processes covered by the licenses granted under the agreement.

In lieu of such royalty payments, we will pay Catalent a low double-digit percentage of all sublicense income we receive for the sublicense of rights under the agreement to a third party.

Upon expiration (but not early termination) of the agreement, the licenses granted thereunder will convert automatically to fully-paid irrevocable licenses.

If Catalent terminates the agreement for the reason described in clause (4) above or if we terminate the agreement, Catalent will have full access including the right to use and reference all product data generated during the term of the agreement that is owned by us.

Pear Tree Acquisition

In May 2018, we completed our acquisition of Pear Tree Pharmaceuticals, Inc., or Pear Tree.

We acquired Pear Tree to secure the rights to develop a proprietary vaginal formulation of tamoxifen, now known as DARE-VVA1, as a potential treatment for vulvar and vaginal atrophy.

ADVA-Tec License Agreement

In March 2017, we entered into a license agreement with ADVA-Tec, Inc., under which we were granted an exclusive license to develop and commercialize Ovaprene for human contraceptive use worldwide.

ADVA-Tec will conduct certain research and development work as necessary to allow us to seek a PMA from the FDA.

ADVA-Tec is responsible for providing us with clinical trial and commercial supplies of Ovaprene, either directly or through a CMO, on commercially reasonable terms, and, except under limited circumstances, we may not obtain supplies of Ovaprene from another source.

Under the license agreement, in addition to an exclusive, sublicensable license to ADVA-Tec’s and its affiliates’ intellectual property rights for all uses of Ovaprene as a human contraceptive device, we have a right of first refusal to license these patents and patent applications for additional indications.

The following is a summary of other terms of the ADVA-Tec license agreement:

Milestone Payments.

Contingent payments to the Pear Tree former stockholders or their representatives that become payable upon achievement of specified clinical, regulatory and commercial milestones, may be paid, in our sole discretion, in cash or shares of our common stock.

We will pay to ADVA-Tec:

(1) up to $14.6 million in the aggregate based on the achievement of specified development and regulatory milestones, $1.2 million of which has been paid;

and (2) up to $20 million in the aggregate based on the achievement of certain worldwide net sales milestones.

The remaining development and regulatory milestones include:

successful completion of a Phase 3/pivotal clinical trial;

the FDA’s acceptance of a PMA filing for Ovaprene;

the FDA’s approval of the PMA for Ovaprene;

CE Marking of Ovaprene in at least three designated European countries;

obtaining regulatory approval in at least three designated European countries;

and obtaining regulatory approval in Japan.

Royalty Payments.

The former stockholders of Pear Tree will be eligible to receive, subject to certain offsets, tiered royalties, including customary provisions permitting royalty reductions and offset, based on percentages of annual net sales of certain products subject to license agreements we assumed and a percentage of sublicense revenue.

MBI Acquisition

In November 2019, we acquired Dare MB Inc.

(formerly, Microchips Biotech, Inc.), or MBI, to secure the rights to develop a long-acting reversible contraception method that a woman can turn on or off herself, according to her own needs.

This candidate is now known as DARE-LARC1.

At the closing of the merger, we issued an aggregate of approximately 3.0 million shares of our common stock to the holders of shares of MBI’s capital stock outstanding immediately prior to the effective time of the merger.

The transaction was valued at $2.4 million, based on the fair value of the approximately 3.0 million shares issued at $0.79 per share, which was the closing price per share of our common stock on the date of closing.

The shares were issued in consideration of MBI's cash and cash equivalents of $6.1 million, less net liabilities of $3.5 million and transaction costs of $202,000, which was allocated based on the relative fair value of the assets acquired and liabilities assumed.

We agreed to pay the following additional consideration to the former MBI stockholders:

(a) up to $46.5 million contingent upon the achievement of specified funding, product development and regulatory milestones;

(b) up to $55.0 million contingent upon the achievement of specified amounts of aggregate net sales of products incorporating the intellectual property we acquired in the merger;

(c) tiered royalty payments ranging from low single-digit to low double-digit percentages of annual net sales of such products, subject to customary provisions permitting royalty reductions and offset;

and (d) a percentage of sublicense revenue related to such products.

We agreed to use commercially reasonable efforts to achieve specified development and regulatory objectives relating to DARE-LARC1.

In June 2021, a total of $1.25 million of that potential additional consideration became payable upon the achievement of certain of the funding and product development milestone events, $1.0 million of which was recorded as contingent consideration on our consolidated balance sheets upon the completion of the MBI acquisition and $250,000 of which was expensed in 2021.

Adare Development and Option Agreement

In March 2018, we entered into an exclusive development and option agreement with Adare Pharmaceuticals (formerly known as Orbis Biosciences, and which we refer to as Adare), for the development of long-acting injectable etonogestrel contraceptive with 6- and 12-month durations (now known as ADARE-204 and ADARE-214, respectively).

The agreement provides us with an option to negotiate an exclusive license agreement for the programs if we fund the conduct of specified development work by Adare.

ADVA-Tec is eligible to receive royalties based on aggregate annual net sales of Ovaprene in specified regions at a royalty rate that will vary between 1% and 10% and will increase based on various net sales thresholds, subject to customary reductions and offsets.

Sublicense Revenue Payments .

If we sublicense our rights under the license agreement, in lieu of royalty payments to ADVA-Tec, ADVA-Tec is eligible to receive a double-digit percentage of sublicense revenue received by us during the royalty term;

provided, however, that for sublicense revenue we receive prior to the first commercial sale of a licensed product that represents an upfront payment or license fee due on or around the effective date of the sublicense, ADVA-Tec is eligible to receive a single-digit percentage of that sublicense revenue.

In addition to customary termination rights for both parties:

(A) we may terminate the agreement with or without cause in whole or on a country-by-country basis upon 60 days prior written notice;

and (B) ADVA-Tec may terminate the agreement if we develop or commercialize any non-hormonal ring-based vaginal contraceptive device competitive to Ovaprene or if we fail to:

(1) in certain limited circumstances, commercialize Ovaprene in certain designated countries within three years of the first commercial sale of Ovaprene;

Intellectual Property

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patent application.

If issued, the patent term for these patents issuing from these pending applications would be expected to expire in 2036, subject to any extensions or disclaimers.

If issued, the patent term for any patents issuing from these pending applications would be expected to expire in 2036, subject to any extensions or disclaimers.

We own a pending PCT application and one foreign application regarding XACIATO, and a pending PCT application directed to the thermosetting hydrogel platform.

The patent term for any patents issuing from these pending applications would be expected to expire in 2042, subject to any extensions or disclaimers.

Organon has licensed XACIATO-specific patents and applications from us.

Under the terms of the ADVA-Tec license agreement, regarding Ovaprene, we are the exclusive licensee of nine granted U.S.

patents, one pending U.S.

patent application, eight granted foreign patents, including four EPO patents validated in a total of 55 countries, and seven pending foreign patent applications.

Two of the patents that are particularly important to the protection of Ovaprene have terms until August 2028, which includes days added to the term by patent term adjustment, and a third patent has a term that expires in July 2027, including patent term adjustment, each of such terms being subject to any future extensions or disclaimers.

patents, two pending U.S.

patent application, nine granted foreign patents, including four EPO patents validated in a total of 55 countries, and eighteen pending foreign patent applications.

Two of the U.S.

patents have terms until August 2028, which includes days added to the term by patent term adjustment, and a third patent has a term that expires in July 2027, including patent term adjustment, each of such terms being subject to any future extensions or disclaimers.

The patent terms for any patents issuing from the pending applications would be expected to expire in 2035 or 2040, subject to any extensions or disclaimers.

Under the terms of the SST license agreement, regarding Sildenafil Cream, 3.6%, we are the exclusive licensee in the Field of Use of 22 issued patents worldwide (nine U.S.

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Under the terms of the Catalent license agreement, regarding our intravaginal ring platform which includes DARE-HRT1, we are the exclusive licensee of four issued U.S.

patents with patent terms set to expire in April 2024, November 2024, February 2025, and September 2027, including patent term adjustment, four issued foreign patents with patent terms until April 2024, including one European patent validated in three countries, as well as one pending U.S.

application and two pending foreign applications that if granted are expected to have patent terms that expire in May 2038, subject to any extensions or disclaimers.

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patents and one Japanese patent.

The patent term for the U.S.

The patent terms for the U.S.

patents are expected to expire in June 2027, June 2028, and May 2035 including any patent term adjustment, extensions or disclaimers.

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When we acquired MBI in 2019, we obtained the rights to over 100 patents and applications.

The key technology underlying the platform is supported by 16 U.S.

patents and 45 foreign patents, including six EPO patents validated in various European countries, and six pending patent applications, including two U.S.

applications and one Patent Cooperation Treaty (PCT) international application.

We believe that three of the most recently granted patent families are most directly applicable to our DARE-LARC1 program.

The key technology underlying the platform currently is supported by 15 U.S.

patents and 43 foreign patents, including five EPO patents validated in various European countries, and 17 pending patent applications.

We believe that the four most recently filed patent families are directly applicable to our DARE-LARC1 program.

Those patent families have patent terms that are set to expire 2032, 2033, 2034, and 2040 respectively, subject to any extensions or disclaimers.

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and other key international markets.

One pending U.S.

patent application, which has a pending PCT international counterpart, related to DARE-LARC1, if granted, would have a patent term that would be expected to expire in 2040, subject to any extensions or disclaimers.

Under the terms of the Hennepin license agreement, we are the exclusive licensee of four issued U.S.

patents and three foreign patents, as well as five pending U.S.

applications and seven pending foreign applications.

patents are set to expire in 2025, 2026, 2028 and 2034 including any patent term adjustment, extensions or disclaimers, and the foreign patents have patent terms until 2025 or 2033.

and foreign applications, if granted, are expected to have patent terms that expire in 2033, 2037, and 2038, subject to any extensions or disclaimers.

We also rely upon trade secret rights to protect our product candidates as well as other technologies that may be used to discover, validate and commercialize our current or any future product candidates.

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The industries in which we operate (biopharmaceutical, specialty pharmaceutical, biotechnology and medical device) are highly competitive and subject to rapid and significant change.

Our success is highly dependent upon our

ability to acquire or in-license, develop and obtain regulatory approval for innovative medical products on a cost-effective basis and to market them successfully, either on our own or together with strategic partners.

Our success is highly dependent upon our ability to acquire or in-license, develop and obtain regulatory approval for innovative medical products on a cost-effective basis and to market them successfully, either on our own or together with strategic partners.

We face and will continue to face intense competition from a variety of businesses, including large, fully integrated, well-established pharmaceutical companies that already possess a significant share of the women’s health market.

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Based on the XACIATO product profile reflected in the FDA-approved prescribing information, including the consistent cure rates demonstrated among the subsets of patients defined by prior episodes of bacterial vaginosis (≤ 3 and >3 episodes in the previous 12 months), and the labeling for special populations such as pregnant and lactating women, we expect that the product may to be used by health care providers as a first line option for treating bacterial vaginosis.

As a result of our exclusive license agreement with Organon, the commercial success of XACIATO is largely outside of our control.

Our investigational contraceptive products, including Ovaprene, if approved, will compete with a wide range of prescription and over-the-counter contraceptive options, including hormone-free options such as condoms, diaphragms, cervical caps, sponges, copper IUDs, spermicides and vaginal gels, as well as hormonal products such as pills, patches, vaginal rings and injectables.

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Sildenafil Cream, 3.6% has the potential to be the first FDA-approved product for the treatment of FSAD.

DARE-HRT1, if approved as a treatment for moderate to severe VMS due to menopause, will compete with the many products on the market targeted or FDA-approved for the treatment of menopausal symptoms, including VMS.

Such products include hormone therapies in the form of pills, patches and creams, some of which are FDA-approved products and others which are prepared in compounding pharmacies.

We expect the options for hormone therapy to continue to expand with time.

We believe DARE-HRT1 has the potential to address a preference among some women and health care providers for bio-identical hormones delivered in a non-oral route, as well as offer convenience compared to existing FDA-approved hormone therapies in that one IVR is designed to deliver the bio-identical hormones over 28 days without any daily intervention.

Over the longer term, our ability, independently or otherwise, to successfully develop, manufacture, market, distribute and sell any approved products, expand their usage or bring additional new products to the marketplace will depend on many factors, including, but not limited to, FDA and foreign regulatory agency approval of new products and of new indications for existing products, the efficacy and safety of our products (alone and relative to other treatment options), the degree of patent or other protection afforded to particular products, and reimbursement for use of those products.

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generally involves some or all of the following key steps:

• completion of nonclinical studies, such as laboratory tests, animal studies, and formulation studies, performed in compliance with FDA regulations for good laboratory practices, or GLPs, and other applicable regulations;

• completion of nonclinical studies, such as laboratory tests, potentially animal studies, and formulation studies, performed in compliance with FDA regulations for good laboratory practices, or GLPs, and other applicable regulations;

• design of a clinical protocol and its submission to the FDA as part of an IND, which must become effective before human clinical trials may begin;

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Preclinical studies include laboratory evaluation of product chemistry, toxicity and formulation, as well as animal studies to assess potential safety and efficacy.

Preclinical tests intended for submission to the FDA to support the safety of a product candidate must be conducted in compliance with GLP regulations and the United States Department of Agriculture’s Animal Welfare Act, if applicable.

A drug sponsor must submit the results of the preclinical

tests, together with manufacturing information, analytical data and any available clinical data or literature, among other things, to the FDA as part of an IND.

The Consolidated Appropriations Act for 2023, signed into law on December 29, 2022, (P.L.

117-328) amended the FDCA to specify that nonclinical testing for drugs may, but is not required to, include in vivo animal testing.

According to the amended language, a sponsor may fulfill nonclinical testing requirements by completing various in vitro assays (e.g., cell-based assays, organ chips, or microphysiological systems), in silico studies (i.e., computer modeling), other human or non-human biology-based tests (e.g., bioprinting), or in vivo animal tests.

Nonclinical tests intended for submission to the FDA to support the safety of a product candidate must be conducted in compliance with GLP regulations and the United States Department of Agriculture’s Animal Welfare Act, if applicable.

A drug sponsor must submit the results of the preclinical tests, together with manufacturing information, analytical data and any available clinical data or literature, among other things, to the FDA as part of an IND.

Some nonclinical testing may continue after the IND is submitted.

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Generally, pivotal trials are Phase 3 trials, but they may be Phase 2 trials if the design provides a well-controlled and reliable assessment of clinical benefit, particularly in an area of unmet medical need.

Congress also recently amended the FDCA, as part of the Consolidated Appropriations Act for 2023, in order to require sponsors of a Phase 3 clinical trial, or other “pivotal study” of a new drug to support marketing authorization, to design and submit a diversity action plan for such clinical trial.

The action plan must include the sponsor’s diversity goals for enrollment, as well as a rationale for the goals and a description of how the sponsor will meet them.

Sponsors must submit a diversity action plan to the FDA by the time the sponsor submits the relevant clinical trial protocol to the agency for review.

The FDA may grant a waiver for some or all of the requirements for a diversity action plan.

It is unknown at this time how the diversity action plan may affect Phase 3 trial planning and timing or what specific information FDA will expect in such plans, but if the FDA objects to a sponsor’s diversity action plan or otherwise requires significant changes to be made, it could delay initiation of the relevant clinical trial.

Clinical trials must be conducted under the supervision of one or more qualified investigators in accordance with the FDA’s GCP requirements.

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An institutional review board, or IRB, is responsible for ensuring that human subjects in clinical studies are protected from inappropriate study risks.

An IRB at each institution participating in the clinical trial must review and approve the protocol before a clinical trial commences at that institution and must also approve the information regarding the trial and the consent form that must be provided to each research subject or the subject’s legal representative, monitor the

trial until completed and otherwise comply with IRB regulations.

The IRB also may halt a study, either temporarily or permanently, for failure to comply with GCP or the IRB’s requirements, or if the investigational new drug has been associated with unexpected serious harm to patients.

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The FDA adjusts the PDUFA user fees on an annual basis.

PDUFA also imposes an annual program fee for prescription drug products.

PDUFA also imposes an annual program fee for marketed prescription drug products.

Fee waivers or reductions are available in certain circumstances, such as where a waiver is necessary to protect the public health, where the fee would present a significant barrier to innovation, or where the applicant is a small business submitting its first human therapeutic application for review.

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A Section 505(b)(2) applicant may eliminate or reduce the need to conduct certain pre-clinical or clinical studies, if it can establish that reliance on studies conducted for a previously-approved product is scientifically appropriate.

The FDA may also require companies to perform additional studies or measurements, including nonclinical and clinical studies,

to support the change from the approved product.

The FDA may also require companies to perform additional studies or measurements, including nonclinical and clinical studies, to support the change from the approved product.

The FDA may then approve the new product candidate for all or some of the labeled indications for which the referenced product has been approved, as well as for any new indication for which the Section 505(b)(2) NDA applicant has submitted data.

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The FDA may impose restrictions and conditions on product distribution, prescribing, or dispensing in the form of a REMS plan, or otherwise limit the scope of any approval.

In addition, the FDA may require post marketing clinical trials, sometimes referred to as “Phase 4” clinical trials, designed to further assess a product’s safety and effectiveness, and/or testing and surveillance programs to monitor the safety of approved products that

have been commercialized.

After approval, some types of changes to the approved product, such as adding new indications, manufacturing changes and additional labeling claims, are subject to further testing requirements and FDA review and approval.

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Following approval of a new drug product, the manufacturer and the approved drug are subject to pervasive and continuing regulation by the FDA, including, among other things, monitoring and recordkeeping activities, reporting of adverse experiences with the product, product sampling and distribution restrictions, complying with promotion and advertising requirements, which include restrictions on promoting drugs for unapproved uses or patient populations (i.e., “off-label use”) and limitations on industry-sponsored scientific and educational activities.

Although physicians may prescribe legally available products for off-label uses, manufacturers may not market or promote such uses.

physicians may prescribe legally available products for off-label uses, manufacturers may not market or promote such uses.

The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses, and a company that is found to have improperly promoted off-label uses may be subject to significant liability.

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Even if such trials are conducted, the FDA may not approve any expansion of the labeled indications for use in a timely fashion, or at all.

There also are continuing, annual user fee requirements for that are now assessed as program fees for certain NDA-approved drugs.

In addition, FDA regulations require that products be manufactured in specific approved facilities and in accordance with cGMP.

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The Prescription Drug Marketing Act of 1987, or PDMA, was the first federal law to set minimum standards for the registration and regulation of drug distributors by the states and to regulate the distribution of drug samples.

Today, both the PDMA and state laws limit the distribution of prescription pharmaceutical product samples and impose

requirements to ensure accountability in distribution.

Congress more recently enacted the Drug Supply Chain Security Act, or DSCSA, which made significant amendments to the FDCA, including by replacing certain provisions from the PDMA pertaining to wholesale distribution of prescription drugs with a more comprehensive statutory scheme.

The DSCSA now requires uniform national standards for wholesale distribution and, for the first time, for third-party logistics providers;

it also provides for preemption of certain state laws in the areas of licensure and prescription drug traceability.

The comprehensive system envisioned by this law is being implemented both by the FDA and those various stakeholders towards the shared goal of building an interoperable electronic system to identify and trace prescription drugs distributed in the United States for enhanced supply chain security.

Today, both the PDMA and state laws limit the distribution of prescription pharmaceutical product samples and impose requirements to ensure accountability in distribution.

More recently, the Drug Supply Chain Security Act, or DSCSA, was enacted with the aim of building an electronic system to identify and trace certain prescription drugs distributed in the United States.

The DSCSA mandates phased-in and resource-intensive obligations for pharmaceutical manufacturers, repackagers, wholesale distributors, and dispensers (primarily pharmacies) over a 10-year period that is expected to culminate in November 2023.

It also replaced certain provisions from the PDMA pertaining to wholesale distribution of prescription drugs with a more comprehensive statutory scheme, requiring uniform national standards for wholesale distribution and, for the first time, for third-party logistics providers.

In February 2022, the FDA released proposed regulations to amend the existing national standards for licensing of wholesale drug distributors by the

states (which had been promulgated under the PDMA);

to establish new minimum standards for state licensing third-party logistics providers;

and to create a federal system for licensure for use in the absence of a state program, each of which is mandated by the DSCSA.

From time to time, new legislation and regulations may be implemented that could significantly change the statutory provisions governing the approval, manufacturing, and marketing of prescription drug products regulated by the FDA .

FDA Review and Approval of Medical Devices

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the agency also monitors reports of cybersecurity risks as part of its post-marketing device surveillance activities.

In addition, as part of the Consolidated Appropriations Act for 2023, Congress created new premarket requirements for developers of “cyber devices,” defined as medical devices that include software, connect to the internet, and contain any technological features that could be vulnerable to cybersecurity threats.

Medical devices are classified into one of three classes on the basis of the controls deemed by the FDA to be necessary to reasonably assure their safety and effectiveness.

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All Class III devices must be reviewed and approved by the FDA through the PMA process.

A PMA must be supported by extensive data including, but not limited to, technical data, nonclinical studies, clinical trials, manufacturing and labeling to demonstrate to the FDA’s satisfaction the safety and effectiveness of the device for its intended use.

A PMA must be

supported by extensive data including, but not limited to, technical data, nonclinical studies, clinical trials, manufacturing and labeling to demonstrate to the FDA’s satisfaction the safety and effectiveness of the device for its intended use.

After a PMA is submitted and the FDA determines the application is sufficiently complete, the agency will accept it for filing and begin an in-depth review of the submitted information.

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FDASIA streamlined the De Novo classification pathway by permitting manufacturers to request De Novo classification directly without first submitting a 510(k) premarket notification to the FDA and receiving a not substantially equivalent determination.

Under the provisions enacted under FDASIA, the FDA is required to classify the device within 120 days following receipt of the De Novo application however, the most recent FDA premarket review goals state that in fiscal year 2022, FDA will attempt to issue a decision on 70% of all De Novo classification requests received within 150 days of receipt.

The FDA is required under the statute to classify the device within 120 days following receipt of the De Novo application however, the most recent FDA premarket review goals state that in fiscal year 2023, FDA will attempt to issue a decision on 70% of all De Novo classification requests received within 150 days of receipt.

If the manufacturer seeks reclassification into Class II, the manufacturer must include a draft proposal for special controls that are necessary to provide a reasonable assurance of the safety and effectiveness of the medical device.

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Generally, clinical trials for a significant risk device may begin once the IDE is approved by the FDA and the study protocol and informed consent form are approved by a duly-appointed IRB at each clinical trial site.

A diversity action plan will be required for most clinical studies of investigational medical devices intended to support marketing authorization as a result of the December 2022 FDCA amendments.

FDA’s IDE regulations govern investigational device labeling, prohibit promotion, and specify an array of GCP requirements, which include, among other things, recordkeeping, reporting and monitoring responsibilities of study sponsors and study investigators.

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Failure to timely register a covered clinical study or to submit study results as provided for in the law can give rise to civil monetary penalties and also prevent the non-compliant party from receiving future grant funds from the federal government.

The NIH’s Final Rule on ClinicalTrials.gov registration and reporting requirements became effective in 2017, and both NIH and the FDA have recently begun enforcing those requirements against non-compliant clinical trial sponsors.

The NIH’s Final Rule on ClinicalTrials.gov registration and reporting requirements became effective in 2017, and the government has recently begun enforcing those requirements against non-compliant clinical trial sponsors.

Health Care Laws and Compliance Requirements

In addition to FDA requirements, several other types of state and federal laws apply and will apply to our operations.

These laws include, among others, health care information and data privacy protection laws, transparency laws, and fraud and abuse laws, such as:

As we are commercializing XACIATO and may commercialize other product candidates, if approved, we are subject to additional health care statutory and regulatory requirements and enforcement by federal government and the states and foreign governments in the jurisdictions in which we conduct our business.

Health care providers, physicians and third-party payors play a primary role in the recommendation and prescription of any product candidates for which we may obtain marketing approval.

Arrangements we may enter into with third-party payors or other customers expose us to broadly applicable fraud and abuse and other health care laws and regulations that constrain the business or financial arrangements and relationships through which we market, sell, and distribute any products for which we obtain marketing approval.

Violations of the fraud and abuse laws, or other health care laws, are punishable by criminal and civil sanctions, including, in some instances, the possibility of exclusion from participation in federal and state health care programs, (including Medicare and Medicaid), and corporate integrity agreements, which impose, among other things, rigorous operational and monitoring requirements on companies.

Similar sanctions and penalties also may be imposed upon executive officers and employees, including criminal sanctions against executive officers under the so-called “responsible corporate officer” doctrine, even in situations where the executive officer did not intend to violate the law and was unaware of any wrongdoing.

Given the penalties that may be imposed on companies and individuals if convicted, allegations of such violations often result in settlements even if the company or individual being investigated admits no wrongdoing.

Settlements often include significant civil sanctions, including fines and civil monetary penalties, and corporate integrity agreements.

If the government was to allege or convict us or our executive officers, employees or consultants of violating these laws, our business could be harmed.

In addition, private individuals have the ability to bring similar actions under some of the fraud and abuse laws described below.

Our activities could be subject to challenge for the reasons discussed above and due to the broad scope of these laws and extensive enforcement of them by law enforcement authorities.

Further, federal and state laws that require manufacturers to make reports on pricing and marketing information could subject us to penalty provisions.

These applicable health care industry laws include, among others, health care information and data privacy and security laws, transparency laws, and fraud and abuse laws, such as:

• The federal Anti-Kickback Statute prohibits, among other things, any person from knowingly and willfully offering, providing, soliciting or receiving remuneration, directly or indirectly, overtly or covertly, in cash or in kind, to induce either the referral of an individual, for an item or service or the purchasing or ordering of a good or service, for which payment may be made under federal health care programs such as the Medicare and Medicaid programs.

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In the past, the government has enforced the federal Anti-Kickback Statute to reach large settlements with health care companies based on sham consulting and other financial arrangements with physicians.

A person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation.

A person or entity does not need to have actual knowledge of the statute or specific intent to violate it in

order to have committed a violation.

In addition, the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the civil False Claims Act;

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Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation;

• The Physician Payments Sunshine Act, enacted as part of the ACA (defined below), among other things, imposes reporting requirements on manufacturers of FDA-approved drugs, devices, biologics and medical supplies covered by Medicare or Medicaid to report, on an annual basis, to the Centers for Medicare & Medicaid Services, or CMS, information related to payments and other transfers of value to physicians (defined to include doctors, dentists, optometrists, podiatrists, chiropractors and, beginning in 2022 for payments and other transfers of value provided in the previous year, certain advanced non-physician health care practitioners) and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members in such manufacturers;

Among other things, HITECH makes HIPAA’s privacy and security standards directly applicable to “business associates,” defined as independent contractors or agents of covered entities, which include certain health care providers, health plans, and health care clearinghouses, that create, receive, maintain or transmit protected health information in connection with providing a service for or on behalf of a covered entity.

HITECH also increased the civil and criminal penalties that may be imposed against covered entities, business associates and possibly other persons, and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce HIPAA and seek attorney’s fees and costs associated with pursuing federal civil actions;

• The Physician Payments Sunshine Act, enacted as part of the ACA (defined below), among other things, imposes reporting requirements on manufacturers of FDA-approved drugs, devices, biologics and medical supplies covered by Medicare or Medicaid to report, on an annual basis, to the Centers for Medicare & Medicaid Services, or CMS, information related to payments and other transfers of value to physicians (defined to include doctors, dentists, optometrists, podiatrists, and chiropractors), certain advanced non-physician health care practitioners, and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members in such manufacturers;

• HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, or HITECH, and their respective implementing regulations impose specified requirements relating to the privacy, security and electronic exchange of individually identifiable health information (called "protected health information" under HIPAA) as well as requirements for notification to affected individuals and the government in the event of a breach.

Among other things, HITECH makes certain of HIPAA’s privacy and all of HIPAA's security standards directly applicable to “business associates,” defined as independent contractors or agents of "covered entities," or organizations subject to HIPAA which include certain health care providers, health plans, and health care clearinghouses.

Business associates create, receive, maintain or transmit protected health information in connection with providing a service for or on behalf of a covered entity.

HITECH also increased the civil and criminal penalties that may be imposed against covered entities, business associates and created penalties for third parties that unlawfully acquire protected health information.

HITECH also gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce HIPAA and seek attorney’s fees and costs associated with pursuing federal civil actions;

• State and local laws which require the registration of pharmaceutical sales representatives.

The majority of states also have statutes or regulations similar to the aforementioned federal anti-kickback and false claims laws, which apply to items and services reimbursed under Medicaid and other state programs, or, in several states, apply regardless of the payor.

We may be subject to state laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.

In addition, we may be subject to reporting requirements under state transparency laws, as well as state laws that require pharmaceutical companies to comply with the industry’s voluntary compliance guidelines and the applicable compliance guidance promulgated by the federal government that otherwise restricts certain payments that may be made to health care providers and entities.

Moreover, in November 2020, the U.S.

Department of Health and Human Services finalized significant changes to the regulations implementing the Anti-Kickback Statute and the civil monetary penalty rules regarding beneficiary inducements, with the goal of offering the health care industry more flexibility and reducing the regulatory burden associated with those fraud and abuse laws, particularly with respect to value-based arrangements among industry participants.

To the extent we commercialize or co-promote our products, if approved, and because such products could be reimbursed under federal and other governmental health care programs, we expect to develop a compliance program that establishes internal controls to facilitate adherence to the rules and health care program requirements.

Under our exclusive license agreement with Organon, Organon is solely responsible for commercializing, promoting, determining pricing, and negotiating reimbursement matters related to XACIATO.

Organon also assumed

responsibility to maintain and enforce a compliance and ethics program containing adequate systems, policies and procedures to facilitate adherence to the rules and health care program requirements with respect to XACIATO.

To the extent we commercialize or co-promote our products, if approved, and because such products could be reimbursed under federal and other governmental health care programs, we are developing an appropriate compliance program, commensurate to the limited commercial activities in which we engage, that establishes internal controls to facilitate adherence to the rules and health care program requirements.

Although compliance programs and adherence thereto may mitigate the risk of violation of and subsequent investigation and prosecution for violations of the laws described above, the risks cannot be eliminated entirely.

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It is possible that governmental authorities will conclude that our business practices do not comply with current or future statutes, regulations, agency guidance or case law involving applicable fraud and abuse or other health care laws and regulations.

If we or our operations are found to be in violation of any of the laws described above or any other governmental regulations that apply to us, we may be subject to significant civil, criminal and administrative penalties, including monetary damages, fines, individual imprisonment, disgorgement, loss of eligibility to obtain approvals from the FDA, exclusion from participation in government contracting, health care reimbursement or other government programs, including Medicare and Medicaid, contractual damages, reputational harm, administrative burdens, diminished profits and future earnings, additional reporting requirements if we become subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance with any of these laws, and/or the curtailment or restructuring of our operations.

If any of the physicians or other health care providers or entities with whom we expect to do business is found to be not in compliance with applicable laws, they may be subject to criminal, civil or administrative sanctions, including exclusions from government funded health care programs.

Moreover, if any of the physicians or other health care providers or entities with whom we expect to do business is found to be not in compliance with applicable laws, they may be subject to criminal, civil or administrative sanctions, including exclusions from government funded health care programs.

Coverage, Pricing, and Reimbursement

Sales of our drug and drug-device combination products, if approved, will depend, in part, on the extent to which the costs of our products will be covered by third-party payors, such as government health care programs,

private health insurers, managed health care providers, and other organizations.

These third-party payors are increasingly challenging drug prices and examining the medical necessity and cost-effectiveness of medical products and services, in addition to their safety and efficacy.

If these third-party payors do not consider our products to be cost-effective compared to other therapies, they may not cover our products after approval as a benefit under their plans or, even if they do, the level of payment may not be sufficient to allow us to sell our products on a profitable basis.

Organon has the sole responsibility to negotiate reimbursement approvals from government health care programs and to determine pricing and terms of sale of XACIATO.

Significant uncertainty exists as to the reimbursement status for newly approved prescription products, including coding, coverage and payment.

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In the United States, third-party payors often rely upon Medicare coverage policy and payment limitations in setting their own reimbursement policies, but they also have their own methods and approval process apart from Medicare coverage and reimbursement determinations.

Accordingly, one third-party payor’s determination to provide coverage for a product does not assure that other payors will also provide coverage for the product.

One third-party payor’s determination to provide coverage for a product does not assure that other payors will also provide coverage for the product.

Accordingly, the coverage determination process is often a time-consuming and costly process that will require us to provide scientific and clinical support for the use of our products to each payor separately, with no assurance that coverage and adequate payment will be applied consistently or granted at all.

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Congressional inquiries and proposed bills designed to, among other things, bring more transparency to drug pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drugs.

In August 2022, President Biden signed into the law the Inflation Reduction Act of 2022, or the IRA, which includes (among other things) multiple provisions that may impact the prices of drug products that are both sold into the Medicare program and throughout the United States.

Starting in 2023, a manufacturer of drug products covered by Medicare Parts B or D must pay a rebate to the federal government if their drug product’s price increases faster than the rate of inflation.

This calculation is made on a drug product by drug product basis and the amount of the rebate owed to the federal government is directly dependent on the volume of a drug product that is paid for by Medicare Parts B or D.

Additionally, starting for payment year 2026, CMS will negotiate drug prices annually for a select number of single source Part D drugs without generic competition.

CMS will also negotiate drug prices for a select number of Part B drugs starting for payment year 2028.

If a drug product is selected by CMS for negotiation, it is expected that the revenue generated from such drug will decrease.

CMS has begun to implement these new authorities but their impact on the pharmaceutical industry in the United States remains uncertain.

We expect that federal, state and local governments in the U.S.

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In December 2020, the U.S.

Supreme Court held unanimously that federal law does not preempt the states’ ability to regulate pharmaceutical benefit managers, or PBMs, and other members of the health care and pharmaceutical supply chain, an important decision that may lead to further and more aggressive efforts by states in this area.

Supreme Court held unanimously that federal law does not preempt the states’ ability to regulate pharmacy benefit managers, or PBMs, and other members of the health care and pharmaceutical supply chain, an important decision that appears to be leading to further and more aggressive efforts by states in this area.

The Federal Trade Commission in mid-2022 also launched sweeping investigations into the practices of the PBM industry that could lead to additional federal and state legislative or regulatory proposals targeting such entities’ operations, pharmacy networks, or financial arrangements.

Significant efforts to change the PBM industry as it currently exists in the U.S.

may affect the entire pharmaceutical supply chain and the business of other stakeholders, including medical product developers like us.

The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010, collectively referred to as the ACA, enacted in March 2010, has had and is expected to continue to have a significant impact on the health care industry.

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The ACA also increased the Medicaid rebate rate and the volume of rebated drugs has been expanded to include beneficiaries in Medicaid managed care organizations.

The ACA also expanded the 340B drug discount program (excluding orphan drugs), including a 50% discount on brand name drugs for Medicare Part D participants in the coverage gap, and revised the definition of “average manufacturer price” for reporting purposes, which could increase the amount of the Medicaid

drug rebates paid to states.

It also contains substantial provisions intended to broaden access to health insurance, reduce or constrain the growth of health care spending, enhance remedies against health care fraud and abuse, add new transparency requirements for the health care industry, impose new taxes and fees on pharmaceutical manufacturers, and impose additional health policy reforms, any or all of which may affect our business.

Since enactment of the ACA, there have been judicial and Congressional challenges to certain aspects of the ACA, and as a result certain sections of the ACA have not been fully implemented or have been effectively repealed through Executive Orders and/or executive agency actions.

However, following several years of litigation in the federal courts, in June 2021, the U.S.

Supreme Court upheld the ACA when it dismissed a legal challenge to the ACA’s constitutionality.

Further legislative and regulatory changes under the ACA remain possible, although the new federal administration under President Biden has signaled that it plans to build on the ACA and expand the number of people who are eligible for health insurance subsidies under it.

It is unknown what form any such changes or any law would take, and how or whether it may affect the biopharmaceutical industry as a whole or our business in the future.

We expect that changes or additions to the ACA, the Medicare and Medicaid programs, such as changes allowing the federal government to directly negotiate drug prices, and changes stemming from other healthcare reform measures, especially with regard to healthcare access, financing or other legislation in individual states, could have a material adverse effect on the health care industry in the United States.

Other legislative changes have also been proposed and adopted since the ACA was enacted.

These changes include aggregate reductions to Medicare payments to providers of up to 2% per fiscal year pursuant to the Budget Control Act of 2011, which began in 2013 and will remain in effect through 2030 unless additional Congressional action is taken.

The Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act, which was signed into law on March 27, 2020 and was designed to provide financial support and resources to individuals and businesses affected by the COVID-19 pandemic, suspended the 2% Medicare sequester from May 1, 2020 through December 31, 2020 (the suspension was subsequently extended through March 31, 2022, with a reduction of the suspension to 1% sequester through June 30, 2022), and extended the sequester by one year, through 2030, in order to offset the added expense of the 2020 cancellation.

The 2021 Consolidated Appropriations Act was subsequently signed into law on December 27, 2020 and extends the CARES Act suspension period to March 31, 2021.

The Biden Administration, which assumed control of the Executive Branch on January 20, 2021, has indicated that lowering prescription drug prices is a priority.

For example, in July 2021, President Biden issued a sweeping executive order on promoting competition in the American economy that includes several mandates pertaining to the pharmaceutical and health care insurance industries.

Among other things, the executive order directs the FDA to work towards implementing a system for importing drugs from Canada (following on a Trump administration notice-and-comment rulemaking on Canadian drug importation that was finalized in October 2020).

The Biden order also called on HHS to release a comprehensive plan to combat high prescription drug prices, and it includes several directives regarding the Federal Trade Commission’s oversight of potentially anticompetitive practices within the pharmaceutical industry.

The drug pricing plan released by HHS in September 2021 in response to the executive order makes clear that the Biden Administration supports aggressive action to address rising drug prices, including allowing HHS to negotiate the cost of Medicare Part B and D drugs, but such significant changes will require either new legislation to be passed by Congress or time-consuming administrative actions.

Further legislative and regulatory changes under the ACA remain possible, although it is unknown what form any such changes or any law would take, and how or whether it may affect the biopharmaceutical industry as a whole or our business in the future.

It is uncertain whether and how future legislation or regulatory changes could affect prospects for our product candidates or what actions federal, state, or commercial payors for pharmaceutical products may take in response to any such health care reform proposals or legislation.

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Data Privacy and the Protection of Personal Information

We are subject to laws and regulations governing data privacy and the protection of personal information including health information.

We are subject to numerous laws and regulations governing data privacy and the protection of personal information of patients, clinical investigators, employees, and vendors/business contacts including in relation to medical records and other health information, credit card data and financial information.

The legislative and regulatory landscape for privacy and data protection continues to evolve, and there has been an increasing focus on privacy and data protection issues which will continue to affect our business.

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These laws overlap and often conflict and each of these laws is subject to varying interpretations by courts and government agencies, creating complex compliance issues.

If we fail to comply with applicable laws and regulations we could be subject to penalties or sanctions, including criminal penalties.

If we fail to comply with applicable laws and regulations

we could be subject to penalties or sanctions, including criminal penalties as well as reputational harm.

Our customers and research partners must comply with laws governing the privacy and security of health information, including HIPAA, HITECH and state health information privacy laws.

If we knowingly obtain health information that is protected under HIPAA, called “protected health information,” our customers or

research collaborators may be subject to enforcement and we may have direct liability for the unlawful receipt of protected health information or for aiding and abetting a HIPAA violation.

If we knowingly obtain protected health information without the authority to do so, our customers or research collaborators may be subject to enforcement and we may have direct liability for the unlawful receipt of protected health information or for aiding and abetting a HIPAA violation.

State laws protecting health and personal information are becoming increasingly stringent.

For example, California has implemented the California Confidentiality of Medical Information Act that imposes restrictive requirements regulating the use and disclosure of health information and other personally identifiable information, and California has recently adopted the California Consumer Privacy Act of 2018, or CCPA.

For example, California has implemented the California Confidentiality of Medical Information Act that imposes restrictive requirements regulating the use and disclosure of health information and other personally identifiable information, and California has adopted the California Consumer Privacy Act of 2018, or CCPA, which went into effect in January of 2020.

The CCPA mirrors a number of the key provisions of the European General Data Protection Regulation, or GDPR, described below.

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Additionally, a new privacy law, the California Privacy Rights Act, or CPRA, was approved by California voters in the election on November 3, 2020.

The CPRA will modify the CCPA significantly, potentially resulting in further uncertainty, additional costs and expenses in an effort to comply and additional potential for harm and liability for failure to comply.

The CPRA went into effect in January of 2023, modifying the CCPA significantly, potentially resulting in further uncertainty, additional costs and expenses in an effort to comply and additional potential for harm and liability for failure to comply.

Among other things, the CPRA established a new regulatory authority, the California Privacy Protection Agency, which will be enacting new regulations and will have expanded enforcement authority.

Other states in the U.S.

are considering privacy laws similar to CCPA.

In February 2021, the Virginia legislature became the second to enact a state-specific law called the Consumer Data Protection Act, which includes key differences from California’s law, further complicating compliance by industry and other stakeholders.

In Virginia and Colorado enacted similar data protection laws and other U.S.

states have proposals under consideration, increasing the regulatory compliance risk.

Health Care Reform and Potential Changes to Laws and Regulations

In the United States and some foreign jurisdictions, there have been, and continue to be, several legislative and regulatory changes and proposed changes regarding the healthcare system that could prevent or delay marketing approval of product candidates, restrict or regulate post-approval activities, and affect the ability to profitably sell product candidates that obtain marketing approval.

FDA and other regulatory authority policies may change and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of our product candidates.

For example, in August 2017, the FDA Reauthorization Act was signed into law, which reauthorized the FDA’s user fee programs and included additional drug and device provisions that build on the Cures Act enacted in December 2016.

Furthermore, the next FDA Reauthorization Act is currently being negotiated and is due to be submitted to Congress in 2022.

If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we otherwise may have obtained and we may not achieve or sustain profitability, which would adversely affect our business, prospects, financial condition and results of operations.

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In addition to the sweeping reforms contained in the ACA (summarized above in the section entitled “Coverage, Pricing, and Reimbursement”), other legislative changes have been proposed and adopted in the United States that may affect health care expenditures.

For example, the 2020 Consolidated Appropriations Act (P.L.

116-94) included a piece of bipartisan legislation called the Creating and Restoring Equal Access to Equivalent Samples Act, or the CREATES Act.

The CREATES Act aims to address the concern articulated by both the FDA and others in the industry that some brand manufacturers have improperly restricted the distribution of their products, including by invoking the existence of a REMS program for certain products, to deny generic product developers access to samples of brand products.

Because generic product developers need samples to conduct certain comparative testing required by the FDA, some have attributed the inability to timely obtain samples as a cause of delay in the entry of generic products.

To remedy this concern, the CREATES Act establishes a private cause of action that permits a generic product developer to sue the brand manufacturer to compel it to furnish the necessary samples on “commercially reasonable, market-based terms.” Whether and how generic product developments will use this new pathway, as well as the likely outcome of any legal challenges to provisions of the CREATES Act, remain highly uncertain and its potential effects on our future commercial products are unknown.

In addition to the IRA's drug price negotiation provisions, discussed above, President Biden's Executive Order 14087, issued October 2022, called for CMS to prepare and submit a report to the White House on potential payment and delivery modes that would complement to IRA, lower drug costs, and promote access to innovative drugs.

As of mid-January 2023 the report had not been released but it is expected to further inform the current Administration's priorities and activities in this area.

Other new laws may result in additional reductions in Medicare and other health care funding, which could have an adverse effect on customers for our approved product and, accordingly, our financial operations.

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Also similar to the United States, when a drug-device combination product’s principal intended action is accomplished by the drug constituent part, the EU regulates the combination product as a medicinal product.

Pursuant to the European Clinical Trials Directive, a system for the approval of clinical trials in the EU has been implemented through national legislation of the member states.

Under this system, an applicant must obtain approval from the competent national authority of an EU member state in which the clinical trial is to be conducted.

Furthermore, the applicant may only start a clinical trial after a competent ethics committee has issued a favorable opinion.

Clinical trial applications must be accompanied by an investigational medicinal product dossier with supporting information prescribed by the European Clinical Trials Directive and corresponding national laws of the member states and further detailed in applicable guidance documents.

Pursuant to the European Clinical Trials Directive, a system for the approval of clinical trials in the EU had been implemented through national legislation of the member states.

Under the previous system, an applicant obtained approval from the competent national authority of an EU member state in which the clinical trial was conducted.

Furthermore, the applicant could only start a clinical trial after a competent ethics committee had issued a favorable opinion.

In April 2014, the new Clinical Trials Regulation, (EU) No 536/2014 (Clinical Trials Regulation) was adopted and became effective on January 31, 2022.

The Clinical Trials Regulation will be directly applicable in all the EU Member States, repealing the current Clinical Trials Directive 2001/20/EC.

Conduct of all clinical trials performed in the EU will continue to be bound by currently applicable provisions until the new Clinical Trials Regulation becomes applicable.

The extent to which ongoing clinical trials will be governed by the Clinical Trials Regulation will depend on when the Clinical Trials Regulation becomes applicable and on the duration of the individual clinical trial.

The Clinical Trials Regulation is directly applicable in all the EU Member States, repealing the current Clinical Trials Directive 2001/20/EC.

The extent to which ongoing clinical trials will be governed by the Clinical Trials Regulation depends on when the Clinical Trials Regulation becomes applicable and on the duration of the individual clinical trial.

If a clinical trial continues for more than three years from the day on which the Clinical Trials Regulation becomes applicable the Clinical Trials Regulation will at that time begin to apply to the clinical trial.

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The main characteristics of the regulation include:

a streamlined application procedure via a single entry point, the “EU portal”;

a single set of documents to be prepared and submitted for the application as well as simplified reporting procedures for clinical trial sponsors;

and a harmonized procedure for the assessment of applications for clinical trials, which is divided in two parts.

Part I is assessed by the competent authorities of all EU Member States in which an application for authorization of a clinical trial has been submitted (Member States concerned).

Part II is assessed separately by each Member State concerned.

Strict deadlines have been established for the assessment of clinical trial applications.

The role of the relevant ethics committees in the assessment procedure will continue to be governed by the national law of the concerned EU Member State.

However, overall related timelines will be defined by the Clinical Trials Regulation.

To obtain marketing approval of a drug in the EU, an applicant must submit an marketing authorization application (“MAA”) either under a centralized or decentralized procedure.

a streamlined application procedure via a single entry point, the “EU portal” called the Clinical Trial Information System, or CTIS;

a single set of documents to be

prepared and submitted for the application as well as simplified reporting procedures for clinical trial sponsors;

and a harmonized procedure for the assessment of applications for clinical trials.

Use of the CTIS became mandatory for new clinical trial application submissions as of February 1, 2023.

To obtain marketing approval of a drug in the EU, an applicant must submit a marketing authorization application (“MAA”) either under a centralized or decentralized procedure.

The centralized procedure provides for the grant of a single marketing authorization by the European Commission that is valid for all EU member states, Iceland, Lichtenstein and Norway.

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Devices that comply with the requirements of a relevant directive are entitled to bear the CE conformity marking, indicating that the device conforms to the essential requirements of the applicable directives.

The method of assessing conformity depended on the class of the product, but normally involved a combination of self-assessment by the manufacturer and a third-party assessment by a “Notified Body.” This third-party assessment may consist of an audit of the manufacturer’s quality system and specific testing of the manufacturer’s product.

The method of assessing conformity depended on the class of the product, but normally involved a combination of self-assessment by the manufacturer

and a third-party assessment by a “Notified Body.” This third-party assessment may consist of an audit of the manufacturer’s quality system and specific testing of the manufacturer’s product.

In 2017, European Union regulatory bodies finalized a new Medical Device Regulation (“MDR”), which replaced the existing MDD framework and provided three years for transition and compliance, for a final effective date of May 26, 2020.

As a result of the COVID-19 pandemic, however, the European Parliament voted in April 2020 to postpone implementation of the MDR by one year, giving the medical device industry and Notified Bodies until May 26, 2021 to come into compliance.

The MDR changes several aspects of the existing regulatory framework for medical device marketing in Europe and is expected to result in increased regulatory oversight of all medical devices marketed in the EU, which may, in turn, increase the costs, time and requirements that need to be met in order to place an innovative or high-risk medical device on the European market.

Specifically, the MDR will require changes in the clinical evidence required for medical devices, post-market clinical follow-up evidence, annual reporting of safety information for Class III products, and bi-annual reporting for Class II products, unique device identification, or UDI, for all products, submission of core data elements to a European UDI database prior to placement of a device on the market, reclassification of medical devices, and multiple other labeling changes.

An assessment by a Notified Body of one country within the European Union and designated under the MDR is required in order for a manufacturer to commercially distribute the product throughout the EU.

As a result of the COVID-19 pandemic, however, implementation of the MDR was postponed by one year, giving the medical device industry and Notified Bodies until May 26, 2021 to come into compliance.

The MDR changed several aspects of the existing regulatory framework for medical device marketing in Europe and increased regulatory oversight of all medical devices marketed in the EU, which may, in turn, increase the costs, time and requirements that need to be met in order to place an innovative or high-risk medical device on the European market.

Specifically, the MDR requires post-market clinical follow-up evidence for medical devices, annual reporting of safety information for Class III products, and bi-annual reporting for Class II products, unique device identification, or UDI, for all products, submission of core data elements to a European UDI database prior to placement of a device on the market, reclassification of medical devices, and multiple other labeling changes.

A CE certificate issued under the MDD before May 26, 2021 may remain valid until May 25, 2024 under certain conditions.

However, we must acquire approvals under the MDR for new products and renew our existing CE mark certificates once our current certifications expire, which could be challenging and costly.

Longer transition periods for various medical device risk classes were proposed by the European Commission in January 2023 in order to mitigate the risk of device shortages in the EU.

As a new market entrant, however, the transition provisions do not apply to our business and we must acquire approvals under the MDR for new products, which could be challenging and costly.

Review and Approval of Medicinal Products in Canada

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Regulatory obligations and oversight continue following the initial market approval of a pharmaceutical product.

For example, every market authorization holder must report any new information received concerning adverse drug reactions, including timely reporting of serious adverse drug reactions that occur in Canada and any

serious unexpected adverse drug reactions that occur outside of Canada.

The market authorization holder must also notify Health Canada of any new safety and efficacy issues that it becomes aware of after the launch of a product.

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This is because the GDPR allows EU member states to derogate from the requirements of the GDPR mainly in regard to specific processing situations (including special category data and processing for scientific or statistical purposes).

As the EU states

continue to reframe their national legislation to harmonize with the GDPR, we will need to monitor compliance with all relevant EU member states’ laws and regulations, including where permitted derogations from the GDPR are introduced.

As the EU states continue to reframe their national legislation to harmonize with the GDPR, we will need to monitor compliance with all relevant EU member states’ laws and regulations, including where permitted derogations from the GDPR are introduced.

We will also be subject to evolving EU laws on data export, if we transfer data outside the EU to ourselves or third parties outside of the EU.

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Facebook (Case C-311/18), called Schrems II .

This decision calls into question certain data transfer mechanisms as between the EU member states and the U.S.

This decision a) calls into question certain data transfer mechanisms as between the EU member states and the U.S.

and b) invalidates the EU-

Privacy Shield on which many companies had relied as an acceptable mechanism for transferring such data from the EU to the U.S.

The CJEU is the highest court in Europe and the Schrems II decision heightens the burden on data importers to assess U.S.

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As of March 29, 2023, we had 30 employees.

Twenty of our employees are full-time and eight are part-time, 17 are in research and development and 11 are in general and administrative.

Twenty five of our employees are full-time and five are part-time, 18 are in research and development and 12 are in general and administrative.

Given the differing characteristics of our product candidates, our approach is to engage consultants with experience in varying specialties to help us develop such candidates.

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We believe this approach enables us to access the expertise needed in a cost-efficient manner and without the need to rapidly increase the number of full-time employees and their associated costs.

In the future, if we select a commercialization strategy for a

product or product candidate that requires us to establish marketing, sales or distribution infrastructure and capabilities, we may need to rapidly increase our employee base.

In the future, if we select a commercialization strategy for a product or product candidate that requires us to establish marketing, sales or distribution infrastructure and capabilities, we may need to rapidly increase our employee base.

What changed 10-K

Item 1. Business