As a biopharma company, Veru Inc. (NASDAQ: VERU) is mainly focused on clinically developing treatments for breast cancer and prostate cancer while exploring additional diseases to treat. In response to the positive results of its phase 3 clinical trials for its Covid-19 treatment, VERU stock surged and has renewed its run with approval from the FDA for its EUA application. Despite the company’s poor quarterly results, VERU stock surged 66% on the positive news.
Fundamental Analysis
Given VERU’s wide range of treatments targeting some of the most devastating and widespread cancers and diseases, investors are bullish on the company’s future – especially after the results of its impressive Covid-19 study. If the company receives FDA approval and moves to commercialize sabizabulin, the revenue influx could help pave the way for its research well into the future.
Covid-19 Treatment
Due to the growing demand for Covid-19 treatments, VERU has been developing its own treatment – sabizabulin – to capitalize on this need. In phase 3 of clinical trials, sabizabulin showed promising results compared to the placebo in 150 patients at high risk for Acute Respiratory Distress Syndrome or death. Sabizabulin effectively reduced deaths by 55% leading the Independent Data Safety Monitoring Committee to recommend that the study be halted early due to the drug’s high efficiency and lack of safety concerns.
With this in mind, VERU plans to submit an emergency use authorization application to the FDA. Given that the FDA granted the company a fast track designation previously, VERU is bullish the emergency use authorization application will be accepted. To facilitate this, VERU is improving its manufacturing process to produce the required supply of sabizabulin in anticipation of the potential FDA authorization.
Given that VERU expects this treatment to generate $1 billion in the US alone, the company is in talks with BARDA and other US government agencies to secure deals for the sale of the drug upon its release. Since sabizabulin is the first drug to show such efficiency in reducing Covid-19 deaths, VERU is well-positioned to emerge as a leader in Covid-19 treatments – likely leading to a huge boost in revenues.
Cancer Treatments
While the Covid-19 treatments market is lucrative, VERU’s main focus remains on developing treatments for breast and prostate cancers. Breast cancer is the most prevalent cancer among women in the US and this urgent need led VERU to develop Enobosarm after showing its potential to treat skeletal related cancers. Since then Enobosarm has showed its ability to build muscles and improve physical conditions in clinical studies involving breast cancer patients. Moreover, Enobosarm showed no signs of masculinization, liver toxicity, or changes in the proportion of red blood cells.
To accelerate the release of this treatment, VERU is conducting a phase 3 ARTEST clinical study to test the drug’s efficacy and safety. VERU is also developing a companion diagnostic test in collaboration with Roche/Ventana Diagnostics based on the FDA’s recommendation. Additionally, VERU is conducting a phase 3 ENABLAR-2 clinical study to test Enobosarm’s safety when combined with another treatment for breast cancer. Considering the huge market for safe and effective treatments of breast cancer, VERU stock could be positioned for a run as the company releases updates on these studies.
Meanwhile, 5% of men with prostate cancer in the US develop metastatic cancer and VERU is developing a treatment to ease the suffering of these patients. Currently enrolling patients for its phase 3 VERACITY study, VERU intends to treat 245 men suffering from metastatic castration resistant prostate cancer as well as tumor progression using sabizabulin.
Given sabizabulin’s potential to treat several types of cancer, VERU could soon be developing treatments for lung cancer, leukemia, and pancreatic cancer. If VERU’s treatments prove effective then VERU is in a great position to bring its treatments to market – potentially reporting record revenue increases when its treatments are released.
Yet, VERU is currently developing VERU-100 for treating prostate cancer and is researching the optimal dose for this treatment. With phase 2 results expected soon, VERU intends to begin registration for its phase 3 clinical trials in the first half of the year. VERU-100 could be the first of its kind if approved by the FDA since there are no GnRH antagonists approved beyond a one-month depot injection. This could give the treatment a competitive advantage if VERU-100 is approved.
Sexual Health Division
But in order to fund these trials, VERU continues to grow its sexual health division which manufactures and sells its best-selling product – FC2 Female Condom – which provides protection against STIs and unplanned pregnancy. Marketed as the only “woman controlled” device for preventing STIs and pregnancy, FC2 is catering to a huge market which will help offset the cost of its trials.
At the same time, VERU is developing a new drug – ENTADFI – to treat urinary tract symptoms caused by an enlarged prostate which could have negative sexual side effects. Considering that ENTADFI is only a single pill, VERU is bullish that the new drug will increase compliance since poor compliance could potentially lead to death. Exploring new marketing methods, VERU intends to market and distribute ENTADFI through telemedicine and telepharmacy channels in the US in addition to potential partnerships for marketing the drug globally.
FDA Approval of Emergency Use Authorization
VERU has seen a surge in recent days following a stream of bullish news. The trigger for the stock’s recent uptick was FDA approval for its COVID-19 treatment – sabizabulin – to be submitted for a request for Emergency Use Authorization.
This decision was based on the Phase 3 trial of the treatment which is specifically designed for hospitalized COVID-19 patients at high risk for acute respiratory disease syndrome. This is a significant step forward for the company which now expects to submit its request for an EUA application in Q2. It appears that VERU’s chances for approval are high since sabizabulin demonstrated a clear mortality benefit in hospitalized moderate to severe COVID-19 patients.
Seizing the opportunity, Veru shared that the efficacy data from the trial is enough to support not only the EUA request but for its NDA submission as well. Its additional safety data will be collected while sabizabulin is used under the EUA. If the data collected is enough to support its NDA submission, then VERU will not require additional safety clinical studies.
With this in mind, VERU has begun discussions with various government agencies for government purchases of sabizabulin in the U.S. and other countries. In anticipation of its increased demand, VERU has scaled up its manufacturing processes and will be able to produce commercial drug supply following its authorization.
Based on this, Jefferies raised its price target for the stock after adjusting the peak COVID revenues to nearly $1 billion. The analyst – Chris Howerton – raised its price target from $33 to $55. However, it appears that most analysts give VERU stock a price target near $33.
VERU Financials
Interestingly, this bullish news for the company came before its Q2 report missed expectations. Its expected EPS was -$.14, however the company reported an EPS of -$.18 when a year ago it had achieved a loss of only $0.04 per share. However, it beat revenue expectations reporting $13 million rather than than the expected $12.2 million.
Meanwhile, its gross profit increased 2% compared to the same year ago period – reaching $11.2 million for the quarter. At the same time, its operating loss increased substantially from $1.5 million in Q2 2021 to $11.8 million this quarter. This contributed to the company’s total net loss of $14.2 million. The company reported cash and cash equivalents totaling $112 million whereas its total current liabilities amount to $21.1 million. Its assets also total $172.8 million.
Technical Analysis
Currently trading at $12.82, VERU gapped up on the news and shows a resistance at 13.45 and a strong one at 15.10. Its support lies at 9.40. Accumulation spiked up on the news, the MACD is bullish, and the RSI is overbought at 75.
Given these indicators and VERU stock’s test against the resistance, now is not a good entry point for investors. As the RSI regulates for a second attempt, investors may find a better entry point as the stock looks to retest its resistance near 13.34.
VERU Forecast
After its recent run, VERU stock will likely remain on investors’ watchlists as they wait for the advancement of VERU’s Covid-19 treatments. Approval of its EUA application, its possible IND, and eventual commercialization will be major catalysts for the stock. However its important to remember the company’s deep pipeline of cancer treatments which could also be advancing this year. Although its explosive runup on news has contributed to its elevated PPS, VERU could continue its run this week after forcing shorts to cover.
Fundamental Analysis
Given VERU’s wide range of treatments targeting some of the most devastating and widespread cancers and diseases, investors are bullish on the company’s future – especially after the results of its impressive Covid-19 study. If the company receives FDA approval and moves to commercialize sabizabulin, the revenue influx could help pave the way for its research well into the future.
Covid-19 Treatment
Due to the growing demand for Covid-19 treatments, VERU has been developing its own treatment – sabizabulin – to capitalize on this need. In phase 3 of clinical trials, sabizabulin showed promising results compared to the placebo in 150 patients at high risk for Acute Respiratory Distress Syndrome or death. Sabizabulin effectively reduced deaths by 55% leading the Independent Data Safety Monitoring Committee to recommend that the study be halted early due to the drug’s high efficiency and lack of safety concerns.
With this in mind, VERU plans to submit an emergency use authorization application to the FDA. Given that the FDA granted the company a fast track designation previously, VERU is bullish the emergency use authorization application will be accepted. To facilitate this, VERU is improving its manufacturing process to produce the required supply of sabizabulin in anticipation of the potential FDA authorization.
Given that VERU expects this treatment to generate $1 billion in the US alone, the company is in talks with BARDA and other US government agencies to secure deals for the sale of the drug upon its release. Since sabizabulin is the first drug to show such efficiency in reducing Covid-19 deaths, VERU is well-positioned to emerge as a leader in Covid-19 treatments – likely leading to a huge boost in revenues.
Cancer Treatments
While the Covid-19 treatments market is lucrative, VERU’s main focus remains on developing treatments for breast and prostate cancers. Breast cancer is the most prevalent cancer among women in the US and this urgent need led VERU to develop Enobosarm after showing its potential to treat skeletal related cancers. Since then Enobosarm has showed its ability to build muscles and improve physical conditions in clinical studies involving breast cancer patients. Moreover, Enobosarm showed no signs of masculinization, liver toxicity, or changes in the proportion of red blood cells.
To accelerate the release of this treatment, VERU is conducting a phase 3 ARTEST clinical study to test the drug’s efficacy and safety. VERU is also developing a companion diagnostic test in collaboration with Roche/Ventana Diagnostics based on the FDA’s recommendation. Additionally, VERU is conducting a phase 3 ENABLAR-2 clinical study to test Enobosarm’s safety when combined with another treatment for breast cancer. Considering the huge market for safe and effective treatments of breast cancer, VERU stock could be positioned for a run as the company releases updates on these studies.
Meanwhile, 5% of men with prostate cancer in the US develop metastatic cancer and VERU is developing a treatment to ease the suffering of these patients. Currently enrolling patients for its phase 3 VERACITY study, VERU intends to treat 245 men suffering from metastatic castration resistant prostate cancer as well as tumor progression using sabizabulin.
Given sabizabulin’s potential to treat several types of cancer, VERU could soon be developing treatments for lung cancer, leukemia, and pancreatic cancer. If VERU’s treatments prove effective then VERU is in a great position to bring its treatments to market – potentially reporting record revenue increases when its treatments are released.
Yet, VERU is currently developing VERU-100 for treating prostate cancer and is researching the optimal dose for this treatment. With phase 2 results expected soon, VERU intends to begin registration for its phase 3 clinical trials in the first half of the year. VERU-100 could be the first of its kind if approved by the FDA since there are no GnRH antagonists approved beyond a one-month depot injection. This could give the treatment a competitive advantage if VERU-100 is approved.
Sexual Health Division
But in order to fund these trials, VERU continues to grow its sexual health division which manufactures and sells its best-selling product – FC2 Female Condom – which provides protection against STIs and unplanned pregnancy. Marketed as the only “woman controlled” device for preventing STIs and pregnancy, FC2 is catering to a huge market which will help offset the cost of its trials.
At the same time, VERU is developing a new drug – ENTADFI – to treat urinary tract symptoms caused by an enlarged prostate which could have negative sexual side effects. Considering that ENTADFI is only a single pill, VERU is bullish that the new drug will increase compliance since poor compliance could potentially lead to death. Exploring new marketing methods, VERU intends to market and distribute ENTADFI through telemedicine and telepharmacy channels in the US in addition to potential partnerships for marketing the drug globally.
FDA Approval of Emergency Use Authorization
VERU has seen a surge in recent days following a stream of bullish news. The trigger for the stock’s recent uptick was FDA approval for its COVID-19 treatment – sabizabulin – to be submitted for a request for Emergency Use Authorization.
This decision was based on the Phase 3 trial of the treatment which is specifically designed for hospitalized COVID-19 patients at high risk for acute respiratory disease syndrome. This is a significant step forward for the company which now expects to submit its request for an EUA application in Q2. It appears that VERU’s chances for approval are high since sabizabulin demonstrated a clear mortality benefit in hospitalized moderate to severe COVID-19 patients.
Seizing the opportunity, Veru shared that the efficacy data from the trial is enough to support not only the EUA request but for its NDA submission as well. Its additional safety data will be collected while sabizabulin is used under the EUA. If the data collected is enough to support its NDA submission, then VERU will not require additional safety clinical studies.
With this in mind, VERU has begun discussions with various government agencies for government purchases of sabizabulin in the U.S. and other countries. In anticipation of its increased demand, VERU has scaled up its manufacturing processes and will be able to produce commercial drug supply following its authorization.
Based on this, Jefferies raised its price target for the stock after adjusting the peak COVID revenues to nearly $1 billion. The analyst – Chris Howerton – raised its price target from $33 to $55. However, it appears that most analysts give VERU stock a price target near $33.
VERU Financials
Interestingly, this bullish news for the company came before its Q2 report missed expectations. Its expected EPS was -$.14, however the company reported an EPS of -$.18 when a year ago it had achieved a loss of only $0.04 per share. However, it beat revenue expectations reporting $13 million rather than than the expected $12.2 million.
Meanwhile, its gross profit increased 2% compared to the same year ago period – reaching $11.2 million for the quarter. At the same time, its operating loss increased substantially from $1.5 million in Q2 2021 to $11.8 million this quarter. This contributed to the company’s total net loss of $14.2 million. The company reported cash and cash equivalents totaling $112 million whereas its total current liabilities amount to $21.1 million. Its assets also total $172.8 million.
Technical Analysis
Currently trading at $12.82, VERU gapped up on the news and shows a resistance at 13.45 and a strong one at 15.10. Its support lies at 9.40. Accumulation spiked up on the news, the MACD is bullish, and the RSI is overbought at 75.
Given these indicators and VERU stock’s test against the resistance, now is not a good entry point for investors. As the RSI regulates for a second attempt, investors may find a better entry point as the stock looks to retest its resistance near 13.34.
VERU Forecast
After its recent run, VERU stock will likely remain on investors’ watchlists as they wait for the advancement of VERU’s Covid-19 treatments. Approval of its EUA application, its possible IND, and eventual commercialization will be major catalysts for the stock. However its important to remember the company’s deep pipeline of cancer treatments which could also be advancing this year. Although its explosive runup on news has contributed to its elevated PPS, VERU could continue its run this week after forcing shorts to cover.