SAN DIEGO - Daré Bioscience, Inc. (NASDAQ: DARE), a biopharmaceutical company focused on women's health, has closed a royalty monetization transaction with XOMA (US) LLC, securing $22 million in non-dilutive capital.
This financial move is aimed at advancing the company's Phase 3 investigational products, Ovaprene and Sildenafil Cream, which are potential first-in-category treatments for contraception and female sexual arousal disorder, respectively.
The agreement stipulates that after XOMA achieves a pre-defined return threshold, it will make milestone payments to Daré, amounting to 50% of the future payments XOMA would otherwise receive under the deal. This structure allows Daré to retain significant economic interest in the commercial success of its products, including XACIATO (clindamycin phosphate) vaginal gel 2%, which is licensed to Organon.
Daré's President and CEO, Sabrina Martucci Johnson, highlighted the transaction's role in providing capital to drive shareholder value through the continued advancement of their innovative products. The company retains a majority interest in the future revenue from Ovaprene and Sildenafil Cream, with the potential for attractive margins through retained net sales and commercial milestones.
The transaction also involves the sale of royalties and potential milestones from XACIATO sales under Daré's license agreement with Organon and a portion of a potential $20 million payment from Bayer (OTC:BAYRY) related to Ovaprene.
Additionally, Daré will receive a synthetic royalty on net sales of Ovaprene and Sildenafil Cream, which will decrease once XOMA reaches another return milestone, effectively lowering the royalty rate.
TD Cowen served as the exclusive financial advisor to Daré Bioscience for the transaction, with legal advice provided by Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. to Daré and Gibson, Dunn & Crutcher LLP to XOMA.
Daré's portfolio includes the FDA-approved XACIATO for bacterial vaginosis and other candidates in clinical development for contraception, sexual health, and menopausal hormone therapy. The company continues to communicate financial and product information through various channels, including its website and social media.
This article is based on a press release statement from Daré Bioscience, Inc.
InvestingPro Insights
As Daré Bioscience, Inc. (NASDAQ: DARE) secures a strategic financial deal to bolster its product pipeline, investors and industry observers are keenly analyzing the company's financial health and market position. According to InvestingPro data, Daré holds a market capitalization of $28.35 million. Despite the challenges faced in the biopharmaceutical sector, analysts recognize the potential for sales growth in the current year, as indicated by an InvestingPro Tip. This is particularly relevant given the company's focus on advancing Phase 3 investigational products, which could transform into significant revenue streams upon successful commercialization.
Nevertheless, Daré's financial metrics reveal some concerns. The company's gross profit margin for the last twelve months as of Q4 2023 stood at -670.62%, and it reported a revenue decline of -71.92% over the same period. Moreover, the stock price has experienced a notable downturn, currently trading near its 52-week low and having fallen -71.81% over the past year. These figures underscore the importance of the company's strategic moves to secure non-dilutive capital and the potential impact of its investigational products on its financial recovery.
InvestingPro Tips also suggest that Daré is quickly burning through cash, with short-term obligations exceeding its liquid assets. This financial situation emphasizes the significance of the royalty monetization transaction with XOMA as a vital lifeline for the company's operations and development plans. For investors seeking a deeper dive into Daré's financials and strategic outlook, there are 11 additional InvestingPro Tips available, which can be accessed at Investing.com/pro/DARE. Use the exclusive coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking a wealth of data and insights to inform investment decisions.
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