Veru(US:VERU)2022-12-05 20:23Clinical Trials and Drug Development - Sabizabulin treatment resulted in a statistically significant 51.6% relative reduction in deaths compared to placebo in a Phase 3 study involving 204 hospitalized COVID-19 patients at high risk for ARDS and death [331]. - The FDA agreed that no additional efficacy or safety studies were required to support an Emergency Use Authorization (EUA) application for sabizabulin based on the positive Phase 3 study results [332]. - The UK’s MHRA and Australia’s TGA have expedited the review and registration of sabizabulin for emergency use in hospitalized COVID-19 patients at high risk for ARDS [333]. - The Company is conducting a Phase 3 clinical study (ENABLAR-2) to evaluate the efficacy and safety of enobosarm plus abemaciclib in approximately 186 subjects with AR+ ER+ HER2- metastatic breast cancer [339]. - The Phase 3 VERACITY study is enrolling approximately 245 men with metastatic castration-resistant prostate cancer to evaluate sabizabulin 32mg [341]. Financial Performance - The Company generated net revenues of $39.4 million in fiscal 2022, a 36% decrease from $61.3 million in fiscal 2021, with a net loss of $83.8 million [374]. - FC2 net revenues decreased by 35% year over year, with a 44% decrease in total unit sales and a 17% increase in average sales price per unit [375]. - Research and development expenses increased by 116% to $70.6 million in fiscal 2022 from $32.7 million in fiscal 2021, driven by multiple ongoing clinical trials [378]. - Selling, general and administrative expenses rose by 109% to $43.2 million in fiscal 2022, primarily due to increased personnel costs and commercialization efforts [380]. - The gross profit margin for fiscal 2022 was 78% of net revenues, consistent with fiscal 2021, despite a decrease in gross profit to $30.6 million [377]. Cash Flow and Investments - Cash and cash equivalents decreased to $80.2 million as of September 30, 2022, down from $122.4 million a year earlier, reflecting increased R&D expenditures [385]. - The company used cash of $47.5 million in operating activities for fiscal 2022, with a net loss of $83.8 million [389]. - Net cash from investing activities was $4.3 million in fiscal 2022, primarily from $5.0 million received on notes receivable from the sale of the PREBOOST business [391]. - Net cash provided by financing activities in fiscal 2022 was $1.1 million, mainly from stock option exercises [393]. - The company completed a public offering of 7,419,354 shares at $15.50 per share, generating net proceeds of $108.0 million in February 2021 [394]. Inventory and Product Availability - The Company has maintained sufficient inventory of FC2 to meet expected customer demand despite temporary disruptions due to COVID-19 [356]. - The Company has launched its own dedicated direct-to-patient telemedicine platform to drive sales growth [360]. - The Company is working to restore ordering patterns in the U.S. prescription channel through increased marketing efforts and new distribution partnerships [375]. - The decrease in FC2 net revenues in the global public health sector was primarily due to the absence of significant sales from Brazil and South Africa tenders in fiscal 2022 [375]. Market and Operational Risks - The Company has experienced increased costs in products, supplies, salaries, and general administrative expenses due to inflation, leading to price increases where possible [416]. - The Company's exposure to market risk is primarily related to fluctuations in raw material commodity prices, particularly nitrile polymer, and foreign currency exchange rate risk [417]. - The U.K. and Malaysia subsidiaries adopted the U.S. dollar as their functional currency, reducing foreign currency risk and stabilizing operating results [417]. - The Company may face pricing concessions or financial accommodations requests from distributors due to currency fluctuations impacting their operations [417]. Accounting and Valuation - IPR&D assets are considered indefinite-lived until project completion or abandonment, and are tested for impairment during this period [414]. - The valuation process for IPR&D assets is complex, requiring significant input and judgment regarding future volume, revenue, and expense growth rates [414]. - The Company has adopted recent accounting pronouncements, with additional information available in Note 1 of the financial statements [415].