Veru Inc (VERU) 2025 Q1 法說會逐字稿

Good morning ladies and gentlemen, and welcome to Veru Inc investors conference call. (operator Instructions)

I would now like to turn the conference over to Mr. Sam Fisch, Veru Incantireceptor , executive Director, Investor Relations and corporate communications. Please go ahead.

The statements made on this conference call may be forward-looking statements. Forward-looking statements may include, but are not necessarily limited to statements of the company's plans, objectives, expectations, or intentions regarding its business operations, regulatory interactions, finances, and development of product portfolio.

Such forward-looking statements are subject to known and unknown risks and uncertainties, and our active results may differ significantly from those projected, suggested, or included in any forward-looking statements

Risks that may cause acts or results or developments to differ materially are contained in our 10 and 10k SEC filings, as well as in our press releases from time to time. I would now like to turn the conference call over to Doctor Mitchell Steiner, Veru Inc's Chairman, CEO, and President.

Good morning. With me on this morning's call, Dr. Gary Barnett, Chief Scientific Officer, Michelle Greco, Chief Financial Officer and Chief Administrative Officer, Michael Purvis, general counsel and executive Vice President of Corporate strategy, and Sam Fisch, the executive director of Investor relations and corporate communications.

Thank you for joining our Q1 fiscal year 2025 earnings call.

Bureau has evolved into a late clinical stage biopharmaceutical company focused on developing medicines for the treatment of cardio metabolic and inflammatory diseases. A drug development program consists of two clinical stage new chemical entities and enobosarm and sabizabulin. The enobosarm is an oral selective androgen receptor ,modulator, and it's being developed in a new generation of drugs that make GLP-1 receptor agonist weight reduction more tissue selective by preserving lean mass, which is muscle and physical function, and augmenting fat loss in older patients who are overweight who have obesity.

sabizabulin is an oral microtubules disruptor, and it's being developed as a broad anti-inflammatory agent to reduce inflammation, to slow the progression or promote the regression of atherosclerotic cardiovascular disease. On December 30, 2024, the company sold this FDA approved commercial product, the FC2 female condom.

Let's talk about our obesity program. Obesity, as defined by FDA, is a disease of excess body adiposity or fat. The medical objective is to treat obesity by weight reduction drugs or drugs in combination should be to reduce excess body fat to improve the morbidity and mortality associated with obesity.

GOP1 receptor agonists have been shown to produce significant weight loss in patients who are overweight and have obesity. Unfortunately, the weight loss is tissue non-selective with loss of both fat and lean mass.

Which contains muscle of the total weight loss, 20% to 50% of the total weight loss reported by patients was attributable to lean mass loss. According to Medicare, 22% of the US population is greater than 60 years of age. That represents $70 million people. Based on the Centers for Disease Control and Prevention data, 41.5% of older adults are obese and could benefit from weight reduction medication.

Up to 34.4% of patients over the age of 60 with obesity in the United States have what's called sarcopenic obesity. Sarcopenic obese patients are patients who have obesity and low muscle mass at the same time and are potentially at the greatest risk for developing critically low muscle mass when taking the current approved GOP-1 receptor agonists.

We therefore believe there is an urgent unmet need for a new generation of obesity drugs like cardiovascular.

That can prevent the loss of muscle and allow the preferential loss of fat in older patients who are overweight or have obesity receiving a GOP 1 receptor agonist therapies for weight reduction.

Enobosarm is a next generation drug that makes weight reduction by GOP 1 receptor agonist drugs more tissue selected for fat moss. Let's talk about our phase 2b quality clinical study update.

On January 27, 2025, the company announced positive top line results from the Phase 2B quality clinical study, which is a multi-center double-blind placebo controlled randomized dose finding clinical trial.

To evaluate the safety and efficacy of a Enobosarm 3 mg, no 6 mg, or placebo as a treatment to augment fat loss and prevent muscle loss in sarcopenia be overweight patients over the age of 60 receiving someagnotinecovi. The study was conducted in 14 clinical sites in the United States.

Phase 2b quality study is the first human study to report the effects of a muscle preservation drug candidate on body composition in older patients who have obesity who are overweight, receiving a GOP-1 receptor agonist. In the top line efficacy analysis, the trial met its pre-specified primary endpoint with a statistically significant.

A clinically meaningful benefit in the preservation of total lean body mass in all patients receiving the noon plus Semaglutide versus placebo plus semaglutide alone at 16 weeks. It was 71% relative reduction in lean mass loss, and that P value is 0.002. The Enobosarm 3 mg plus the magnetite was the best dose, which is a greater than 99% mean relative reduction in loss of lean mass.

That P value is less than 0.001, and the Enobosarm on 6 mg of magnified dose is not much better than the 6 not much better than the 3 mg of magnetized dose on lean mass. As for the secondary clinical endpoints, enobosarm on a magnetized treatment.

Resulted in the dose dependent greater loss of fat mass compared to placebo and Semaglutide alone with a 6 mg dose having a 46% greater relative loss of fat mass compared to placebo plus the magnetite group at 16 weeks, and that p value is 0.014.

Enobosarm and semaglutide significantly preserved lean mass, the additional loss of fat mass caused by a enobosarm treatment was able to replace the lean mass preserved to allow a similar net mean weight loss with the magnetite at 16 weeks.

Accordingly, the tissue composition of the total weight loss shifted to greater and selective loss of fat with the enobosarm treatment. The median percentage of total weight loss in the place semaglutide group that was due to lean mass was 32%, and the estimated fat loss was 68%.

In contrast, in the all and enobosarm plus magnetite group. Total weight loss due to lean mass was 9.4% versus estimated fat loss at 90.6%. And for enobosarm on 3 mg for semaglutide, it was a 0.9% lean mass.

Loss versus 99.1% fat loss. Therefore, in Nova on plus the magnetite improved changes in body composition resulting in more selective and greater loss of adiposity than subjects receiving placebo plus the magnetite.

Physical function physical function was measured by the stair climb test. Climbing stairs is an activity of daily living, and the stair climb test measures functional muscle strength, balance, and agility. Declines in performance measured by sterile clime tests predicts in older patients higher risk of mortality, mobility disabilities, gait difficulties, hospitalizations, falls, and bone fractures. As a point of reference.

Stair climb power declined by 1.38% annually with aging, according to Van Roy, and this is a +1 2019 reference.

A respondent's analysis was conducted using a greater than 10% decline in stair climb powers the cut off is 16 weeks.

That cutoff represents an 8 to 10 year loss of Stair climb power due to aging. In our study, the loss of lean mass mattered as 42.6% of patients on placebos and magnetite had at least a 10% decline in stair climb power physical function in 16 weeks. This is the first human study to demonstrate that older patients who are overweight or have obesity receiving some magnetite GOP 1 receptor agonists or at higher risk for accelerating loss of lean mass with physical function decline.

The all in enobosarm on semaglutide group had a statistically significant and clinically meaningful 54.4% mean wealth of production in the proportion of subjects that lost at least 10% Stair climb power compared to placebo plus the magnetite group. That P value is 0.0049.

In you know on 3 mg of semaglutide group, there was a 62.4% relative reduction in the proportion of patients with release a 10% decline in Stair climb power from baseline versus placebo for semaglutide, and that P value is 0.0066. In the enobosarm 6 mg for semaglutide group, it was a 46.2% relative reduction in the proportion of patients with at least a 10% decline in Stair climb power.

From baseline versus placebo plus the magnetite group and that P value is 0.0505.

Therefore, an enobosarm treatment preserved lean mass muscle, which translated into the reduction in proportion of patients that had a clinically significant Stair Climb physical function decline versus subjects receiving semaglutide alone.

The Enobosarm represents the next generation of drug that improves GOP-1 receptor agonist therapy to result in tissue selective quality weight reduction, that is an ozone plus the magnetite improved changes in body composition, which result in more selective and greater loss of adiposity, that's fat, and subjects receiving placebo plus the magnetite alone.

We're very excited about the TOP5 results. The FXC data provides a proof of concept that you can retain lean mass, improve physical function, and lose enough fat mass to make up for the lean mass retained to have the same weight loss as the magnified alone in 16 weeks.

Our expectation is that when patients are treated longer with the enobosarm of semaglutide, this selective and greater loss of adiposity should translate to greater quality weight reduction than with some semaglutide alone.

As for safety data for the phase 2b quality study remains blinded as the phase 2B extension clinical study portion is ongoing. The unblinded complete safety set will be available after the phase 2B extension study is completed. However, the aggregate blinded safety data has not shown any significant differences compared to previous studies in the Enobosarm and what is already expected with GOP 1 receptor agonists.

The Independent Data Monitoring Committee met this week, February 10, 2025, to evaluate the unblinded safety data, and they made the recommendation to continue the study as designed. So this week they met and made that recommendation.

After completing the efficacy dose finding portion of the phase 2b quality clinical study, the participants continued into the phase 2B extension trial where all patients have stopped treatment with semaglutide, but they continue taking placebo and Enobosarm 3 mg and Enobosarm 6 mg in a blinded fashion for 12 weeks. The phase 2B extension trial will evaluate whether the Enobosarm alone can maintain muscle and prevent fat regain that generally occurs after discontinuing the GOP 1 receptor agonist.

The topline results of the separate blinded phase to be extensive clinical study are expected in the 2nd quarter of calendar 2025.

The company plans to present the full clinical efficacy and safety data set for the phase 2B quality clinical study in future scientific conferences and publications after the phase 2B extension portion of the study is completed and unblinded.

As the Phase 2B quality study has positive top line clinical results, we plan to move forward to request an end of phase 2 meeting with FDA. We have previously met with FDA to discuss our regulatory path forward as an improvement in body composition drug, and the FDA has provided general advice on phase 3 design.

Based on the successful phase 2 quality clinical trial, we plan to run a similar study as a phase 3 study. The duration of treatment will be expected to be 52 weeks, which will allow us to also capture the longer term benefits of a no some improvements on body composition for greater loss of adiposity and weight reduction.

As for the novel Enobosarm modified release oral formulation, as Vera is currently developing a novel patentable modified release formulation for Enobosarm.

We anticipate the actual formulation, pharmacokinetic release profile and method of manufacturing will be subject to future patents.

The drug product formulation is currently in animal trials and is anticipated to be available for the phase 1 bioavailability clinical trial during the first half of calendar 2025. The expectation is that the oral notes on modified release drug formulation will be utilized for the phase 3 clinical studies and for commercialization.

My new program is the atherosclerosis inflammation Program. So given the recent positive TOP5 results from the phase 2B quality study, evaluating in Enobosarm is a cardio metabolic agent. It has the potential to preserve muscle and fat and overweight and obese patients receiving GLP-1 receptor agonist therapy for weight reduction.

Veru has evolved its drug development strategy for sabizabulin and is exploring the possibility of the clinical development of sabizabulin. Which is a novel oral broad anti-inflammatory agent for the treatment of the inflammation and atherosclerotic cardiovascular disease.

The company believes there are compelling scientific evidence and rationale to evaluate bus the treatment for inflammation associated with atherosclerotic cardiovascular disease. More specifically, atherosclerotic coronary artery disease remains the leading cause of mortality worldwide. Inflammation and high cholesterol jointly contribute to atherosclerotic cardiovascular disease.

It appears that the pathogenesis and progression of coronary artery disease, however, is largely driven by inflammation in response to the atheromatous plaques containing cholesterol in the arterial wall. Even with maximal cholesterol reduction therapies, there remains a major and largely untreated residual inflammation risk.

The realization that the combined use of aggressive lipid lowering and inflammation inhibiting therapies might be needed to further reduce atherosclerotic risk has sparked the search for anti-inflammatory medicines that can lower the risk of atherosclerotic events in patients with coronary artery disease. An old drug, colchicine, which inhibits tubulin polymerization to disrupt microtubules, resulting in broad anti-inflammatory activity.

Recent randomized controlled trials assessing the role of low dose coin to treat inflammation to reduce major adverse cardiovascular events have promising results demonstrating a reduction in cardiovascular risk.

Colchicine lowered major adverse cardiovascular events by 31% among those with stable coronary artery disease by 23% of patients following a recent myocardial infarction. This magnitude of benefit is greater than what has been observed in contemporary trials of lipid lowering agents, including those with PCSK9 inhibitors.

Data from these trials led the FDA just recently in June of 2024. To approve colchicine as the first anti-inflammatory drug for reducing cardiovascular events in patients with established atherosclerotic cardiovascular disease.

However, while colchicine may be the first FDA approved drug to treat atherosclerotic inflammation, unfortunately colchicine has significant safety concerns that may limit its expected widespread use. Colchicine has high potential for drug interactions with commonly used cardiovascular drugs, including almost all statins.

In contrast, Veru’s sabizabulin is a new molecular entity, small molecule that targets the colicine binding site of beta tubulin. Like colchicine, sabizabulin inhibits microtubule polymerization and has demonstrated the ability to reduce the most important inflammatory mediators that play a role in the initiation and the progression of atherosclerotic coronary artery disease.

Contrast colchicine. sabizabulin has stable pharmacokinetics, low potential for drug interactions, and thus sabizabulin may be administered potentially more safely as a secondary therapy in combination with statin therapy for the reduction of inflammation to slow the progression and promote the regression of atherosclerotic cardiovascular disease.

Overall preclinical data from the in vitro and vivo inflammatory studies show that subbibulin treatment suppressed all the cytokines and chemokines tested. And in phase 2 and phase 3 pulmonary inflammation, COVID-19 clinical studies, sabizabulin has demonstrated broad anti-inflammatory activity.

The safety database consists of 266 dose patients from previous sabizabulin and clinical development programs.

The company's decision to explore this major cardio metabolic indication. Was based on the significant unmet medical need to treat inflammation in our aosclerotic cardiovascular disease, the large global market opportunity, the current clinical safety sabizabulin database of 266 patients.

The high probability of success given that sabizabulin's drug mechanism of action is similar to col scene, strong intellectual property position, and it's consistent with the company's focus on cardio metabolic diseases. Furthermore, the company believes that busy may be evaluated in small phase 2 dose finding proof of concept study.

To assess the progression of coronary AR atherosclerosis in patients using the primary endpoint of coronary plaque volume composition measured by the coronary CT angiography imaging, the company decides to pursue the phase 2 clinical study. The company plans to partner with the Colorado Prevention Center in Aurora, Colorado and the Lundquist Institute in Torrance, California.

Veru has had this pre-IND meeting with the FDA Division of Cardiology and Nephrology Center for Drug Evaluation and Research in December 26, 2024. The indication of the discussion was the use of sabizabulin, the slow progression and promote the regression of atherosclerotic disease in patients.

Coronary artery disease, the FDA agreed that there remains an unmet medical need based on disease pathophysiology and concurred with the general design of the small phase 2 study using coronary CT angiography imaging as the primary endpoint.

The FDA also requested the company conduct chronic nonclinical toxicology animal studies to support the chronic use of sabizabulin for this indication. The chronic nonclinical animal studies are expected to be completed, and a new ID for the proposed indication is expected to be submitted by the first half of calendar 2026. Vera currently has sufficient drug substance to supply the proposed phase two clinical study.

Comment on the FC2 female condom sale on December 30, 2024, we sold our FC2 female condom business to an affiliate of Reva Ridge Capital Management LP, in New York City-based investment management firm for $18 million.

Adjustment is set forth in the purchase agreement which Michele Greco will discuss in a few moments. The monetization of the FC2 business allows Veru to be a pure biopharmaceutical company, focusing its additional non-dilutive resources on the execution and development of its promising late stage clinical pipeline.

I will now turn the call over to Michele Greco, CFO and CEO, to discuss the financial highlights, Michele.

Thank you, Dr. Steiner. As Dr. Steiner indicated, on December 30, 2024, Vera sold the FC2 female condom business to Clear Future Inc.

The purchase price was $18 million in cash subject to adjustment as set forth in the purchase agreement for the transaction.

Net proceeds from the sale of the FC2 female condom business were approximately $16.4 million after selling costs and other purchase price adjustments, but before a change of control payment of $4.2 million owed to SWK Holdings LLC pursuant to a residual royalty agreement for a 2018 financing transaction.

The loss on the sale of the FC2 female condom business is approximately $4.2 million. The difference between the estimated net proceeds of $16.4 million and the total carrying value of the FC2 business of $20.6 million.

On December 30, 2024, the carrying value of the FC2 female condom business was comprised primarily of deferred income tax assets of $12.3 million accounts receivable of $4.6 million and inventory of $3.4 million partially offset by accrued expenses and other current liabilities of $1.5 million.

Liabilities associated with the residual royalty agreement, which totalled $9.9 million at September 30, 2024, were extinguished.

The sale of the FC2 female condom business represents a change in strategy, allowing the company to focus all of its efforts exclusively on drug development and also affects how we present our operations and financial results. In our financial statements, all direct revenues, costs, and expenses related to the FC2 female condom business are classified within the loss from discontinued operations net of tax in the statements of operations.

Let's review the results for the three months end of December 31, 2024.

Research and development costs increased to $5.7 million from $1.7 million in the prior quarter.

The increase is due to $4.3 million in expenses related to the company's Enobosarm phase 2b quality clinical study for higher quality weight loss.

Selling general and administrative expenses were $5.2 million compared to $6.7 million in the prior quarter.

The decrease is primarily due to a decrease in share-based compensation and a decrease in headcount from 23 to 22.

We recognize the gain on the sale of assets of $695,000 compared to a gain of $918,000 in the prior quarter, which is based on nonrefundable consideration received related to promissory notes due to bureau.

In conjunction with the sale of the FC2 female condom business, we recorded a gain on extinguishment of debt of $8.6 million related to the termination of the residual royalty agreement.

This represents the difference between the change of control payment of $4.2 million and the net carrying amount of the extinguished debt of $12.8 million which included an embedded derivative for the change of control provision a fair value of $4.7 million.

The bottom line result for continuing operations was a net loss of $1.8 million or $0.01 per diluted common share compared to a net loss of $7.7 million or $0.08 per diluted common share in the prior year's quarter.

Net loss from discontinued operations and net of taxes related to the FC2 business was $7.1 million or $0.05 per diluted common share, including the $4.2 million dollar loss on the sale of the FC2 business compared to a net loss of $609,000 or $0.01 per diluted common share in the prior quarter.

The increase in the net loss from discontinued operations of $6.5 million is due to the loss on the sale of the FC2 female condom business and the increase in the loss from the change in fair value of derivative liabilities of $3.1 million partially offset by an increase in gross profit of $400,000 and a decrease in selling general and administrative expenses of $500,000.

Now looking at the balance sheet.

As of December 31, 2024, are cash equivalents and restricted cash balance was $26.6 million compared to $24.9 million as of September 30, 2024.

At December 30, 2024, there was $354,000 of restricted cash related to the sale of the FC2 female condom business.

Our networking capital was $22 million on December 31, 2024 compared to $23.4 million on September 30, 2024.

The company is not profitable and has negative cash flow from operations. We will need additional capital to support our drug development candidates. Based upon the company's current operating plan. Our cash is that the issuance state of these financial statements, is not sufficient for the company to fund operations for the next 15 months.

However, we currently have sufficient capital to take the company to the end of the calendar year, which is well beyond the data readout for Enobosarm phase 2. The Quality extension study.

During the three months ended December 30, 2024, we used cash of $11.3 million for operating activities compared with $6 million used for operating activities in the prior period.

We generated cash from investing activities of $17.2 million for the three months ended December 30, 2024, while there was none generated in the prior period.

The cash generated relates to proceeds from the sale of the FC2 female condom business of $16.2 million proceeds of $700,000 from the sale of the ENTADF assets, and proceeds of $400,000 from the sale of on kinetic securities.

We use cash in financing activities for the three months end of December 30, 2024 of $4.2 million related to the change of control payment to SWK pursuant to the residual royalty agreement, which terminated in conjunction with the sale of the FC2 female condom business.

In the prior period, we generated $37 million from financing activities. On December 18, 2023, we completed an underwritten public offering of our common stock which included the exercise in full of the underwriter's option to purchase additional shares. Net proceeds to the company from this offering were approximately $35.2 million after deducting underwriting discounts and commissions and costs incurred by the company.

Now, I'd like to turn the call back to Doctor Steiner.

Thank you, Michel. So we've gone over the company, clinical progress and financial highlights. With that, I'll now open the call to questions operator.

(operator Instructions).

William Wood, B Riley.

All right, thanks to everybody. I appreciate you taking our questions and obviously, congratulations on the very nice quarter and the results. .

Thank you.

I guess, maybe first off, if I could, for the extension trial, I'm just kind of curious what the rollover of patients from the induction to the maintenance portion is, and maybe if you could provide any color on why patients may be discontinuing if so.

Yeah, so I'm going to ask Dr. Gary Barnette, our Chief Scientific Officer, to answer the question of basically asking for the dropout rate or who didn't go on to the extension study, and then he'll answer that for you and he'll tell you the number one reason why they dropped out, Gary.

Yeah, hello. As Mitch has said previously, the dropout rate in the study is about 13%, and it continues to be that. So about 13% of the randomized subjects did not reach the will not reach the extension, etc. The most common reason for dropping out of the study or discontinuing the study is the GI side effects, which, as we all know, associated with GOP1 RAs themselves. So it's relatively expected what we're seeing.

And and I assume the potential difference between placebo versus treatment isn't disclosed yet and we'll get that information more at the end.

That is correct. That'll be in the final analysis of the study, especially the safety state right now remains blinded.

Right. And then one quick last one, you, you've been saying, you're now saying 2nd quarter for the induction, I'm sorry, for the maintenance readout, I'm just curious, I believe you were saying sort of more April, maybe even early May. Have these been, has this been now pushed out a little bit more or you just, or relatively no changes here?

It's relatively no changes. I just, I just, yeah, so, we're guiding the second quarter. But nothing's changed. I mean, 12 weeks of, 12 weeks or 12, we know when the last patient went out in December we reported exactly as we told you we're going to do for the phase one, for the phase 2 equality, and, 12 weeks or 12 weeks can't shorten that and you can't make that longer.

So the time span that that we need after the 12 weeks when the last patient comes out of the studies just literally scrubbing the data and getting the tables, listings and figures and that kind of stuff.

Yes, that makes sense. I appreciate you taking my questions. I'll hope back in Q.

Thank you.

Gary Nachman, Raymond James.

Hey guys, good morning. This is Gary Nachman on for Gary Barnette. Just a couple of questions from us. First, talk a little bit more about your thoughts going into the extension trial data in the 2nd quarter. What are you hoping to show and what is the bar for success, particularly on the weight regain following the GLP-1 discontinuation? Can you remind us what your assumptions are for the placebo arm and then what are your expectations for the enobosarm ?

And then I got another follow up.

Yes, so the way to think of the maintenance study is no one has actually let's say it a different way, it's an exploratory extension where we're trying to show. That in nova song that has the ability to hold on to muscle, the working hypothesis is that muscle, if you hold on to muscle, you should not see the rebound weight gain, which is fat because you know the muscles aren't the issue. The muscles depleted, so it's all about fat and the regain that patients get, it's all fat.

So, the way to think of the extension for just 12 weeks, it's not the weight as much as it's the fat because fat tracks weight. So it's purely an adiposity.

So, the enobosarm holds muscle, so you have more muscle in that 12 week period of time so you can burn more fat, and the enobosarm itself, as you saw the 6 mg group had a 46% further reduction in fat compared to magnetite alone. So it's a fat burner.

So, what we want to show, and this is what people were afraid of, is the rebound weight gain is all fat. So we want, so we were focusing most of our thinking around can we stop that rebound fat regain and or maybe even show you more fat loss because the noon burns fat as it goes forward. So I'm going to have Gary Barnette, our Chief Scientific Officer, add a few comments to that.

Yes, so, as when you take away the glp one, appetite returns, and we've seen that in the, in the studies with the glp ones. So we do expect weight gain and we specifically expect fat gain in the in the placebo group and it's going to be interesting to see exactly how a enobosarm can minimize that fat regain.

While maintaining the muscles or the lean mass in this case. So, that, that's what we expect to see. Obviously, the data will bear out exactly and we're looking forward to that result here coming in the 2nd quarter.

Yeah, so if we can show we can blunt the fat and potentially blunt the weight regain, but if you focus on fat and hold muscles constant, and you know that's what you're gaining weight with the fat. So I think the focus on fat, because we're using body composition as our end point.

Okay, great, that was super helpful. And then just another couple quick follow ups, for the safety monitoring committee that met earlier this week, can you talk specifically about what kind of patient safety data they looked at, how far out went into? And then now that you just had a little bit more time with the 16 week data, are you finding anything notable within the patient sites or the patient background characteristics that is abnormal that should be called out. Thanks so much guys.

Yes, good question. So the answer to the second question and I have Gary answer the first question on what kinds of data that the independent data monitoring committee see. But in terms of your question, remember we only got top line data.

So, there's not much additional stuff to talk about. I mean, the baseline characteristics with group characteristics. We don't have individual data. So the top line data we're going to get the full data set, the individual data set, and the studies I'm blinded

Then at that point we can go through and look and see, it's not so much what's abnormal and what's normal. I mean big questions for me. It's going to be, which groups are the best, which groups are the worst, how do you think about that as you go forward with your phase 3 program, you know what additional information you can learn about gender and things of that sort.

And, so I think we're going to get a lot more information we just don't have, but for topline data because it's kind of think of it as an interim look and then the study continues, we got a very set of data.

That makes sense, but so there's not much more to say at this point, except that we're extremely excited about the outcome because it answered the questions we wanted to answer and remember enobosarm in 5 other studies is a 3 mg dose particularly because that's what Bridge says to this study.

We never study above 3 mg in muscle studies we've done it in multiple dose studies. And 3 mg was our bridge. It worked every time, guess what, it worked again. So we, it's unambiguous. We definitely can improve and stop the loss of lean mass.

What was also exciting is also confirmed the ability to burn fat in a patient population on a GLP-1. So that was exciting. And then third, you were able to keep the lean mass, get rid of more fat to a point at the 3 mg, 99% of the total weight you lost was fat and 1% less than 1% was mass, and you still have the same weight loss at 16 weeks.

And finally we showed that physical function matters in these patients and that we were able to show there's a problem and that 42.6%. Of patients of the magnetite alone at 16 weeks had, greater than 10% decline in stair climb, which is like 8 to 10 years of your aging. Loss of stair climbing.

So I mean that to me that's a home run and that really helps us think very positively about our program going forward because it's better to fix a problem than to, TRY to have a better H HbA1C or better insulin resistance we expect to see all of that, but better, meaning the GLP-1 does a great job with that. So you have to make it better than the GLP-1, whereas the GLP-1 does affect function in a negative way, we make it better.

But in terms of the data for the IDMC, Gary, what kind of, what does the IDMCC?

Yes, they see individual patient data, individual safety data all the way down again to the patient level. They see it broken out within the traditional tables and they also see the dose of the randomization scheme.

The data that this particular IDMC saw was up to a cutoff of December 20th, 2024, which included all subjects had passed through or completed the day 112 visits and then some additional data in the extension. Was included in this review.

So, they review down to the individual patients with the patients demographics and background and medical history and con meds, and they get all that information and also including their treatment assignments.

That's super helpful. Thanks guys, and congrats on all the progress.

Great thank you.

Dennis Ding, Jeffrey's

Good morning. This is Anthea on for Dennis. Just a couple questions from us on enobosarm. Given the oral formulation that you're working on the new one, is there a potential for it to be combined with oral GLP 1 as a fix dose combo? I'm curious if you've looked into that and if you could pursue a partnership on that. And then, sabizabulin's.

Colchicine, I believe works through HSCRP reduction. So can you just remind us what percent reduction they get and what the sabizabulin and does, and given your current cash position, your confidence that phase 2 would be feasible.

Thank you.

All right, so I have a clarification on your second question. So what did you say sabizabulin's mechanism was?

HSCRP reduction, C-reactive protein.

Oh, I got you. So you're talking about, I got you. That's the that's the sensitive CRP. So CRP is a non-specific inflammatory protein.

So, yes, so really it's not the non-specific inflammatory protein is a result of broad anti-inflammatory activity and so yeah, so got it.

Okay, so the first question about oral formulation in the oral formulation, the expectation is we know from the enobosarm is a very nice oral product, highly bioavailable, and so yes we're working on a new oral formulations to modify the release, but we can be easily combined with an oral GOP1.

And so yes, that has come up with some of our discussions because people feel that a fixed combination does makes the most sense, particularly we asked the question what are we trying to do. So we think about. At GOP one, it creates a Hypochlorous state.

The Hypochlorous state allows your body to non-selectively lose fat and muscle, and it's just non-selective low calorie state and in comes a enobosarm and just a enobosarm telling muscle to take on, to steal the calories and take it from fat allows you to hold on to muscle in that low calorie state and burn more fat.

So, if you want to make the GOP one better, you better add an Enobosarm and that to me is the definition of a new generation obesity. So the answer is yes, because we're all, and if you look at our competition is IV or sub 2.

The only other one that was oral was no longer pursuing activities, but the other one's ideas of and then, and function has physical function has been very difficult to show and we, we've shown over and over physical function again we hit on physical function in this study.

So, if you want to do a fixed combination. And make the drug make the GLP1 more tissue selective and have the functional benefit, I think it would be very attractive and so yes it's come up as it relates to sabizabulin and the colchicine. I'm telling you and all I ask that we've done preclinically, colchicine is used as a positive control.

So, everything colchicine does sabizabulin does. What's different is sabizabulin is a different kind of molecule, so it's not substrate for peak like protein at 384

And that plays a bigger role in the drug interactions that can happen. colchicine, has a very low therapeutic index, narrow therapeutic index, and if you have a drug interaction, you can push colicine levels to toxic levels, and that's one of the reasons why. It's not, it's not, picked up widespread use. Yes, CRP, high sensitive CRP is a, is a measurement that you would use, peripherally in these patients.

Which, sabizabulin should easily do the same thing given that all the cytokines and chemokines that we've measured, have, statistically significant reductions both in vivo and in vitro so we measured the actual cytokines that cause C-reactive protein to go up, C-reactive protein against the CRP high sensitive CRP, with that said.

Because we don't have the drug interactions, and this is the excitement about bun is that, one of the things that people are thinking about is you want to take patients with atherosclerotic disease and suppress the lipid as much as possible.

It's all about suppressing LDL, but once you suppress LDL, there's still a lot of risk left to a point that, heart disease, in particular, ischemic MIs is still the number one killer. So there's still residual risk, and they believe that inflammation is the reason for that. So that's why colchicine got approved.

And but the problem is you can't get colchicine with a lipid lowering drug because the drug interactions with statins. So imagine sabizabulin that you don't have to convince anybody that we have the same mechanism as colchicine from an inflammatory standpoint, but it becomes a safety play.

This I'm a urologist and this reminds me of the days when Abiraterone and ketoconazole were being developed. Ketoconazole is an old drug that's been shown to reduce castrate males, and they were given to patients with advanced prostate cancer, but it had side effects. Abiraterone came in and had a better safety profile, and it's not generic, and the pharma company owned it and had long enough IP became a blockbuster.

So it's okay sometimes to come in and not be innovative and be the first anti-inflammatory agent for for coronary artery disease, but to be one that has the same mechanism of action but a different safety profile and oral and proprietary makes it very attractive, meaning that the high probability of success with the efficacy and it will play out.

And, especially if you do a small study like we're thinking about the phase two where plaque measurements like CT coronary angiography can be, give you the information you need to move forward. So that's what we're excited about as it relates to cash, as Michelle said in her comments, we have enough cash to last until the end of the end of the year, the end of the calendar year, that's the end of December. And.

Sorry, if I could ask a follow up on that, so.

What is there a numerical HSCRP reduction that's been measured for the sabizabulin or no.

No, we've not taken patients with coronary artery disease and treated a patient to see what happens to CRP. What we have done is you got.

If I could also ask, how are you thinking about IL 6 and their 7,% ,8% and 9% HSCRP reduction profile in AS CBD.

Yes, so IL 6, as is not oral, right?

Right.

It was injectable and so our expectation is that IL 6 is one of the many cytokines that's responsible for the inflammation related to coronary artery disease, and this reminds us of the same battle we had with COVID, IL 6 versus sabizabulin.

sabizabulin did, a much better job. We had a reduction of 50% and these other agents were more like 5%. So I do think that inflammation is not one cytokine, and if you have a pancytopenia approach, which is what colchicine does and what sabizabulin does, that that should be much more effective than a single knocking out a single cytokine in this particular disease.

Got it, that's really helpful.

Thank you so much.

(operator Instrcutions). [Lelandersel of Oppenheimer].

Hey, good morning. Thanks for the updates. Mitch, as you've been studying enobosarm in the older population, obviously those at risk of sarcopenic obesity and seeing the data you have obviously very encouraging. Just wondering if your thoughts as you take the compound forward into registration, if you'll include a means to study it, maybe in a broader population of people who are not as old, given that there's also maybe risk of muscle loss. A weight loss. Thank you.

Good question. So first, the statistics. It turns out, as I mentioned, that 22% of the population based on Medicare over the age of 60, 42% of those patients could benefit from a weight reduction drug because they're overweight or obese, and a third of them have true sarcopenic obesity. So that's a big market, okay, big market.

Now the question is, how about outside that market? It turns out if you look at just forget age, this, the data shows that &31 million Americans have sarcopenia and they're obese. So that presumably includes the patients who are younger.

And so the idea is from a clinical benefit risk profile mostly is to treat patients that have a problem and the older patients are more likely because as you know we didn't screen for sarcopenia, we just took over the age of 60 and still 42.6% of those patients had a greater than 10% decline in GOP 1.

So, this is actually showing you with semaglutide tests that patients were in trouble and people were talking about it, but if you do a 6 minute walk test and an endurance test, that's different. But if you do a test that's focusing on leg muscles and muscles that are important for what they call explosive force, getting out of a chair, getting out of the tub, going upstairs, that's different. And those are the muscle types it's called type 2 muscle that goes away with age.

And so when you treat with an enobosarm or testosterone type product, you build back the type 2 muscle and that's why you see function. So it's the difference between taking an endurance runner and an older patient. I mean, the endurance runner is not going to be able to lift heavy weights like a bodybuilder, but they can certainly run 6 miles or 10 miles or whatever.

So we focus primarily on the activities of daily living that matter to patients. But with that said, the FDA has told us that a drug of this nature would have benefit in younger patients as well.

So if that's the case, Gary Barnett, who's on the call, has a strategy to address that, in our phase three.

Gary, do you want to talk about that?

Yes, obviously if the FDA asked for a more broader age population and if we deem it appropriate, what I would do is I would design a study with powered with statistical power on efficacy on the older population.

And include the younger population as observational and maybe have an overall analysis for every randomized subject but do a subgroup as the primary meaning older over 60, the group we just ran with the additional efficacy and safety data generated in the younger population to support broadening the label, if appropriate.

Great, thank you. And just a follow-up question, just wanted to confirm that when Veru does report the extension data from the second part of the quality study coming up in a few months, if you'll also be including the, full complement of the safety observations from both parts of the study.

Yeah, so the questions. So when the study is unblinded and we're reporting the phase 2B extension study, will we be reporting the full safety data set? Is that the question?

Yes, that's right.

Yes, the answer is yes.

Okay, great, thanks for taking the questions.

Ladies and gentlemen, this concludes our question and answer session. I would like to turn the conference back over to Doctor Mitchell Steiner for any closing remarks.

Great, thank you. I appreciate everyone who joined our call today and I look forward to updating you on our progress and excited about the prospects of the Enobosarm, not only in patients in the phase 2B studied but also an extension study, and again, thank you all for being on the call.

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