Veru Inc. (NASDAQ:VERU) is a late clinical stage biopharmaceutical company focused on developing innovative medicines for the treatment of metabolic diseases, oncology, and acute respiratory distress syndrome (ARDS). The company's drug development program includes two late-stage novel small molecules, enobosarm and sabizabulin.
Business Overview
Enobosarm, a selective androgen receptor modulator (SARM), is being developed for two indications: (i) a Phase 2b clinical study of enobosarm as a treatment to augment fat loss and to prevent muscle loss in sarcopenic obese or overweight elderly patients receiving a GLP-1 receptor agonist (GLP-1 RA) who are at-risk for developing muscle atrophy and muscle weakness and (ii) subject to the availability of sufficient funding, a Phase 3 ENABLAR-2 clinical trial of enobosarm and abemaciclib for the treatment of androgen receptor positive (AR+), estrogen receptor positive (ER+) and human epidermal growth factor receptor 2 negative (HER2-) metastatic breast cancer in the 2nd line setting. Sabizabulin, a microtubule disruptor, is being developed as a Phase 3 clinical trial for the treatment of hospitalized patients with viral-induced ARDS.
The company also has an FDA-approved commercial product, the FC2 Female Condom® (Internal Condom), for the dual protection against unplanned pregnancy and sexually transmitted infections.
Financials
For the fiscal year ended September 30, 2023, Veru reported annual net revenues of $16.3 million, an annual net loss of $93.1 million, annual operating cash outflows of $88.0 million, and annual free cash outflows of $88.7 million.
In the second quarter of fiscal 2024, Veru generated net revenues of $4.1 million, a net loss of $10.0 million, and used $11.7 million in operating cash. The company's cash balance as of March 31, 2024 was $34.7 million, up from $9.6 million as of September 30, 2023, primarily due to the completion of a $35.2 million public offering in December 2023.
Recent Developments
Veru's primary focus is on the development of enobosarm for the treatment of obesity and overweight patients. According to the Centers for Disease Control and Prevention (CDC), 41.5% of older adults in the United States have obesity, and up to 34.4% of these obese patients over the age of 60 have sarcopenic obesity, a condition characterized by the combination of obesity and age-related low muscle mass.
GLP-1 receptor agonists, such as Wegovy® (semaglutide), are effective weight loss drugs, but they can result in significant muscle loss, which may lead to muscle weakness, poor balance, decreased gait speed, mobility disability, loss of independence, falls, and bone fractures. Veru believes there is an urgent unmet medical need for a drug that can be used in combination with a GLP-1 RA to prevent the loss of muscle while preferentially reducing fat in overweight or obese patients, especially for those with sarcopenic obesity who are at high risk for developing muscle atrophy and weakness.
Enobosarm, Veru's novel oral SARM, has been previously studied in five clinical trials involving 968 older men and postmenopausal women, as well as older patients with muscle wasting due to advanced cancer. These trials demonstrated that enobosarm treatment leads to dose-dependent increases in muscle mass with improvements in physical function, as well as significant reductions in fat mass. Importantly, enobosarm has a large safety database, with 27 clinical trials involving 1,581 men and women, some of whom were dosed for up to 3 years, and it was generally well tolerated without increases in gastrointestinal side effects.
In April 2024, Veru initiated a Phase 2b, multicenter, double-blind, placebo-controlled, randomized, dose-finding clinical trial to evaluate the safety and efficacy of enobosarm 3mg, enobosarm 6mg, or placebo as a treatment to preserve muscle and augment fat loss in approximately 150 patients with sarcopenic obesity or overweight elderly (>60 years of age) patients receiving semaglutide (Wegovy®). The primary endpoint is the change in total lean body mass, and the key secondary endpoints are the change in total body fat mass and physical function as measured by stair climb test at 16 weeks. Topline results from this Phase 2b trial are expected by the end of calendar year 2024.
After completing the 16-week efficacy dose-finding portion of the Phase 2b trial, participants will then continue in a blinded fashion into a Phase 2b extension clinical trial where all patients will stop receiving the GLP-1 RA but will continue taking placebo, enobosarm 3mg, or enobosarm 6mg for an additional 12 weeks. This extension trial will evaluate whether enobosarm can maintain muscle and prevent the fat and weight gain that occurs after discontinuing a GLP-1 RA. Topline results from the Phase 2b extension study are expected in the second quarter of 2025.
FC2 Female Condom Business
Veru's FC2 Female Condom business continues to generate revenue, contributing $4.1 million in the second quarter of fiscal 2024, down from $6.6 million in the prior year period. The decrease was primarily due to a $3.9 million decline in sales to The Pill Club, a former telehealth customer that filed for Chapter 11 bankruptcy in April 2023. Sales to the global public health sector increased to $3.5 million in the second quarter of fiscal 2024, up from $2.4 million in the prior year period.
The company is working to increase future FC2 net revenues in the U.S. prescription channel by growing awareness and driving demand through increased marketing efforts for its own telehealth platform and pursuing additional distributors in the telehealth sector. Veru is also starting to see increases in its global public sector business from efforts to increase FC2 market awareness in developing countries.
Liquidity
Veru believes its current cash balance of $34.7 million, along with cash expected to be generated from sales of FC2, will be adequate to fund the planned operations of the company for at least the next 12 months as it continues to focus on developing enobosarm for high quality weight loss. The company has ample experience in managing its cash burn, having generated approximately $200 million in cash from the FC2 business over the past 5 years to fund its clinical development activities.
Outlook
The global obesity and overweight drug market is projected to reach $100 billion by 2030, and Veru believes the combination of enobosarm with a GLP-1 RA represents a multi-billion dollar global opportunity. The company is excited about the prospects of enobosarm to address this important unmet medical need and is looking forward to quickly enrolling the Phase 2b clinical study.
In addition to the ongoing Phase 2b trial of enobosarm, Veru will be presenting two late-breaking abstract presentations at the American Association of Clinical Endocrinology 2024 Annual Meeting. The presentations will provide further insights into the potential of enobosarm to optimize weight loss by augmenting the reduction of fat mass while preserving muscle in older patients with obesity.
Conclusion
Overall, Veru is well-positioned to advance its enobosarm program for the treatment of obesity and overweight patients, with a focus on preserving muscle mass and enhancing weight loss quality. The company's strong cash position, combined with its extensive experience in managing cash burn and developing innovative medicines, provides a solid foundation for the continued progress of its pipeline.