Veru Inc. Earnings Call: Promising Results Amid Challenges

Veru Inc ((VERU)) has held its Q2 earnings call. Read on for the main highlights of the call.

Veru Inc.’s recent earnings call conveyed a mixed sentiment, highlighting both promising developments and notable challenges. The company reported successful Phase 2b study results for enobosarm, alongside financial improvements in net loss from continuing operations. However, increased R&D costs, a significant decrease in cash reserves, and a net loss on the sale of the FC2 business were points of concern. Despite these hurdles, the company is optimistic about upcoming regulatory and clinical catalysts, although the need for additional funding remains a pressing issue.

Positive Phase 2b Study Results for Enobosarm

The earnings call revealed encouraging outcomes from the Phase 2b quality clinical study of enobosarm. When combined with GLP-1 receptor agonists, enobosarm demonstrated a 71% preservation of total lean body mass in patients, with a highly significant p-value of 0.002. The 3 mg dose of enobosarm showed an impressive 99% mean relative reduction in loss of lean mass, with a p-value of less than 0.001, underscoring its potential efficacy.

Improved Body Composition and Physical Function

Enobosarm treatment also led to a 46% greater relative loss of fat mass compared to placebo plus semaglutide over 15 weeks, with a p-value of 0.014. Furthermore, there was a notable reduction in the proportion of patients experiencing a decline in physical function, with a 62.4% relative reduction in the enobosarm 3 mg group compared to placebo, indicating significant benefits in body composition and physical performance.

Financial Improvement

Veru Inc. reported a decrease in net loss from continuing operations, dropping from $8.7 million to $7.9 million compared to the previous year’s quarter. Additionally, the sale of the FC2 female condom business generated net proceeds of approximately $16.3 million, contributing positively to the company’s financial standing.

Regulatory and Clinical Catalysts

The company is looking forward to several upcoming catalysts, including results of unblinded safety data for Phase 2b, efficacy and safety results for the Phase 2b extension study, and expected regulatory clarity from an end-of-Phase 2 FDA meeting in Q3 2025. These developments are anticipated to pave the way for further progress in Veru’s clinical programs.

Increased R&D Costs

Research and development costs saw a significant rise, increasing from $3 million to $3.9 million for the quarter and from $4.6 million to $9.6 million for the six months ended March 31, 2025. This increase was primarily attributed to expenses related to the enobosarm Phase 2b quality clinical study, reflecting the company’s commitment to advancing its research efforts.

Cash Position and Funding Needs

Veru Inc. reported a decrease in cash, cash equivalents, and restricted cash from $24.9 million to $20 million as of March 31, 2025. The company acknowledged the need for additional capital to support its drug development candidates, with current cash reserves only sufficient to last into Q4 2025, highlighting a critical area for financial strategy.

Loss on Sale of FC2 Business

The sale of the FC2 female condom business resulted in a net loss of $4.2 million, due to the difference between estimated net proceeds and the total carrying value of the business. This financial outcome underscores the challenges faced in divesting non-core assets.

Forward-Looking Guidance

Veru Inc.’s guidance emphasized the progress of their obesity program, particularly the combination of enobosarm with semaglutide for weight management in older patients. The company plans to advance into a Phase 3 clinical program, focusing on physical function improvements, with regulatory clarity expected following an end-of-Phase 2 FDA meeting. Additionally, the development of a novel modified-release oral enobosarm formulation is anticipated, with patent protection expected until 2045, positioning the company for long-term growth.

In conclusion, Veru Inc.’s earnings call highlighted a blend of optimism and caution. While the company is making strides in clinical research and financial improvements, challenges such as increased R&D costs and the need for additional funding pose significant hurdles. Investors and stakeholders will be keenly watching how Veru navigates these challenges while capitalizing on its promising clinical developments.