Business Context and Reporting Period
Company: Dare Bioscience, Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: February 11, 2018
Event: Entry into a Material Definitive Agreement (License and Collaboration Agreement).
Key Financial Metrics
This filing does not report revenue, profit, cash flow, margins, debt, or liquidity metrics. The document focuses exclusively on the terms of a new strategic agreement.
Material Changes and Agreement Terms
On February 11, 2018, Dare Bioscience entered into a license and collaboration agreement with Strategic Science and Technologies-D, LLC ("SST") and Strategic Science Technologies, LLC. Key terms include:
- Condition Precedent: The agreement is subject to Dare securing an investment of at least $10,000,000 by March 31, 2018 (extendable by mutual agreement).
- Licensed Products: Exclusive, royalty-bearing, sublicensable license to develop and commercialize SST's topical formulation of sildenafil citrate for female sexual dysfunction and reproductive health globally.
- Intellectual Property: Parties retain rights to their own inventions; joint inventions are owned 50/50.
- Financial Obligations:
- Royalties: Tiered royalties to SST based on annual net sales (single digits to mid-double digits) plus a percentage of sublicense revenue.
- Milestone Payments: Contingent payments ranging from $500,000 to $150,000,000 based on clinical, regulatory, and commercial milestones.
- Costs: Dare is responsible for all reasonable internal and external costs incurred by SST for required development activities.
- Term: Continues until the later of 10 years from first commercial sale or expiration of patent rights.
- Termination: Dare may terminate without cause with 90 days' notice prior to regulatory approval and 180 days' notice post-approval. SST may terminate if Dare fails to meet development efforts.
Guidance, Outlook, and Risks
Outlook: The Company intends to use commercially reasonable efforts to develop and commercialize the Licensed Products in accordance with a development plan overseen by a Joint Development Committee.
Risks and Contingencies:
- The agreement is contingent upon Dare securing $10,000,000 in investment by March 31, 2018.
- Significant financial exposure exists through potential milestone payments up to $150,000,000 and ongoing royalty obligations.
- Termination risks exist if development milestones are not met or if regulatory approval is not obtained.
Investor Verification Checklist
- Verify whether Dare Bioscience has secured the required $10,000,000 investment by the March 31, 2018 deadline.
- Review the specific development plan and timeline for the topical sildenafil formulation.
- Assess the Company's current cash position and ability to fund SST's development costs and potential milestone payments.
- Monitor for the filing of the full License Agreement in the upcoming Form 10-K for the fiscal year ended December 31, 2017.