On February 10, 2021 Veru Inc. (NASDAQ: VERU), an oncology biopharmaceutical company with a focus on developing novel medicines for the management of prostate and breast cancer, reported that net revenues increased 38% and gross profit rose 49% for its fiscal 2021 first quarter ended December 31, 2020, setting new quarterly records for its second consecutive quarter and entering its fourth year of revenue growth (Press release, Veru, FEB 10, 2021, View Source [SID1234574855]).
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First-Quarter Financial Highlights: Fiscal 2021 vs Fiscal 2020
Net revenues increased 38% to $14.6 million from $10.6 million
FC2 prescription net revenues climbed 50% to $9.1 million from $6.1 million
Gross profit rose 49% to $10.8 million from $7.3 million
Gross margin increased to 74% of net revenues from 69% of net revenues
Operating income was $19.2 million, which includes an $18.4 million gain on sale of the PREBOOST business. Adjusted operating income, which excludes the gain on sale of PREBOOST, was $0.8 million versus an operating loss of $1.8 million
Net income, which includes the gain on sale of PREBOOST, was $17.2 million and diluted EPS was $0.23. Adjusted net loss, which excludes the gain on sale of PREBOOST, was $1.2 million compared with $3.3 million and adjusted diluted loss per share was $0.02, compared with $0.05 per share.
Balance Sheet Information
Cash and cash equivalents were $30.9 million as of December 31, 2020 versus $13.6 million as of September 30, 2020
Net accounts receivable were $4.2 million as of December 31, 2020 versus $5.2 million as of September 30, 2020
"During this quarter we reported another consecutive quarterly record both in net revenues and in gross profit driven primarily by the 50% growth in prescription sales of FC2," said Mitchell Steiner, M.D., Chairman, President and Chief Executive Officer of Veru. "We plan to submit the TADFIN NDA next week which, if approved by the FDA, will add to the already significant cash being generated by the FC2 business to invest in the clinical development of our late-stage prostate and breast cancer drug pipeline. We are off to a great start for fiscal 2021."
"Furthermore, I could not be more pleased with Veru’s progress in developing new and novel oral therapies to treat both prostate and breast advanced cancers that have become resistant to current endocrine therapies, but prior to proceeding to IV chemotherapy. We are excited to be driving our prostate cancer drug candidates, VERU-111 and VERU-100, as well as our breast cancer drug candidates, Enobosarm and VERU-111 for triple negative breast cancer, into registration clinical studies. Now with the positive clinical efficacy and safety results from the Phase 2 clinical study that evaluated VERU-111 treatment in hospitalized patients with COVID-19 and at high risk for ARDS, Veru anticipates the potential for five registration clinical trials for one COVID-19 and four oncology indications to commence in calendar year 2021."
Pharmaceutical Pipeline Highlights:
TADFIN (Tadalafil 5mg and Finasteride 5mg Combination Capsule) for the Treatment of Lower Urinary Tract Symptoms Caused by Benign Prostatic Hyperplasia (BPH)
We expect to submit the NDA for TADFIN next week. We received a waiver of the FDA NDA PDUFA filing fees as a first-time filer worth approximately $2.4 million in cost savings. We plan to launch TADFIN, which contains finasteride (approved for BPH) and tadalafil (approved for BPH and erectile dysfunction), for the indication to treat BPH, if approved by FDA. We intend to launch TADFIN through third-party telemedicine sales channels and not have to invest in our own TADFIN sales organization. This is the same sales model that has been successful for FC2, and previously, for PREBOOST.
VERU-111, a Novel, Oral, Targeted Cytoskeleton Disruptor, for the Treatment of Metastatic Castration and Androgen Receptor Targeting Agent Resistant Prostate Cancer
The Phase 2 clinical trial of VERU-111 for the treatment of metastatic castration and androgen receptor targeting agent resistant prostate cancer is fully enrolled. Although the study is still ongoing, daily chronic drug administration continues to appear feasible and safe. At 63mg daily continuous oral once-a-day dosing, there were no reports of neutropenia, a single report of minor neurotoxicity, and manageable and fewer cases of low-grade diarrhea. Like the Phase 1b, we have observed efficacy results including PSA declines as well as objective and durable tumor responses including complete and partial responses. We will be presenting updated clinical results for the Phase 1b and as well as an update on the Phase 2 clinical trials at the ASCO (Free ASCO Whitepaper) Genitourinary Cancers Symposium: "Abstract 325053: Clinical study of VERU-111, an oral cytoskeletal disruptor, in metastatic castration-resistant prostate cancer who failed an androgen receptor targeting agent" by Dr. Mark Markowski, Assistant Professor of Oncology, Johns Hopkins Kimmel Comprehensive Cancer Center, taking place February 11th-13th, 2021.
The Company has submitted its Phase 3 clinical registration protocol to evaluate VERU-111 for the treatment of men with metastatic castration resistant prostate cancer who have failed one androgen receptor targeting agent, but prior to IV chemotherapy. The Company anticipates starting the VERACITY Phase 3 study in the first quarter of calendar year 2021.
VERU-100, a Novel, Proprietary Long-Acting Gonadotropin-Releasing Hormone (GnRH) Antagonist Peptide, 3-Month Subcutaneous Depot Formulation, for Androgen Deprivation Therapy (ADT) for Advanced Prostate Cancer
VERU-100 is designed to address the current limitations of commercially available androgen deprivation therapies. ADT is currently the mainstay of advanced prostate cancer treatment and used as a foundation of treatment throughout the course of the disease. Furthermore, ADT is continued even as other endocrine, chemotherapy, and/or radiation treatments are added or stopped. The specific target product profile for VERU-100 is a chronic, long-acting GnRH antagonist peptide administered as a small volume, three-month depot subcutaneous injection without a loading dose. VERU-100 is expected to immediately suppress testosterone with no testosterone surge upon initial or repeated administration, a concern that occurs with currently approved luteinizing hormone-releasing hormone agonists used for ADT. There are no GnRH antagonist depot injectable formulations commercially approved for treatment beyond a one-month duration. A Phase 2 study to evaluate VERU-100 dosing is anticipated to begin the first half of calendar year 2021 and the Phase 3 registration study in approximately 100 men is anticipated to start in the second half of calendar year 2021.
Enobosarm, Selective AR Targeted Agent, to Treat Estrogen Receptor Targeted Agent and CDK4/6 Inhibitor Resistant AR+/ ER+/HER2- Metastatic Breast Cancer
Enobosarm, our oral, first-in-class, new chemical entity, is a selective androgen receptor targeted activating agent that is being developed for the treatment of AR+/ER+/HER2- metastatic breast cancer, that has become resistant to estrogen endocrine therapy and CDK 4/6 inhibitors, but prior to IV chemotherapy. Enobosarm, by targeting and activating the AR which is present in up to 85% of advanced ER+ positive breast cancers, represents the first new class of targeting endocrine therapy in advanced breast cancer in decades. The androgen receptor acts as a tumor suppressor in ER+ breast cancer. Enobosarm activates the AR in breast cancer to inhibit AR+ ER+ breast cancer cell proliferation and tumor growth including when ER+ breast cancer has become resistant to estrogen receptor targeting agents and CDK 4/6 inhibitors. Enobosarm could have additional beneficial clinical properties. For example, preclinical studies have shown that enobosarm builds and heals cortical and trabecular bone with the potential to treat osteoporosis and skeletal related cancer events. Enobosarm has also been shown to build muscle, to reduce fat, and to improve physical function in clinical studies involving elderly subjects and patients with cancer cachexia, including breast cancer. Furthermore, the tissue selectivity of enobosarm also results in a favorable side effect profile with no masculinization (facial hair and acne), no increase in hematocrit, and no liver toxicity. Two positive Phase 2 studies involving approximately 150 women with AR+/ER+ metastatic breast cancer have been conducted. Enobosarm AR targeted treatment demonstrated favorable clinical benefit rates, objective and durable tumor responses in women with heavily pretreated estrogen receptor targeted resistant AR+ ER+ metastatic breast cancer. Quality of life measurements demonstrated overall improvement including mobility, anxiety/depression and pain. Enobosarm appears safe and well tolerated without virilizing effects, increase in hematocrit, or liver toxicity.
FDA agreed to our enobosarm Phase 3 registration clinical trial to evaluate the efficacy and safety of enobosarm 9mg versus an active control (either exemestane or tamoxifen) 2:1 randomization for the treatment of metastatic AR+/ER+/HER2- breast cancer in approximately 240 patients who have failed a nonsteroidal aromatase inhibitor (anastrozole or letrozole), fulvestrant, and a CDK4/6 inhibitor. The Phase 3 study will be called the ARTEST study. The primary endpoint is radiographic progression-free survival. Our enobosarm key opinion leaders have been particularly intrigued by the preclinical data that showed that the combination of enobosarm and a CDK4/6 inhibitor restored CDK4/6 sensitivity in AR+/ER+ metastatic breast cancer that was resistant to both estrogen receptor targeted agents and CDK4/6 inhibitors, which is the target patient population in our planned Phase 3 ARTEST clinical study. Consequently, we plan to add a third arm to our Phase 3 trial which would be a combination of enobosarm plus a CDK 4/6 inhibitor. The Phase 3 ARTEST trial will now have three treatment arms: enobosarm alone, enobosarm in combination with a CDK4/6 inhibitor, and active control of either exemestane or tamoxifen. The trial sample size will remain the same at approximately 240 women but randomized 1:1:1 instead of the 2:1 in the previous Phase 2 clinical trial design. The pivotal Phase 3, open label, randomized, active control ARTEST study is anticipated to commence next quarter.
VERU-111 for Taxane Resistant Metastatic Triple Negative Breast Cancer
Metastatic triple negative breast cancer (TNBC) is an aggressive form of breast cancer that is present in approximately 15% of all breast cancers. This form of breast cancer does not express ER, PR or HER2 and is resistant to endocrine therapies. The first line of treatment usually includes IV taxane chemotherapy. Almost all these women will develop taxane resistance and could be a candidate for VERU-111. Preclinical studies in human triple negative breast cancer grown in animal models demonstrate that VERU-111 significantly inhibits cancer proliferation, migration, metastases, and invasion of triple negative breast cancer cells and tumors that have become resistant to paclitaxel, which is a taxane.
Using the safety information from the Phase 1b and Phase 2 VERU-111 prostate cancer clinical studies in a total of approximately 80 men, we will meet with FDA in the first half of calendar year 2021 to discuss Phase 2b clinical trial design for possible accelerated approval for VERU-111 versus active control Trodelvy for patients with taxane resistant triple negative breast cancer, making the proposed trial a potential registration trial. The Phase 2b clinical study is planned to commence in the second half of calendar year 2021.
VERU-111 for COVID-19
This past Monday we announced positive results from the Phase 2 clinical trial evaluating VERU-111 for the treatment of hospitalized patients with COVID-19 who were at high risk for acute respiratory distress syndrome (ARDS). VERU-111 is a novel once a day orally dosed small molecule that has both broad antiviral and anti-inflammatory activities which may serve a two-pronged approach to the treatment of COVID-19 virus infection and the subsequent debilitating inflammatory effects that lead to ARDS and death. We conducted a double-blind, randomized, placebo-controlled Phase 2 clinical trial evaluating daily oral once a day dosing of VERU-111 18mg versus placebo in approximately 40 hospitalized COVID-19 patients who were at high risk for ARDS. This trial was conducted in 5 sites across the United States. Patients that were hospitalized with documented evidence of COVID-19 infection with symptoms and who were at high risk for ARDS were enrolled. Subjects received either VERU-111 18mg or placebo as well as standard of care for 21 days or until released from hospital. The primary efficacy endpoint was the proportion of patients that were alive without respiratory failure at Day 29.
For the primary endpoint in hospitalized patients that had >1 dose of study drug, VERU-111 for COVID-19 treatment compared to placebo had a statistically significant and clinically meaningful 81% relative reduction in death or respiratory failure at Day 29. With respect to secondary endpoints, VERU-111 had a statistically significant 82% relative reduction in patient mortality and statistically significant reduction in days in ICU; there was also a decrease in days on mechanical ventilation versus placebo. Furthermore, VERU-111 was well tolerated with a good safety profile.
The Company has been granted an expedited End of Phase 2 meeting with the FDA to discuss next steps including a Phase 3 clinical registration trial design for the VERU-111 COVID-19 program. The Company expects that this confirmatory study will have a similar trial design as the Phase 2 study to evaluate daily oral doses of VERU-111 versus placebo with the primary efficacy endpoint of proportion of patients that are alive without respiratory failure at Day 29. We expect the Phase 3 clinical trial will be conducted in approximately 200 hospitalized patients who have COVID-19 and are at high risk for ARDS. The Biomedical Advanced Research and Development Authority of the US Department of Health and Human Services (BARDA) has granted Veru a meeting to discuss possible grant funding for the Phase 3 study and manufacturing scale up. We plan to commence the VERU-111 for COVID-19 Phase 3 study in April 2021.
Non-GAAP Financial Information
Certain financial results for fiscal years 2021 and 2020 are presented on both a reported and a non-GAAP, adjusted basis. Reported results were prepared in accordance with U.S. GAAP and include all revenue and expenses recognized during the period. The non-GAAP results are adjusted to exclude the one-time gain on sale of PREBOOST in the first quarter of fiscal year 2021. Management believes non-GAAP financial measures provide useful information to investors regarding the Company’s results of operations and assist management, analysts, and investors in evaluating the performance of the Company’s business. Non-GAAP financial measures should be considered in addition to, and not as a substitute for, measures of financial performance prepared in accordance with GAAP. The Company has reconciled these non-GAAP financial measures to the nearest reported GAAP measures in the reconciliation table below.
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. The call will also be available through a live, listen-only audio broadcast via the Internet at www.verupharma.com. A playback of the call will be archived and accessible on the same website for at least three months. A telephonic replay of the conference call will be available, beginning the same day at approximately 12 p.m. (noon) ET by dialing 877-344-7529 for U.S. callers, or 412-317-0088 from outside the U.S., passcode 10151507, for one week.