Dare Bioscience (DARE) Stock Rockets On Collaboration

Dare Bioscience DARE Stock News

Dare Bioscience Inc (NASDAQ: DARE) is screaming for the top this morning, trading on gains of well over 140%. The gains come after the company announced that it has entered into an exclusive agreement with Bayer. Here’s what’s happening:

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DARE Stock Flies On Collaboration With Bayer

In a press release issued early this morning, Dare Biosciences announced that it has entered into an agreement with Bayer. The agreement surrounds the commercilization of Dare’s contraceptive product, Ovaprene.

In the release, DARE reminded investors that Ovaprene is an investigational hormone-free monthly vaginal contraceptive. At the moment, the treatment is in clinical studies for the prevention of pregnancy.

Should Ovaprene be approved, it will be the only approved, non-hormonal option to prevent preganancy. The timing here is importnat. According to the company’s timeline, it plans on initiating a pivotal study surrounding the treatment in the second half of 2020. Should the study go well, the data will support the approval of the treatment.

According to the agreement with Bayer, DARE will receive an upfront payment from the company. Moreover, the company will receive access to Bayer’s extensive clinical and market capabilities, but will not forfeit control of development and commercial activities.

According to the agreement, Bayer has the option to make a payment of $20 million to DARE. If it decides to do so, the funds will be used to reimburse the company of costs associated with the study. Should this take place, Bayer’s exclusive license to commercilize Ovaprene in the United States will become effective.

Moreover, Bayer has agreed to pay Dare Bioscience up to $310 million in milestone payments on top of double digit tiered royalties.  In a statement, Sabrina Martucci Johnson, President and CEO at DARE, had the following to offer:

We believe Bayer is best positioned to maximize the market opportunity for Ovaprene, which has the potential to be a first-in-category product for women, as Bayer has with other first-in-category products. This agreement provides Daré the opportunity to immediately benefit from Bayer’s expertise in development, regulatory, and commercialization, to unlock the program’s full value similar to other innovative contraceptive brands.

The News Has Triggered A Short Squeeze

Before the release of this morning’s news, Dare Biosciences was a pretty heavily shorted stock. Unfortunately for those selling the stock short, when DARE started to make its way for the top, losses began to mount.

The move led to short sellers quickly racing to cover their positions by buying and returning the short sold shares. This is often referred to as a short squeeze.

Keep in mind that while short squeezes tend to be pretty short term moves, the gains that they can create tend to be massive. So, DARE may have quite a bit more room to run here.

It’s also important to remember that this agreement is a big deal. Should the company continue to do well in clinical trials with Ovaprene, it’s going to have one of the largest companies in pharmaceuticals on its side with regard to commercialization. So, beyond the short squeeze, there is very good reason to get involved here.

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