On May 15, 2019 Veru Inc. (NASDAQ: VERU) an oncology and urology biopharmaceutical company developing novel medicines for prostate cancer treatment and prostate cancer supportive care, reported its financial results for its fiscal 2019 second quarter ended March 31, 2019 (Press release, Veru, MAY 15, 2019, View Source [SID1234536336]).
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Business and Operational Highlights
VERU-111: Our oral, next-generation, first-in-class, alpha and beta antitubulin is being evaluated in men who have metastatic prostate cancer and whose disease is resistant to both castration and novel androgen blocking agents (abiraterone or enzalutamide). The open label Phase 1b clinical trial being conducted to determine the maximally tolerated dose is progressing. The open label Phase 2 clinical study is expected to commence in the Fall of 2019. Oral drugs for advanced prostate cancer, abiraterone and enzalutamide, had over $3 billion in U.S. annual sales in 2018 and $6 billion in 2018 global revenue. Men with metastatic castration resistant prostate cancer who have failed these novel androgen blocking agents is the population that VERU-111 is targeting which represents an estimated $4.5 billion annual global market.
Zuclomiphene Citrate: Enrollment of approximately 100 men in the Phase 2 clinical trial is progressing in approximately 17 clinical sites in the US. Top line results of the study are expected Summer 2019. Zuclomiphene Citrate is a novel, proprietary, oral, nonsteroidal, estrogen receptor agonist to treat hot flashes caused by androgen deprivation therapy, or hormone treatment for men with advanced prostate cancer. Based on an independent market analysis sponsored by the Company, the expected U.S. sales potential for zuclomiphene citrate is estimated to exceed $600 million annually.
TADFIN (Tadalafil and Finasteride Combination Tablet): As previously announced, the Company completed a successful bioavailability and bioequivalence clinical trial for TADFIN for benign prostatic hyperplasia. The Company filed patent applications that, if issued, would have an expiry of 2040. NDA submission expected late 2019 to early 2020 with anticipated approval in 2020. BPH is an established multi-billion-dollar market.
"The clinical development of our proprietary drug pipeline is advancing," said Mitchell Steiner, M.D., Chairman, President and Chief Executive Officer of Veru. "In clinical observations, VERU-111 appears to be well tolerated, with no documented complaints or evidence of neurotoxicity or neutropenia. Moreover, in a number of men whose PSA was rising prior to enrollment into the Phase 1b clinical trial, we are seeing some evidence of PSA stabilizations and reductions even at the lowest doses of VERU-111 being tested, which is a promising early indication of efficacy. As for our zuclomiphene citrate product, based on the blinded aggregate preliminary clinical data from our placebo-controlled trial, we can make the following general clinical observations: men are experiencing reductions in hot flashes; and as for safety, zuclomiphene citrate appears to be well tolerated."
Fiscal 2019 Second Quarter vs Fiscal 2018 Second Quarter Financial Results
Net revenues up 171% to $7.0 million from $2.6 million. Company reported FC2 sales growth in both its public sector and its US prescription channels;
Gross profit up 285% to $4.6 million, or 66% of net revenues, from $1.2 million, or 47% of net revenues;
FC2 US prescription channel net revenues up 753% to $2.6 million from $0.3 million;
FC2 public sector channel net revenues up 88% to $4.2 million from $2.3 million;
Financial results do not reflect the new tender orders that will be coming from South Africa. We expect new orders from South Africa to commence shipping during the third quarter of this fiscal year;
Commercial segment, which includes FC2, PREBOOST and drug commercialization costs, generated operating income of $3.2 million versus an operating loss of $163,000;
Operating loss significantly narrowed to $2.1 million from $4.7 million; and
Net loss was $4.0 million, or $0.06 per share, compared with $3.8 million, or $0.07 per share.
Fiscal 2019 Year-to-Date vs Fiscal 2018 Year-to-Date Financial Results
Net revenues up 159% to $13.3 million from $5.2 million;
Gross profit up 268% to $9.3 million, or 69% of net revenues, from $2.5 million, or 49% of net revenues;
Net revenue from the US prescription channel was up 1,000% to $5.0 million from $458,000 in the prior-year period;
Net revenue for the public sector channel was up 73% to $8.1 million from $4.7 million in the prior-year period;
Net revenue for PREBOOST/ Roman Swipes was $180,000 compared to $4,600 in the prior-year period; an increase of 3800%;
Operating loss down 74% to $3.1 million from $12.1 million (fiscal 2018 year to date included a $3.8 million loss for the settlement of Brazilian receivables); and
Net loss was $6.2 million, or $0.10 per share, compared with $8.1 million, or $0.15 per share.
"We have achieved strong operating results through the first two quarters of fiscal 2019," said Dr. Steiner. "Positive financial growth continued into our second quarter, with sequential quarterly increases to net revenues from both our FC2 US prescription and public sector channels. Growth of our US FC2 prescription channel is particularly noteworthy as it appears to be less reliant on traditional intermittent ordering patterns present in our FC2 public sector channel."
Financial Guidance
Management expects net revenues will grow to $29-32 million for the full year FY2019 which represents a 95% increase over the full year FY2018, and management expects gross margin will be approximately 66% in FY2019 compared to 55% in FY2018.
"Based on current cash on hand and expected cash from current sales forecasts, along with existing sources of capital, the Company does not anticipate the need for a new equity financing until at least fiscal 2021," said Dr. Steiner.
The Company does not expect to update the guidance for the full year fiscal 2019 provided above before the release announcing results for the next fiscal quarter. The Company notes that the statements of future performance made in this release, including the guidance for the full fiscal year 2019, are based upon current expectations and are subject to factors that could cause actual results to differ materially from those suggested here, including those factors set forth in the "Safe Harbor" Statement below.
Conference Call Event Details
Veru Inc. will host a conference call today at 8 a.m. ET to review the Company’s performance. Interested investors may access the call by dialing 800-341-1602 from the U.S. or 412-902-6706 from outside the U.S. and asking to be joined into the Veru Inc. call.
In addition, investors may access a replay of the conference call the same day beginning at approximately noon Eastern Time by dialing 877-344-7529 for US callers, or 412-317-0088 from outside the U.S., passcode 10130716. The replay will be available for one week, after which, the recording will be available via the Company’s website at View Source