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Veru (VERU)
NASDAQ:VERU
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Veru
(NASDAQ:VERU)
44Neutral
Positive Factors
Clinical Trial Progress
The Ph. IIb QUALITY study has achieved full enrollment of over 150 patients, with top-line data expected to provide insights into enobosarm's effectiveness.
Revenue Performance
Net revenue was $16.9M, representing 4% YoY growth and beating our projection of $13.2M.
Negative Factors
Financial Stability
The company may need to raise additional capital within the next 12 months, in our view.
Veru (VERU) vs. S&P 500 (SPY)
Market Cap
$72.28M
Dividend YieldN/A
Average Volume (3M)2.56M
Price to Earnings (P/E)―
Beta (1Y)0.61
Revenue Growth-7.43%
EPS Growth69.03%
CountryUS
Employees210
SectorHealthcare
Sector Strength78
IndustryBiotechnology
Share Statistics
EPS (TTM)-0.23
Shares Outstanding146,383,930
10 Day Avg. Volume1,210,056
30 Day Avg. Volume2,560,786
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)4.90
Price to Cash Flow (P/CF)-1.60
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$4.00Price Target Upside788.89% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
Veru Business Overview & Revenue Model
Company DescriptionVeru, Inc. is an oncology and urology biopharmaceutical company. It develops medicines for prostate cancer treatment and prostate cancer supportive care as well as urology specialty pharmaceuticals. Its oncology drug candidates includes VERU-111, an oral alpha and beta tubulin inhibitor, which is in a phase 1b/2 study for the treatment of metastatic castration resistant prostate cancer; Zuclomiphene citrate, which is in a phase 2 clinical trial for the treatment of hot flashes in men undergoing prostate cancer hormonal therapies; and VERU-100, a long-acting GnRH antagonist 3 month subcutaneous depot, planned phase 2 clinical trial for the treatment of hormone sensitive advanced prostate cancer. The company's urology specialty pharmaceutical drug candidate is TADFIN, a tadalafil and finasteride combination oral capsule, for the treatment of men with benign prostatic hyperplasia. Its commercial products include the FC2 Female/Internal condom for prevention of pregnancy and sexually transmitted infections and PREBOOST 4% benzocaine wipes for the prevention of premature ejaculation marketed as Roman Swipes by getroman.com. The company was founded by William R. Gargiulo Jr. and O.B. Parrish in 1996 and is headquartered in Miami, FL.
How the Company Makes MoneyVeru Inc. generates revenue primarily through the development, marketing, and sales of pharmaceutical products. The company focuses on creating oncology drugs, which are often patented, allowing them to have exclusive rights to market these treatments. Revenue is derived from the sale of these medications to healthcare providers and institutions. The company's business model also involves entering strategic partnerships and licensing agreements with other pharmaceutical companies, which can provide additional income streams through upfront payments, milestone payments, and royalties. Moreover, Veru may engage in clinical trials that are partially funded by partners, reducing the company's direct expenses and contributing indirectly to its financial health.
Veru Financial Statement Overview
Summary
Veru's financial statements reveal significant operational and profitability challenges, with declining revenues and severe net losses. The positive gross profit margin is overshadowed by negative EBIT and EBITDA margins, indicating inefficiencies. Despite low leverage, the negative ROE and cash flow problems indicate an urgent need for strategy reassessment.Income Statement
Veru's income statement reveals significant challenges with profitability. The company has experienced declining revenues, with a 12.7% decrease from the previous year, and a negative net profit margin of -260.8% TTM due to substantial net losses. Although gross profit margin remains positive at 31.9%, the EBIT and EBITDA margins are severely negative, indicating operational inefficiencies. This suggests that Veru is struggling to manage its operating expenses effectively in relation to its revenue.41
Neutral
Balance Sheet
Veru maintains a relatively moderate debt-to-equity ratio of 0.13 TTM, indicating a conservative approach to leveraging. The equity ratio is 66.9%, which showcases a strong reliance on equity financing and a robust capital base. However, the return on equity is negative at -144.4% TTM, reflecting the company's inability to generate profits from its equity base. This highlights a need for improvement in generating returns for shareholders.54
Neutral
Cash Flow
The cash flow statement shows that Veru is facing challenges with cash generation, having negative operating cash flow and free cash flow in the TTM period. The free cash flow to net income ratio is negative, indicating that the company is not converting its net income into free cash flow. This raises concerns about Veru's ability to sustain its operations and invest in future growth without additional financing.38
Negative
| Breakdown | |||||
| TTM | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 | Sep 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 14.75M | 16.89M | 16.30M | 39.35M | 61.26M | 42.59M | Gross Profit |
| 4.70M | 5.85M | 7.57M | 30.59M | 47.93M | 30.79M | EBIT |
| -39.28M | -36.92M | -93.78M | -83.22M | -5.44M | -14.75M | EBITDA |
| -38.97M | -36.20M | -89.98M | -79.23M | 9.75M | -14.65M | Net Income Common Stockholders |
| -38.47M | -37.80M | -93.15M | -83.78M | 7.39M | -18.97M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 26.61M | 24.92M | 9.63M | 80.19M | 122.36M | 13.59M | Total Assets |
| 39.83M | 60.42M | 50.02M | 136.13M | 178.15M | 51.54M | Total Debt |
| 3.52M | 3.99M | 14.41M | 14.92M | 12.63M | 14.14M | Net Debt |
| -23.09M | -20.93M | 4.78M | -65.27M | -109.73M | 547.57K | Total Liabilities |
| 13.20M | 28.10M | 30.34M | 55.29M | 25.85M | 21.43M | Stockholders Equity |
| 26.63M | 32.32M | 19.68M | 80.84M | 152.29M | 30.11M |
| Cash Flow | Free Cash Flow | ||||
| -27.15M | -21.84M | -88.68M | -48.24M | -15.95M | -2.04M | Operating Cash Flow |
| -26.99M | -21.68M | -88.01M | -47.51M | -15.57M | -1.93M | Investing Cash Flow |
| 17.39M | 146.21K | 6.33M | 4.27M | 14.62M | -105.76K | Financing Cash Flow |
| -4.37M | 36.83M | 11.11M | 1.07M | 109.72M | 9.33M |
Veru Technical Analysis
Negative
0.45
Price Trends
0.65
Negative
0.68
Negative
0.78
Negative
Market Momentum
-0.04
Negative
34.85
Neutral
14.13
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VERU, the sentiment is Negative. The current price of 0.45 is below the 20-day moving average (MA) of 0.53, below the 50-day MA of 0.65, and below the 200-day MA of 0.78, indicating a bearish trend. The MACD of -0.04 indicates Negative momentum. The RSI at 34.85 is Neutral, neither overbought nor oversold. The STOCH value of 14.13 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for VERU.
Veru Risk Analysis
Veru disclosed 57 risk factors in its most recent earnings report. Veru reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Veru Peers Comparison
Overall Rating
UnderperformOutperform
Sector (49)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
49 Neutral | $6.84B | 0.05 | -53.14% | 2.48% | 24.49% | -3.26% | |
44 Neutral | $72.28M | ― | -80.11% | ― | -7.43% | 69.03% | |
42 Neutral | $354.65M | ― | -121.94% | ― | -46.07% | 71.52% | |
41 Neutral | $63.37M | ― | 41.08% | ― | -0.55% | 49.85% | |
32 Underperform | $9.35M | ― | 234.90% | ― | ― | 46.67% |
* Healthcare Sector Average
Performance Comparison
VERU
Veru
0.45
-0.15
-25.00%
KPTI
Karyopharm Therapeutics
6.94
-13.16
-65.47%
SRNE
Sorrento Therapeutics
0.01
0.00
0.00%
BCLI
Brainstorm Cell Therapeutics
1.56
-3.37
-68.36%
CYDY
CytoDyn
0.21
0.04
23.53%
TSHA
Taysha Gene Therapies
1.72
-0.42
-19.63%
Veru Earnings Call Summary
Earnings Call Date: Feb 13, 2025 | % Change Since: -18.18% | Next Earnings Date: May 7, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted significant progress in clinical trials with enobosarm, showcasing positive results in muscle preservation and fat loss. The strategic sale of the FC2 business and financial gains from debt extinguishment were also notable. However, financial challenges such as the loss on sale of the FC2 business, increased R&D costs, negative cash flow, and limited cash runway were concerning.Highlights
Successful Phase 2b QUALITY Clinical Study
The Phase 2b QUALITY clinical study showed positive top line results for enobosarm, meeting its primary endpoint with a 71% relative reduction in lean mass loss (p-value of 0.002). The enobosarm 3-milligram dose achieved a greater than 99% mean relative reduction in lean mass loss (p-value < 0.001).
Enobosarm's Impact on Fat Loss
Enobosarm treatment resulted in a 46% greater relative loss of fat mass compared to placebo plus semaglutide group at 16 weeks (p-value of 0.014). The enobosarm 3-milligram dose led to a 99.1% fat loss.
Improvement in Physical Function
The enobosarm plus semaglutide group showed a 54.4% mean relative reduction in the proportion of subjects losing at least 10% stair climb power compared to the placebo group (p-value of 0.0049).
Strategic Focus on Biopharmaceutical Development
Veru sold its FC2 female condom business for $18 million, allowing the company to focus on drug development.
Financial Gains from Debt Extinguishment
Veru recorded a gain on extinguishment of debt of $8.6 million related to the termination of the residual royalty agreement.
Lowlights
Loss on Sale of FC2 Business
Veru experienced a $4.2 million loss on the sale of the FC2 female condom business, with net proceeds of $16.4 million compared to a total carrying value of $20.6 million.
Increased Research and Development Costs
Research and development costs increased significantly to $5.7 million from $1.7 million in the prior quarter, primarily due to expenses related to the enobosarm Phase 2b QUALITY clinical study.
Negative Cash Flow from Operations
Veru reported negative cash flow from operations, using $11.3 million for operating activities in the last quarter compared to $6 million in the prior period.
Limited Cash Runway
The company's current cash is not sufficient to fund operations for the next 15 months, although it can support activities until the end of the calendar year.
Company Guidance
During the recent investor conference call, Veru Inc. provided comprehensive guidance on its clinical progress and financial status. The company reported positive top-line results from the Phase 2b QUALITY study, demonstrating enobosarm's efficacy in preserving lean mass and augmenting fat loss in older obese patients, with a 71% relative reduction in lean mass loss and a p-value of 0.002. The 3 mg dose of enobosarm plus semaglutide showed a 99% mean relative reduction in lean mass loss (p-value <0.001) and a 46% greater relative loss of fat mass with the 6 mg dose compared to placebo plus semaglutide (p-value = 0.014). Veru also highlighted its strategic shift towards biopharmaceuticals following the sale of its FC2 female condom business, which generated net proceeds of $16.4 million. Financially, Veru reported a net loss of $1.8 million from continuing operations, with a total cash balance of $26.6 million as of December 31, 2024. The company plans to pursue a Phase III study for enobosarm, leveraging its promising Phase 2b results, and is exploring the development of sabizabulin for treating inflammation in atherosclerotic cardiovascular disease.Veru Corporate Events
M&A TransactionsBusiness Operations and Strategy
Veru Inc. Sells FC2 Business to Focus on Biopharma
Positive
Jan 3, 2025
Veru Inc. announced the sale of its FC2 Female Condom business to Clear Future, Inc. for $18 million. This divestment allows Veru to focus on its biopharmaceutical pursuits, particularly its late-stage clinical drug pipeline. The sale is expected to reduce Veru’s workforce significantly and provide approximately $12.5 million in proceeds, which will be used to further its strategic focus on developing treatments for cardiometabolic diseases and oncology. The sale also marks Veru’s transition away from non-pharmaceutical operations, aligning its resources towards innovative clinical trials and drug development in areas with significant unmet medical needs.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.