Company Overview - Veru Inc. is a late clinical stage biopharmaceutical company focused on developing innovative medicines for cardiometabolic and inflammatory diseases [2] - The company's drug development program includes two late-stage novel small molecules: enobosarm and sabizabulin [2] Enobosarm Obesity Program - Enobosarm is being developed as a next-generation drug to enhance fat loss while preserving lean mass, particularly in older patients receiving semaglutide for chronic weight management [3][4] - The Phase 2b QUALITY clinical study showed positive topline and safety results, with participants losing an average of 11.88 lbs during the active weight loss period [4] - After discontinuation of semaglutide, the placebo group regained 43% of lost body weight, while the enobosarm 3mg and 6mg groups regained only 1.41% (2.73 lbs) and 2.87% (5.29 lbs) respectively, demonstrating a significant reduction in weight regain [4][5] - Enobosarm monotherapy preserved more than 100% of lean mass compared to the placebo group, which experienced a loss of lean mass [5][6] Sabizabulin Atherosclerosis Inflammation Program - Sabizabulin is being explored for the treatment of inflammation in atherosclerotic cardiovascular disease, addressing a significant unmet medical need [8][9] - The drug has shown broad anti-inflammatory activity in previous clinical studies, with a safety database consisting of 266 dosed patients [8][9] - The company believes that combining sabizabulin with statin therapy could effectively reduce inflammation and slow the progression of atherosclerotic cardiovascular disease [8][9] Upcoming Events - Veru Inc. will participate in one-on-one meetings and a fireside chat presentation with investors at the 2025 BTIG Virtual Biotech Conference on July 29-30, 2025 [1]

Core Insights - Veru Inc. announced positive topline efficacy and safety results from the Phase 2b QUALITY clinical study, particularly highlighting the effectiveness of enobosarm in weight management after discontinuing semaglutide treatment [1][15] - Enobosarm 3mg significantly reduced body weight regain by 46% and completely prevented fat regain compared to placebo, while preserving lean mass [1][4] - The company has been granted a meeting with the FDA to discuss advancing enobosarm into Phase 3 clinical trials [1][15] Efficacy Results - In the placebo group, participants regained 43% of the body weight lost during the initial study phase after stopping semaglutide, while the enobosarm 3mg group regained only 1.41% (2.73 lbs) [1][4] - Enobosarm treatment resulted in up to 93% greater fat loss and 100% preservation of lean mass compared to the placebo group at the end of the study [1][4][6] - The enobosarm plus semaglutide regimen preserved 100% of lean mass, with 99% of body weight loss attributed to fat [2][5] Safety Profile - Enobosarm monotherapy maintained a positive safety profile with essentially no gastrointestinal side effects observed during the maintenance period [1][10] - There were no significant adverse events related to liver injury or increases in prostate-specific antigen levels, and no reports of suicidal ideation were noted [11][12] Study Design - The Phase 2b Maintenance Extension study involved 148 participants who discontinued semaglutide and received either placebo, enobosarm 3mg, or enobosarm 6mg for 12 weeks [3][15] - The study aimed to assess the role of enobosarm in preserving lean mass and preventing weight regain after stopping semaglutide [3][8] Future Outlook - The company anticipates reporting full Phase 2b QUALITY and Maintenance Extension clinical trial data at leading scientific conferences and in publications [2][15] - Enobosarm is positioned as a next-generation drug that enhances weight reduction by GLP-1 RA drugs, focusing on fat loss while preserving lean mass [14][15]

Company Overview - Veru Inc. is a late clinical stage biopharmaceutical company focused on developing innovative medicines for cardiometabolic and inflammatory diseases [2] - The company's drug development program includes two late-stage novel small molecules: enobosarm and sabizabulin [2] Enobosarm Development - Enobosarm is a selective androgen receptor modulator (SARM) aimed at enhancing weight reduction by making GLP-1 RA drugs more tissue selective for fat loss while preserving lean mass [2] - Positive topline and safety results were announced from the Phase 2b QUALITY clinical study, which involved 168 older patients (≥60 years) receiving semaglutide for chronic weight management [3] - The Phase 2b extension study will evaluate whether enobosarm can prevent fat regain after stopping GLP-1 RA treatment, with topline results expected in Q2 2025 [3] Sabizabulin Development - Sabizabulin is being explored as a treatment for inflammation in atherosclerotic cardiovascular disease, addressing a significant unmet medical need [4][5] - The drug has shown broad anti-inflammatory activity in previous clinical studies, with a safety database consisting of 266 dosed patients [4][5] - The company plans to submit a new IND for sabizabulin's proposed indication by the first half of 2026 [6] Market Opportunity - The decision to explore sabizabulin for atherosclerotic cardiovascular disease is based on the large global market opportunity and the high probability of success due to its mechanism of action being similar to colchicine [5] - The company aims to assess the progression of coronary atherosclerosis using coronary CT angiography imaging as a primary endpoint in a small Phase 2 proof of concept study [5]

Core Viewpoint - Veru Inc. is advancing its late-stage clinical development of enobosarm, showing promising safety and efficacy data in combination with semaglutide for weight management in elderly patients [1][2][8]. Group 1: Safety and Efficacy of Enobosarm - The combination of enobosarm with semaglutide demonstrated good safety, with no increase in gastrointestinal adverse events or signs of drug-induced liver injury [2][3]. - No serious adverse events related to treatment were reported, with only four non-treatment-related serious adverse events observed [2][3]. - Enobosarm 3mg combined with semaglutide resulted in fewer gastrointestinal discomfort reports compared to the placebo plus semaglutide group [2][3]. Group 2: Primary and Secondary Endpoints - The study achieved its primary endpoint, showing that enobosarm combined with semaglutide significantly reduced lean body mass loss, with the 3mg group showing a 99.1% relative reduction in lean mass loss compared to placebo (p<0.001) [4][6]. - Enobosarm promoted fat loss in a dose-dependent manner, with the 6mg group showing a 46% reduction in fat compared to placebo at 16 weeks (p=0.014) [5][6]. Group 3: Functional Improvement - The stair climbing test indicated that only 16% of participants in the enobosarm 3mg group experienced a decline of 10% or more, representing a 62.4% reduction in decline risk compared to the placebo group (p=0.0066) [7]. - In contrast, 42.6% of the placebo plus semaglutide group showed a decline of 10% or more in the stair climbing test [7]. Group 4: Future Outlook - The QUALITY study is the first to validate the risk of accelerated lean mass loss and functional decline in elderly patients using GLP-1 receptor agonists for weight management [8]. - Veru plans to further develop enobosarm as a combination treatment with GLP-1 agonists to protect muscle mass and prevent functional decline during weight loss [8].

Core Insights - The Phase 2b QUALITY clinical study demonstrated that the combination of enobosarm and semaglutide has a positive safety profile, with fewer gastrointestinal side effects compared to semaglutide alone [1][3][4] - Enobosarm 3mg has been selected as the proposed oral dose for the upcoming Phase 3 clinical program based on the efficacy and safety data from the Phase 2b trial [1][8] - The combination treatment resulted in a highly selective loss of fat mass, with 99% of total weight lost attributed to fat, while preserving lean mass [1][14] Safety Profile - The Phase 2b QUALITY clinical trial showed no increases in gastrointestinal side effects or drug-induced liver injury compared to placebo [3][4] - Adverse events related to gastrointestinal issues were lower in the enobosarm + semaglutide group compared to the placebo + semaglutide group [4][6] - No serious adverse events related to treatment were observed, and all reported adverse events were mild and returned to baseline levels [3][4][6] Efficacy Results - The trial met its primary endpoint with a statistically significant reduction in lean mass loss, showing a 71% relative reduction in lean mass loss for enobosarm + semaglutide compared to placebo + semaglutide [9][14] - Enobosarm 3mg + semaglutide showed a 99.1% mean relative reduction in lean mass loss, while the 6mg dose did not provide additional benefits [9][11] - The treatment also demonstrated a significant reduction in the percentage of patients experiencing a decline in stair climb power, indicating improved physical function [17] Regulatory Steps - Following the positive results from the Phase 2b study, the company has requested an End of Phase 2 meeting with the FDA to discuss the Phase 3 clinical program [1][16] - The proposed Phase 3 study will be a double-blind, placebo-controlled trial focusing on older patients with obesity or overweight, assessing the effects of enobosarm on physical function and body composition [19][20] Future Developments - The company is developing a novel modified release oral formulation of enobosarm, expected to enter Phase 1 bioavailability clinical trials in early 2025 [21] - The new formulation aims to be available for Phase 3 clinical studies and commercialization, with patent protection anticipated until 2045 [21]

Company Overview - Veru is a late-clinical-stage biopharma company that has undergone a comprehensive restructuring effort in 2024 [1] - The company divested its commercial sexual health business for $18 million in 2024, marking a significant pivot in its business strategy [1] Leadership and Experience - Richard Prati, associated with Veru, has nearly 40 years of equity analysis and investment experience, including nearly 20 years on Wall Street [1] - He co-founded American Technology Research and sold the company in 2008, showcasing a strong background in public and private global equity analysis and investing [1]

[Forward Looking Statements](index=4&type=section&id=Forward%20Looking%20Statements) This section outlines potential risks and uncertainties that could cause actual results to differ from forward-looking statements, including those related to product development, financial performance, and the company's ability to continue as a going concern - The company identifies its development and commercialization plans for enobosarm and sabizabulin as key areas subject to forward-looking risks[10](index=10&type=chunk) - Key risk factors that could cause actual results to differ from expectations include potential delays in clinical trials, failure to obtain FDA approval, and the ability to secure sufficient financing to continue as a going concern[11](index=11&type=chunk) - The company also highlights risks related to its history of losses, the fact it currently has no commercial revenue, and the potential for future material weaknesses in internal controls[14](index=14&type=chunk) PART I. FINANCIAL INFORMATION [Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for the quarterly period ended March 31, 2025, including balance sheets, statements of operations, statements of stockholders' equity, and statements of cash flows, along with detailed notes explaining accounting policies and significant events [Unaudited Condensed Consolidated Balance Sheets](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) The balance sheet as of March 31, 2025, shows a significant decrease in total assets to $32.7 million from $60.4 million at September 30, 2024, primarily due to the sale of the FC2 business, which also reduced liabilities Condensed Consolidated Balance Sheet Data | Metric | March 31, 2025 | September 30, 2024 | | :--- | :--- | :--- | | Cash, cash equivalents, and restricted cash | $20,018,392 | $24,916,285 | | Total Assets | $32,671,943 | $60,418,772 | | Total Liabilities | $11,624,710 | $28,102,060 | | Total Stockholders' Equity | $21,047,233 | $32,316,712 | [Unaudited Condensed Consolidated Statements of Operations](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) For the three months ended March 31, 2025, the company reported a net loss of $7.9 million, an improvement from $10.0 million in the prior-year period, with the six-month period showing a net loss of $16.8 million, improved by an $8.6 million gain on debt extinguishment Operating Results (Three Months Ended March 31) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Research and development | $3,932,102 | $2,985,118 | | Operating loss from continuing operations | $(8,122,232) | $(8,888,791) | | Net loss | $(7,901,619) | $(10,025,948) | | Net loss per share | $(0.05) | $(0.07) | Operating Results (Six Months Ended March 31) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Research and development | $9,648,932 | $4,643,693 | | Gain on extinguishment of debt | $8,624,778 | $0 | | Net loss from discontinued operations | $(7,184,670) | $(1,931,448) | | Net loss | $(16,846,966) | $(18,301,929) | [Unaudited Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended March 31, 2025, net cash used in operating activities was $19.1 million, offset by $18.4 million provided by investing activities, resulting in a net decrease in cash of $4.9 million Cash Flow Summary (Six Months Ended March 31, 2025) | Activity | Amount | | :--- | :--- | | Net cash used in operating activities | $(19,069,450) | | Net cash provided by investing activities | $18,393,168 | | Net cash used in financing activities | $(4,221,611) | | Net decrease in cash | $(4,897,893) | - The primary source of cash was **$16.3 million** from the sale of the FC2 business, while the main financing use was a **$4.2 million** payment to extinguish a residual royalty agreement[21](index=21&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) The notes detail accounting policies and significant events, including substantial doubt about going concern, the sale of the FC2 business, debt extinguishment, ongoing legal proceedings, and collection uncertainty from the ENTADFI asset sale - **Going Concern:** Management concluded there is substantial doubt about the company's ability to continue as a going concern for the next twelve months due to insufficient cash to fund operations (Note 2)[32](index=32&type=chunk)[33](index=33&type=chunk) - **Discontinued Operations:** The company sold its FC2 business on December 30, 2024, for **$18.0 million**, resulting in a loss on sale of **$4.2 million** (Note 3)[34](index=34&type=chunk)[35](index=35&type=chunk) - **Debt Extinguishment:** A **$4.2 million** payment was made to terminate the Residual Royalty Agreement, resulting in an **$8.6 million** gain on extinguishment of debt (Note 8)[57](index=57&type=chunk) - **Legal Proceedings:** The company faces several shareholder lawsuits related to statements about sabizabulin for COVID-19 and has resolved a commercial dispute with a supplier for **$8.3 million** (Note 12)[87](index=87&type=chunk)[94](index=94&type=chunk) - **ENTADFI Sale:** The company continues to face collection uncertainty from the sale of ENTADFI assets to ONCO, which has defaulted on payments and is operating under a forbearance agreement (Note 15)[100](index=100&type=chunk)[107](index=107&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's strategic shift to focus on developing enobosarm for obesity and sabizabulin for atherosclerosis following asset divestitures, reviewing operating results, liquidity, and capital resources, and disclosing substantial doubt about its going concern ability [Overview and Drug Development Programs](index=28&type=section&id=Overview%20and%20Drug%20Development%20Programs) Veru has transitioned into a late-stage biopharmaceutical company focused on enobosarm for muscle loss in obesity and sabizabulin for atherosclerosis, reporting positive Phase 2b QUALITY study results for enobosarm and divesting commercial assets - The company's primary focus is now on two clinical-stage assets: enobosarm for preventing muscle loss in obese patients on GLP-1 RAs, and sabizabulin for treating inflammation in atherosclerotic cardiovascular disease[109](index=109&type=chunk)[133](index=133&type=chunk) - The Phase 2b QUALITY trial for enobosarm met its primary endpoint, demonstrating a statistically significant preservation of lean body mass (**71% relative reduction in lean mass loss**), and the company plans to request an End of Phase 2 meeting with the FDA[116](index=116&type=chunk)[123](index=123&type=chunk) - The FC2 business was sold on December 30, 2024, for **$18.0 million** in cash, resulting in a **$4.2 million** loss and the extinguishment of associated debt[139](index=139&type=chunk)[140](index=140&type=chunk) [Results of Operations](index=34&type=section&id=Results%20of%20Operations) For the three months ended March 31, 2025, R&D expenses increased by $0.9 million, while SG&A decreased by $0.7 million, with the six-month period significantly impacted by an $8.6 million gain on debt extinguishment and a $7.2 million net loss from discontinued operations Change in Operating Expenses (Six Months Ended March 31) | Expense | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Research and development | $9.6M | $4.6M | +$5.0M | | Selling, general and administrative | $10.4M | $12.6M | -$2.2M | - The increase in R&D expenses is primarily attributed to costs associated with the ongoing Phase 2b QUALITY clinical study for enobosarm[147](index=147&type=chunk)[152](index=152&type=chunk) - The six-month period includes a significant one-time gain of **$8.6 million** from the extinguishment of the Residual Royalty Agreement debt, related to the FC2 business sale[155](index=155&type=chunk) [Liquidity and Sources of Capital](index=35&type=section&id=Liquidity%20and%20Sources%20of%20Capital) As of March 31, 2025, the company held $20.0 million in cash, which management deems insufficient for the next 12 months, leading to substantial doubt about its going concern ability and a need for additional capital - The company had **$20.0 million** in cash, cash equivalents, and restricted cash at March 31, 2025[158](index=158&type=chunk) - Management has concluded there is substantial doubt about the company's ability to continue as a going concern, as current cash is insufficient to fund operations for the next twelve months[159](index=159&type=chunk)[160](index=160&type=chunk) - During the six months ended March 31, 2025, investing activities provided **$18.4 million** (primarily from the FC2 sale), while operating activities used **$19.1 million** and financing activities used **$4.2 million**[161](index=161&type=chunk)[164](index=164&type=chunk)[166](index=166&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=38&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Following the sale of its FC2 business, the company is no longer subject to significant market risks related to raw material commodity prices or foreign currency exchange rates - After the FC2 Business Sale, the company is no longer exposed to significant market risk from raw material commodity prices or foreign currency exchange rate fluctuations[178](index=178&type=chunk) [Controls and Procedures](index=39&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, deemed the company's disclosure controls and procedures effective as of March 31, 2025, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the reporting period[179](index=179&type=chunk) - No material changes were made to the company's internal control over financial reporting during the most recently completed fiscal quarter[180](index=180&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=39&type=section&id=Item%201.%20Legal%20Proceedings) This section directs readers to Note 12 of the unaudited condensed consolidated financial statements for a detailed description of the company's material pending legal proceedings - For a description of material pending legal proceedings, the report refers to Note 12, Contingent Liabilities, in the financial statements[181](index=181&type=chunk) [Risk Factors](index=40&type=page&id=Item%201A.%20Risk%20Factors) This section provides a comprehensive overview of significant risks facing the company, including those related to regulation, commercialization, financial position, business operations, intellectual property, and common stock ownership [Risks Related to Regulation and Commercialization](index=42&type=section&id=Risks%20Related%20to%20the%20Regulation%20and%20Commercialization%20of%20Our%20Products%20and%20Drug%20Candidates) The company faces substantial risks in regulation and commercialization, with no current commercial revenue and profitability dependent on obtaining regulatory approval for its drug candidates, alongside reliance on third-party CROs and manufacturers - The company currently has no commercial revenue and may never become profitable, as its future depends on the successful development and commercialization of its drug candidates[192](index=192&type=chunk) - The clinical development programs for enobosarm and sabizabulin are subject to significant risks, including trial delays, unfavorable results, and potential FDA disagreement with trial designs[205](index=205&type=chunk)[206](index=206&type=chunk) - Reliance on third-party CROs and manufacturers creates risks related to performance, quality control, and compliance with cGCP and cGMP standards[210](index=210&type=chunk)[213](index=213&type=chunk) [Risks Related to Financial Position and Need for Capital](index=50&type=section&id=Risks%20Related%20to%20Our%20Financial%20Position%20and%20Need%20for%20Capital) The company's financial position is precarious, marked by a history of net losses and a 'going concern' warning, requiring significant additional capital for operations and clinical trials, with uncertainty regarding future payments from the ENTADFI asset sale - The company's independent registered public accounting firm has issued a 'going concern' opinion, highlighting substantial doubt about its ability to continue operations due to losses and the need for additional funding[234](index=234&type=chunk) - Veru needs to raise substantial additional capital to fund its operations, particularly for pivotal Phase 3 trials, and failure to do so could force the company to curtail programs or cease operations[235](index=235&type=chunk) - There is significant uncertainty regarding the collection of remaining payments from ONCO for the ENTADFI sale, as ONCO has previously defaulted and is operating under a forbearance agreement[242](index=242&type=chunk)[243](index=243&type=chunk) [Risks Related to Business and Operations](index=53&type=section&id=Risks%20Related%20to%20Our%20Business) The company faces significant business and operational risks, including intense competition in the obesity treatment market, ongoing shareholder lawsuits, and potential disputes arising from the recent sale of the FC2 business - The company faces intense competition for its lead candidate, enobosarm, from major pharmaceutical companies with substantially greater resources[245](index=245&type=chunk)[246](index=246&type=chunk) - Veru is a defendant in several shareholder class action and derivative lawsuits, which could result in substantial legal fees and potential damages[257](index=257&type=chunk) - The sale of the FC2 business carries risks, including potential disputes over working capital adjustments and indemnification claims, with the purchaser already submitting an insurance claim alleging breaches of representations by Veru[270](index=270&type=chunk)[272](index=272&type=chunk) [Risks Relating to Intellectual Property](index=58&type=section&id=Risks%20Relating%20to%20Our%20Intellectual%20Property) The company's success depends on protecting its intellectual property, facing risks that patents may expire, be invalidated, or not be granted, particularly for enobosarm, and is reliant on third-party licenses which could be terminated - The company's commercial success depends on its ability to obtain, maintain, and defend intellectual property rights, which is an uncertain process[274](index=274&type=chunk) - Intellectual property protection for enobosarm in the obesity market is not secure, as it relies on a pending method of use patent application that may not be granted or may be too narrow[285](index=285&type=chunk) - The company is dependent on license relationships for its key drug candidates, sabizabulin and enobosarm, and could lose the rights to these assets if it fails to comply with license obligations[286](index=286&type=chunk) [Risks Related to Ownership of Our Common Stock](index=62&type=section&id=Risks%20Related%20to%20Ownership%20of%20Our%20Common%20Stock) Stockholders face risks including high ownership concentration, a Nasdaq delisting notice for failing to maintain a minimum $1.00 bid price, and potential harm to investor confidence from past financial restatements and internal control weaknesses - As of May 5, 2025, executive officers and directors beneficially owned approximately **15.2%** of the company's common stock, giving them significant influence over corporate matters[296](index=296&type=chunk) - The company received a delisting notice from Nasdaq due to its stock price falling below **$1.00**, and has until August 25, 2025, to regain compliance, which may necessitate a reverse stock split[297](index=297&type=chunk)[298](index=298&type=chunk) - Previous financial restatements and identified material weaknesses in internal controls (though now remediated) pose risks to investor confidence and could lead to further legal or regulatory scrutiny[301](index=301&type=chunk)[302](index=302&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=66&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) In March 2025, the company issued 200,000 shares of common stock to a third-party consultant, claiming exemption from registration under Section 4(a)(2) of the Securities Act of 1933 and/or Regulation D - The company issued **200,000 shares** of common stock to a third-party consultant in March 2025, claiming the transaction was exempt from registration[316](index=316&type=chunk) [Exhibits](index=66&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Quarterly Report on Form 10-Q, including the FC2 business sale agreement, ENTADFI asset purchase agreement amendments, corporate governance documents, and required certifications - Key filed exhibits include the purchase agreement for the FC2 Business Sale and limited waivers related to the Onconetix promissory notes[317](index=317&type=chunk)[320](index=320&type=chunk)

Core Insights - Veru Inc. is a late clinical stage biopharmaceutical company focused on developing innovative medicines for cardiometabolic and inflammatory diseases [3] - The company is advancing its lead program, Enobosarm, which is in the Phase 2b QUALITY study, aimed at improving body composition and physical function in obesity treatment [2][3] - The Virtual Investor KOL segment features discussions on obesity treatment, GLP-1s, and the unmet needs in the current treatment landscape [2] Company Overview - Veru's drug development program includes two late-stage novel small molecules: Enobosarm and Sabizabulin [3] - Enobosarm is a selective androgen receptor modulator (SARM) designed to enhance weight reduction by making GLP-1 RA drugs more tissue-selective for fat loss while preserving lean mass [3] - Sabizabulin is being developed as a microtubule disruptor for treating inflammation in atherosclerotic cardiovascular disease [3] Clinical Development - The Phase 2b QUALITY study of Enobosarm aims to provide topline clinical data that could inform future Phase 3 studies [2][4] - Discussions in the Virtual Investor segment highlight the potential of Enobosarm to help prevent fat regain and improve outcomes for obesity patients [2][4] - The company is also exploring the development of a modified-release formulation of Enobosarm, with plans for a Phase 1 study [4][5]

Financial Data and Key Metrics Changes - Research and development costs increased to $3.9 million from $3.0 million in the prior quarter, attributed to expenses related to the Innovus Arm Phase 2b quality clinical study [23] - Selling, general and administrative expenses decreased to $5.2 million from $5.9 million in the prior quarter, primarily due to a decrease in share-based compensation [24] - The net loss for continuing operations was $7.9 million or $0.05 per diluted common share, compared to a net loss of $8.7 million or $0.06 per diluted common share in the prior year's quarter [24] - Cash, cash equivalents, and restricted cash balance was $20 million as of March 31, 2025, down from $24.9 million as of September 30, 2024 [29] - The company reported a net loss from discontinued operations of $49,000 or $0.00 per diluted common share, compared to a net loss of $1.3 million or $0.01 per diluted common share in the prior quarter [25] Business Line Data and Key Metrics Changes - The company is focused on two clinical stage drug candidates: enobosarb and sebisibulin, with a particular emphasis on the obesity program [5][6] - The Phase 2b quality clinical study demonstrated a 71% preservation of total lean body mass in patients receiving enovasarm plus semaglutide versus placebo plus semaglutide [11] - Enovasarm treatment resulted in a dose-dependent greater loss of fat mass compared to placebo, with the six-milligram dose showing a 46% greater relative loss of fat mass [12] Market Data and Key Metrics Changes - Obesity prevalence is reported at 41.5% among 47.4 million patients enrolled in Medicare Part D plans, with 34.4% of patients over the age of 60 having obesity [22] - The company aims to target older patients who are at higher risk for muscle weakness and falls due to age-related loss of muscle [21] Company Strategy and Development Direction - The company plans to focus exclusively on drug development following the sale of the FC2 female condom business, allowing for a more concentrated effort on its clinical programs [28] - Upcoming catalysts include the unblinded safety data for the Phase 2b quality study and regulatory clarity from the FDA regarding the Phase 3 program [30][18] - The company is exploring non-dilutive funding options, including partnerships with larger pharmaceutical companies [37] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in having sufficient cash to last into the fourth quarter of 2025, allowing time to navigate upcoming clinical data releases [35] - The management highlighted the importance of demonstrating the ability of enovasarm to preserve lean mass while promoting fat loss, which is seen as a potential game changer in the obesity treatment landscape [38] - The company is actively discussing partnerships with large pharmaceutical companies to secure funding for the Phase 3 program [37] Other Important Information - The company recognized a gain on the sale of NTAPI assets of $974,000, which was not present in the prior quarter [24] - The company is developing a novel modified release oral formulation of enovasarm, expected to enter Phase 1 bioavailability clinical trials in the first half of 2025 [21] Q&A Session Summary Question: Could you talk about your cash balance and runway options for funding the Phase 3? - Management confirmed that there is enough cash to last into the fourth quarter and is exploring non-dilutive funding options, including partnerships with large pharmaceutical companies [35][37] Question: What outcomes would be considered a success for the Phase 2b extension maintenance study? - Success would be defined by the ability to blunt fat regain and potentially cause additional fat loss while maintaining muscle mass [51] Question: What is the expected size of the Phase 3 study and concerns regarding tariffs? - The expectation is to have approximately 400 patients randomized for the Phase 3 study, with one dose being selected for the trial [60] - Concerns regarding tariffs are minimal as the cost of goods for enovasarm is relatively low [61]

Financial Data and Key Metrics Changes - Research and development costs increased to $3.9 million from $3.0 million in the prior quarter, attributed to expenses related to the Innovus Arm Phase 2b quality clinical study [23] - Selling, general and administrative expenses decreased to $5.2 million from $5.9 million in the prior quarter, primarily due to a decrease in share-based compensation [24] - The net loss for continuing operations was $7.9 million or $0.05 per diluted common share, compared to a net loss of $8.7 million or $0.06 per diluted common share in the prior year's quarter [24] - Cash, cash equivalents, and restricted cash balance was $20 million as of March 31, 2025, down from $24.9 million as of September 30, 2024 [29] - The company reported a net loss from discontinued operations of $49,000 or $0.00 per diluted common share, compared to a net loss of $1.3 million or $0.01 per diluted common share in the prior quarter [25] Business Line Data and Key Metrics Changes - The company is focusing on its obesity program, specifically the drug candidates enobosarb and sebisibulin, with a significant emphasis on the Phase 2b quality clinical study for enobosarb [5][16] - The Phase 2b clinical trial demonstrated a 71% preservation of total lean body mass in patients receiving enobosarb plus semaglutide versus placebo plus semaglutide [10] - Enobosarb treatment resulted in a 46% greater relative loss of fat mass compared to placebo plus semaglutide, indicating a shift towards more selective fat loss [11] Market Data and Key Metrics Changes - The prevalence of obesity is reported at 41.5% among 47.4 million patients enrolled in Medicare Part D plans, with 34.4% of patients over the age of 60 having obesity in the United States [22] - Sarcopenic obesity, characterized by obesity and low muscle mass, poses a significant risk for older patients, highlighting the market potential for the company's drug candidates [22] Company Strategy and Development Direction - The company plans to focus exclusively on drug development following the sale of the FC2 female condom business, allowing for a more concentrated effort on its clinical programs [28] - Upcoming catalysts include the unblinded safety data for the Phase 2b quality study and regulatory clarity from the FDA regarding the Phase 3 program [16][30] - The company aims to propose a Phase 3 clinical program that is similar to the positive Phase 2b quality trial, targeting older patients with obesity or overweight [19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in having sufficient cash to last into the fourth quarter of the calendar year, allowing time to navigate upcoming clinical data releases and regulatory meetings [34] - The company is in active discussions for potential partnerships to secure non-dilutive funding for the Phase 3 program, emphasizing the unique value proposition of its drug candidates [37] - Management highlighted the importance of demonstrating the ability to maintain muscle mass while promoting fat loss, which is a key differentiator in the obesity treatment landscape [38] Other Important Information - The company recognized a gain on the sale of NTAPI assets of $974,000, contributing positively to its financial results [24] - The cash generated from the sale of the FC2 business was approximately $16.3 million, which will support ongoing operations and drug development efforts [30] Q&A Session Summary Question: Could you talk about your cash balance and runway options for funding the Phase 3? - Management indicated that there is enough cash to last into the fourth quarter and is exploring non-dilutive funding options, including partnerships with large pharmaceutical companies [34][37] Question: What outcomes would be considered a success for the Phase 2b extension maintenance study? - Success would be defined by the ability to blunt fat regain and potentially cause additional fat loss while maintaining muscle mass after stopping GLP-1 treatment [46][50] Question: What is the expected size of the Phase 3 study and concerns regarding tariffs? - The Phase 3 study is expected to involve approximately 400 patients, and management does not foresee significant tariff-related issues affecting the cost of goods for enobosarb [58][59]