On December 9, 2020 Veru Inc. (NASDAQ: VERU), an oncology biopharmaceutical company with a focus on developing novel medicines for the management of cancer, reported record net revenues and gross profit for its fiscal 2020 fourth quarter and full year ended September 30, 2020 (Press release, Veru, DEC 9, 2020, View Source [SID1234572505]).
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Fourth-Quarter Financial Highlights: Fiscal 2020 vs Fiscal 2019
Net revenues increased 35% to $11.7 million from $8.7 million
FC2 prescription net revenues climbed 87% to $8.7 million from $4.7 million
Gross profit rose 64% to $9.6 million from $5.8 million
Gross margin increased to 81% of net revenues from 67% of net revenues
Operating loss was $11.3 million, which includes a $14.1 million non-cash impairment charge related to intangible assets. Adjusted operating income, which excludes the non-cash impairment charge, was $2.8 million versus an operating loss of $1.5 million
Net loss, which includes the non-cash impairment charge, was $11.8 million, or $0.17 per share, compared with $3.1 million, or $0.05 per share
Full-Year Financial Highlights: Fiscal 2020 vs Fiscal 2019
Net revenues rose 34% to $42.6 million from $31.8 million
FC2 prescription sales climbed 93% to $27.1 million from $14.1 million
Gross profit rose 42% to $30.8 million from $21.7 million
Gross margin increased to 72% of net revenues from 68% of net revenues
Operating loss was $14.7 million, which included a $14.1 million non-cash impairment charge related to intangible assets. Adjusted operating loss, which excludes the non-cash impairment charge, narrowed to $0.6 million from $6.4 million
Net loss, which includes the non-cash impairment charge, was $19.0 million, or $0.28 per share, compared with $12.0 million, or $0.19 per share
"We reported stellar financial results for both the fiscal 2020 fourth quarter and full year largely driven by strong sales of our FC2 product," said Mitchell Steiner, M.D., Chairman, President and Chief Executive Officer. "In particular, prescription sales of FC2 sharply increased, helping to raise our gross margin in the recently completed fourth quarter to more than 81% of total net revenues. We anticipate further growth of prescription FC2 sales in the coming year."
Company Sells PREBOOST Business
The Company has completed the sale of its PREBOOST for the treatment of premature ejaculation business to Roman Health Ventures Inc. for $20 million in cash, consisting of $15 million paid at closing, $2.5 million payable 12 months after closing and $2.5 million payable 18 months after closing.
"Proceeds from the transaction, along with current cash and anticipated cash flow from operations, are expected to be sufficient to self-fund our existing drug product development program, without the need for a new equity financing, until at least the end of fiscal year 2022," said Dr. Steiner. "We plan to continue to generate robust growing revenues from our sexual health business which as a standalone business would be very valuable. Coming off a record year of $42.6 million in net revenues with a gross margin of 72%, and expecting another record year in fiscal year 2021, we could have options to monetize the business as we did with the PREBOOST business."
"Veru has evolved into a late clinical stage oncology drug development and commercialization company, having made excellent progress on our development program. Our multiple drug candidates continue to advance, and we are confident that we will achieve significant milestones in 2021. The Company expects it will have sufficient resources generated from our sexual health business and existing sources of cash to fund clinical development of all our registration clinical trials without the need for new equity financing through the end of fiscal year 2022."
Some Pharmaceutical Pipeline Recent Highlights:
The Company expects to issue a news release later today with a more detailed update on its pipeline of late clinical stage drug candidates including the in-licensing of a novel late clinical stage breast cancer drug product entering a Phase 3 clinical trial.
TADFYN (Tadalafil 5mg and Finasteride 5mg Combination Capsule) for the Treatment of Lower Urinary Tract Symptoms Caused by Benign Prostatic Hyperplasia (BPH)
The Company had a successful pre-NDA meeting with the FDA last year and the 12-month stability testing on three manufacturing / commercial batches required by the FDA is being completed. We expect to submit the NDA for TADFYN in the first quarter of calendar year 2021 and plan to launch, if approved, via telemedicine channels in late calendar year 2021.
VERU-111 for Metastatic Castration and Androgen Targeting Agent Resistant Prostate Cancer
In September, the Company announced that it had fully enrolled a Phase 2 clinical trial of VERU-111, its novel, oral, targeting alpha and beta tubulin of microtubules to disrupt the cytoskeleton (cytoskeleton disruptor for metastatic castration and androgen receptor targeting agent resistant prostate cancer. In both the Phase 1b study (n=39) and in the Phase 2 study (n=41), VERU-111 63mg oral daily continuous dosing for 21 day cycles has been well tolerated with no reports of neutropenia and neutrotoxicity and has demonstrated promising efficacy with evidence of PSA declines and objective and durable tumor responses. The Company has received input from the FDA and anticipates initiating a Phase 3 VERU-111 VERACITY registration clinical trial during the first quarter of calendar 2021.
VERU-100 Androgen Deprivation Therapy for Advanced Prostate Cancer
VERU100 is a long-acting GnRH antagonist peptide formulation administered as a small volume, three-month depot subcutaneous injection without a loading dose. There are no GnRH antagonist depot injectable formulations commercially approved beyond a one-month duration. The Company anticipates initiating a Phase 2 trial to evaluate VERU-100 dosing in the first quarter of calendar year 2021 and a Phase 3 registration clinical trial during the second half of calendar year 2021.
VERU-111 COVID-19: Phase 2 Clinical Trial
The Company is also developing VERU-111 for COVID-19 patients at high risk for acute respiratory distress syndrome (ARDS). The drug’s dual antiviral and anti-inflammatory action has the potential to broadly treat the cytokine storm associated with high COVID-19 mortality rates. The Company is close to completing enrollment of a Phase 2 clinical trial to assess the efficacy of VERU-111 in combating COVID-19 in patients at high risk for ARDS.
Impairment Charge
During the fourth quarter the Company took a one-time, non-cash impairment charge of $14.1 million related to in process research and development associated with the financial accounting for the Aspen Park Pharmaceuticals, Inc. acquisition, all as further described in the Company’s Form 10-K for the fiscal year ended September 30, 2020. The non-cash charge is primarily related to the Company’s decision to prioritize clinical development for late clinical stage oncology drug development candidates with greater market differentiation, larger markets, and higher profit potential.
Non-GAAP Financial Information
Certain financial results for fiscal years 2020 and 2019 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, non-cash impairment charge in the fourth quarter of fiscal year 2020. 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 10149625, for one week.
The Company does not expect to update the guidance provided above regarding its expectation that it will not need a new equity financing. The Company notes that the statements of future performance made in this release 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.