Veru Inc (VERU) 2026 Q1 法說會逐字稿

Good morning, ladies and gentlemen, and welcome to Veru Inc.'s investors conference call. (Operator Instructions). Please note this event is being recorded.

I would now like to turn the conference call over to Mr. Sam Fisch, Veru Inc.'s Executive Director, Investor Relations and Corporate Communications. Please go ahead.

Good morning. 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 and product portfolio.

Such forward-looking statements are subject to known and unknown risks and uncertainties, and our actual results may differ significantly from those projected, suggested or included in any forward-looking statements. Risks that may cause actual results or developments to differ materially are contained in our 10-Q and 10-K SEC filings as well as in our press releases from time-to-time.

I would now like to turn the conference call over to Dr. Mitchell Steiner, Veru Inc.'s Chairman, CEO and President.

Good morning. With me on this morning's call are Dr. Gary Barnette, our Chief Scientific Officer; Michele Greco, our Chief Financial Officer and Chief Administrative Officer; Phil Greenberg, General Counsel; and Sam Fisch, Executive Director of Investor Relations and Corporate Communications. Thank you for joining our first-quarter fiscal year 2026 earnings call.

Veru is a late clinical stage biopharmaceutical company focused on developing novel medicines for the treatment of cardiometabolic and inflammatory diseases. Our drug development program consists of two new chemical entity small molecules, enobosarm and sabizabulin. The first one, enobosarm, is an oral selective androgen receptor modulator, SARM, and is being developed as a next-generation drug that when combined with a GLP-1 receptor agonist.

And as demonstrated in our company's recently completed Phase II quality study makes weight reduction more tissue selective to fat loss and preservation of lean mass and physical function, which is intended to lead to greater weight loss compared to GLP-1 receptor treatment -- receptor agonist treatment alone with a focus on older patients with obesity.

Our second asset, sabizabulin, a microtubule disruptor is being developed as a broad anti-inflammatory agent to reduce vascular plaque inflammation to slow the progression or promote the regression of atherosclerotic cardiovascular disease. This morning, we will focus on the update of our obesity program, and we will also provide financial highlights for fiscal 2026 first-quarter ended December 31, 2025.

GLP-1 receptor agonists have been shown to produce significant weight loss in patients who overweight or have obesity. Unfortunately, this weight loss is tissue nonselective with the indiscriminate significant loss of both lean mass and fat. Of the total weight loss, up to 50% is attributable to lean mass. Although the GLP-1 receptor agonist treatment has resulted in profound weight loss for many patients.

The strategy for the next generation of obesity drugs should be a combination therapy with a GLP-1 receptor agonist for patients to lose fat only while preserving lean mass and physical function and bone mineral density for the highest quality weight reduction. Veru's completed positive Phase IIb quality clinical trial conducted in 168 older patients with obesity provided a proof of concept that enobosarm could be that next-generation drug in combination with the GLP-1 receptor agonist to make the weight loss journey more selective for only fat loss while preserving lean mass and physical function during the active weight loss period.

But also notably, after semaglutide was discontinued, enobosarm monotherapy significantly prevented the regain of both weight body weight and fat mass such that by the end of the 28-week study, there was greater loss of fat mass while preserving lean mass for higher quality weight reduction compared to the placebo group.

In September of 2025, we announced a successful FDA meeting, providing regulatory clarity for the development of enobosarm in combination with GLP-1 receptor agonist for greater quality weight loss and treatment of obesity. According to FDA feedback, there are at least two possible regulatory pathways for the development of the enobosarm in combination with GLP-1 receptor agonist treatment for obesity with preservation of lean mass, which are based on incremental weight loss.

First, incremental weight loss with at least a 5% placebo-corrected weight loss difference at 52-weeks of maintenance treatment with the enobosarm in combination with GLP-1 receptor agonist treatment compared to GLP-1 receptor agonist treatment alone may be an acceptable primary endpoint to support efficacy for approval.

Second, if the incremental weight loss is less than 5% corrected weight loss, including similar weight loss at 52 weeks of maintenance treatment with enobosarm in combination with GLP-1 receptor agonist treatment compared to GLP-1 receptor agonist treatment alone. But the enobosarm treatment group demonstrates a clinically significant positive benefit such as a statistically significant and clinically meaningful benefit in the preservation of physical function. This may also be acceptable to support efficacy for approval.

FDA also confirmed that enobosarm three milligrams is an acceptable dosage for future clinical development. Now coincidentally, on December 19, 2025, the FDA announced that total hip bone mineral density, that's BMD, assessed by DXA scan qualifies as a validated surrogate endpoint for drug development in postmenopausal women with osteoporosis at risk for fracture instead of the current standard that requires Phase III clinical studies must use bone fractures as a primary endpoint.

This is relevant for our enobosarm obesity program as it's been reported in the scientific literature the GLP-1 receptor agonist therapy affects body composition by also reducing hip BMD. In fact, the semaglutide Wegovy FDA label has recently been updated to include the safety concern of increased risk of hip and pelvic fractures based on the SELECT cardiovascular trial, which is sponsored by Novo Nordisk in over 17,000 subjects.

In the SELECT trial, four to five times more hip fractures of the hip and pelvis were reported on Wegovy than in placebo in female patients and in all patients aged 75 and older. The good news for our enobosarm obesity program is that in previously published preclinical studies and rat models of postmenopausal female osteoporosis, enobosarm has been shown to have both anabolic and antiresorptive activities that result in increased bone mineral density.

Consequently, this means that distinct from incremental weight loss, muscle preservation and physical function as primary endpoint, improving BMD in postmenopausal women with obesity receiving a GLP-1 receptor agonist who also have osteoporosis can be another primary endpoint going forward for enobosarm to seek regulatory approval for improving body composition.

Now let's turn to the current status of our planned Phase IIb PLATEAU clinical study. A common and serious clinical and therapeutic challenge of GLP-1 receptor agonist treatment that 88% of patients with obesity after one-year on a GLP-1 receptor agonist drug hit a weight loss plateau where they stop losing additional weight. This is based on the SURMOUNT-1 study conducted by Eli Lilly and Company.

Unfortunately, 62.6% of these patients still have clinical obesity at the time they reach a weight loss plateau. One explanation might be that the loss of muscle may stimulate appetite in patients receiving a GLP-1 receptor agonist to consume more calories, which may be an important reason why patients hit that weight loss plateau.

Enobosarm has been shown in clinical studies to directly burn fat to preserve muscle to increase physical function and to burn more calories, which could help break through the weight loss plateau, leading to incremental weight reduction. Veru's planned Phase IIb PLATEAU clinical study is a double-blind, placebo-controlled study to evaluate the effect of enobosarm three-milligrams on total body weight, fat mass, lean mass, physical function, bone mineral density and safety in approximately 200 older patients aged greater or equal to 65-years of age who have obesity with a BMI of greater or equal 35 and are initiating semaglutide treatment for weight reduction.

The primary efficacy endpoint of the study is the percent change from baseline and total body weight at 68-weeks. An interim analysis will be conducted at 34-weeks to assess the percent change from baseline in lean body mass and fat mass as measured by DXA scan. The key secondary endpoints are total fat mass, total lean mass, physical function using the stair climb test, bone mineral density and a patient reported outcome questionnaires for physical function, HbA1c and insulin resistance.

Semaglutide was selected as a GLP-1 receptor agonist for the Phase IIb plateau study to build on Veru's previous clinical experience using enobosarm in combination with semaglutide in the Phase IIb quality clinical study. Further, there's now an oral form of semaglutide, which may be used in combination with oral enobosarm in future Phase III clinical studies, making the potential bridging of the future Phase III clinical studies data to the Phase IIb PLATEAU enobosarm plus injectable semaglutide data possible.

In contrast, tirzepatide injectable does not have an oral formulation. The principal investigator for the Phase IIb PLATEAU clinical trial will be again, Steven Heymsfield, MD, Professor and the Director of the Body Composition-Metabolism Laboratory at the Pennington Biomedical Research Center in Baton Rouge, Louisiana.

The clinical study is expected to begin this quarter and interim analysis to assess change in lean body mass and fat mass as measured by DXA will be conducted at 34-weeks, which is anticipated to be in the first-quarter of calendar year 2027.

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

Thank you, Dr. Steiner. On October 31, 2025, Veru completed an underwritten public offering of 1.4 million shares of our common stock, prefunded warrants to purchase up to 7 million shares of our common stock, accompanying Series A warrants to purchase up to 8.4 million shares of our common stock and accompanying Series B warrants to purchase up to 8.4 million shares of our common stock at a public offering price of $3 per share of common stock and the accompanying Series A and Series B warrants.

Net proceeds to the company from this offering were approximately $23.4 million after deducting underwriting costs and discounts paid by the company. In the prior year period, on December 30, 2024, Veru sold the FC2 Female Condom business to Clear Future Inc. In our financial statements, all direct revenues, costs and expenses related to the FC2 Female Condom business are classified within loss from discontinued operations, net of tax in the statements of operations.

Now let's review the results for the three-months ended December 31, 2025. Research and development costs decreased to $1.3 million from $5.7 million in the three-months ended December 31, 2024. The decrease is primarily due to a wind down of the Phase IIb quality clinical study for enobosarm as a treatment to augment fat loss and prevent muscle loss, which was completed during fiscal 2025.

General and administrative expenses were $4.1 million compared to $5.2 million in the prior quarter. The decrease is primarily due to a decrease in share-based compensation. We recognized a gain on the sale of ENTADFI assets of $695,000 in the prior quarter, which is based on non-refundable consideration received related to promissory notes previously due to Veru.

As the promissory notes are now settled, no additional gain is expected in future periods. In conjunction with the sale of the FC2 Female Condom business, we recorded a gain on extinguishment of debt of $8.6 million in the prior year's quarter related to the termination of the residual royalty agreement. During the prior fiscal year, the company entered into a settlement agreement with Onconetix Inc, whereby the company received a cash payment of $6.3 million in Series D preferred stock and warrant, which had a combined fair value of $2.5 million.

The loss associated with the change in fair value of securities held related to Onconetix was $0.1 million compared with $0.3 million for the prior period. The bottom-line result was a net loss of $5.3 million or $0.26 per diluted common share compared to a net loss of $8.9 million or $0.61 per diluted common share in the prior year's quarter.

For the prior period's quarter, the net loss included a net loss of $7.1 million from discontinued operations. Now looking at the balance sheet. As of December 31, 2025, our cash, cash equivalents and restricted cash balance was $33 million compared to $15.8 million as of September 30, 2025. On both December 31, 2025, and September 30, 2025, there was $0.1 million of restricted cash related to the sale of the FC2 Female Condom business.

Our net working capital was $29.7 million as of December 31, 2025, compared to $11.1 million as of September 30, 2025. The company is not profitable and has had negative cash flow from operations. Based on the company's current operating plan, our cash as of the issuance date of these financial statements is expected to be sufficient for the company to fund operations through the interim analysis in the Phase IIb PLATEAU clinical study to assess percent change from baseline in lean body mass and fat mass as measured by DXA scans.

During the three-months ended December 31, 2025, we used cash of $6.2 million for operating activities compared with $11.3 million used for operating activities in the prior period. There was no cash generated from investing activities in the current period. For the three-months ended December 31, 2024, we generated cash from investing activities of $17.2 million, primarily from proceeds from the sale of the FC2 female condom business of $16.2 million.

Net cash provided by financing activities for the three-months ended December 31, 2025, was $23.4 million, which were the proceeds from the sale of common stock and warrants in an underwritten public offering, net of commissions and costs. We used cash in financing activities for the three-months ended December 31, 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.

Now I'd like to turn the call back to Dr. Steiner. Dr. Steiner?

Thank you, Michele. With that, we'll now open the call to questions. Operator?

(Operator Instructions) Edward Nash, Canaccord.

I wanted to first ask a couple of questions. One was why not use the oral semaglutide in this study as opposed to having the optionality in the Phase III? Is it just because of it's relatively new now, it's lack of real-world data?

I think the reason is that we're trying to minimize the potential difference between what we saw in the Phase IIb QUALITY study and what we want to see in the PLATEAU study. And so the oral form is not exactly the same as the injectable. The injectable is a little bit better. So that means that we show what we need to show in the Phase IIb PLATEAU study, then we should see even a better response with an oral semaglutide doesn't do as well as the injectable.

So really, it has been calculated took a step back and said, why do we want to change in tirzepatide now and essentially created a completely different study with different outcomes potentially. So we're trying to be safe as we move towards. Now with that said, semaglutide is the active ingredient in both the injectable and the oral. And so that could be easily bridged.

And what you're trying to bridge is not the efficacy because we're going to be testing the efficacy in the Phase III. What you want to bridge is into all the safety, and you should be able to do that.

Got it. And just one follow-up is on the -- with regards to the function aspect, functional aspect of the FDA allowing that as a potential approval pathway, preservation of function. Did you guys specifically discuss with the agency about stair climb test and the specific questionnaires that you're looking to employ to determine whether or not they consider those to be sufficient to -- for that endpoint?

Yes. So yes, we did speak to the agency specifically about stair climb. As you know, we've done five now with the QUALITY studies, six studies previously done with enobosarm and done by our company here at Veru with 1,000 patients using stair climb. So we have 20 years' experience with stair climb. And it's not just talking to the agency with this trial and other trials, but also every major scientific group.

And stair climb still comes out as the best way to measure what's happening in this patient population. It's most sensitive to declines and it's very sensitive to anabolic intervention. With that said, the main comment that the FDA brought up was in the conduct of the study, we wanted to make sure that we did a duplicate stair climb runs. In other words, patient goes up to stairs once and it goes up second and then you average that. And they also want to make sure that in addition to loaded that we did unloaded.

What that means is that when a patient goes up to stairs, the unloaded means they just go up just as they are. Loaded means that you add a backpack with some weight and the concept there is kind of clever, is that we're trying to normalize weight. And the way you normalize weight is that you just add back the weight that they lost when they come back to that final visit and you do that with the plate.

And so this way, you're actually measuring and challenging the patient's muscle. So -- and that's why it becomes such a sensitive measure of intervention. And so we had those kinds of discussions with the FDA. What's open is -- and what we're going to focus on in the plateau study is also what happens with the patient-reported outcomes and how the patient reported outcomes helps to further define how patient functions and feels. And so that's why the Phase II makes more sense than jump into a Phase III because that will help with the clinical meaningfulness of what we're actually measuring objectively.

Rohan Mathur, Oppenheimer.

This is Rohan on for Leland. I just wanted to ask on the interim analysis plans. Are there any prespecified decision rules with respect to futility or alteration of the sample size that are part of the criteria there?

So I have Dr. Gary Barnette, our Chief Scientific Officer. Gary?

Yes. No, there's no futility analysis or sample size re-estimation associated with this interim analysis.

And as you know, the primary endpoint is weight loss. And so the interim analysis is looking at lean mass and fat mass. And so the real purpose of it is to gain confirmation that we're heading in the right direction, meaning that you're seeing the lean mass preservation and the additional fat mass loss that would at 34-weeks, that should translate to 68 weeks a weight loss benefit.

And so from a statistical standpoint, by not looking at total weight loss, plus it's too early anyway, at 34-weeks, you're not taking a statistical penalty or an alpha hit at the interim, which will affect the amount of alpha spend you have at the end of the study.

Got it. And just one more for me. If you go down the route of assessing functional benefit in the case that maybe less than 5% weight loss is observed, is there any sense for what degree of weight loss needs to be seen? And is that counterbalanced by the magnitude of functional benefit?

Yes. So as I said in my public statements that, that question has come up before. So greater than 5% alone is weight loss -- incremental weight loss you're in. If it's less than 5%, and the weight loss could be similar to the GLP-1 receptor agonist alone, meaning that you didn't see an incremental weight loss difference at all. But you showed the physical function benefit, then that could be a basis for approval going forward.

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

Thank you. I appreciate everyone who joined us on today's call, and we look forward to updating you all on our progress in our next investor call. Thank you again.

A digital replay of the conference call will be available beginning approximately 12:00 p.m. Eastern Time today, February 11, by dialing 1 (855) 669-9658 in the US and 1 (412) 317-0088 internationally. You will be prompted to enter the replay access code, which will be 7414536. Please record your name and company when joining. The conference call has now concluded. Thank you for attending today's discussion.