-- Fiscal 2017 Marked by Actions to
Advance Drug Pipeline; First New Drug Application (NDA) on Track
for Submission in First Half of 2018; Three Additional NDAs
Expected to be Filed: Two in 2019 and One in 2020 --
Veru Inc. (NASDAQ:VERU) today announced its financial results for
the fiscal 2017 fourth quarter and full year ended September 30,
2017.
“Our fiscal 2017 financial results reflect the risk and
volatility associated with being a single product company and, more
importantly, validate the strategic rationale for the acquisition
completed late last year, which brought a pipeline of multiple
high-value, low-risk product candidates,” said Mitchell Steiner,
M.D., President and Chief Executive Officer of Veru. “While
revenues from FC2 were disappointing due in part to the sales cycle
and dependence on a few global public-sector customers, the past
year was marked by a number of critical accomplishments and
actions, including the excellent progress we made advancing the
development of our pipeline toward commercialization. These
efforts included meeting with the FDA to streamline and clarify the
regulatory pathway for approval of almost all of our drug
candidates.
“Following is a summary of our progress for products added as a
result of the acquisition: Tamsulosin DRS, a novel formulation of a
widely prescribed drug for benign prostatic hyperplasia (BPH),
completed the first and second stages of a bioequivalence clinical
trial; VERU-944, for hot flashes in men receiving hormone therapy
for prostate cancer, completed the necessary steps required to
initiate a Phase 2 clinical trial in early 2018; and VERU-111, a
New Chemical Entity (NCE) for advanced prostate and other cancers,
completed a significant portion of the required preclinical work as
well as established the process to manufacture the drug in
preparation of commencing human clinical trials in 2018.
“More recently, we monetized a portion of outstanding accounts
receivable and completed the acquisition of two exciting new drug
candidates, which not only address large patient populations but
also further expand our portfolio of products for the urology and
oncology markets. Importantly, the FDA has agreed that for
each product a single bioequivalence study would be acceptable for
a 505(b)(2) NDA filing. We also are encouraged by positive
preclinical data that showed additional efficacy of our VERU-111
product for a number of different cancer types. The new data
will be presented at national scientific meetings in 2018.
“Looking ahead, we expect to file with the FDA the Company’s
first New Drug Application (NDA) for Tamsulosin DRS in the first
half of 2018. Moreover, we plan to submit three additional
NDAs: two in 2019 and another NDA in 2020. Regarding sales of
our commercial products, we are seeing traction following the
implementation of several initiatives to grow our US revenue for
FC2 and we are optimistic about potential near-term orders for FC2
from two large international public-sector customers.”
Fiscal 2017 Fourth Quarter ResultsFor the
fiscal 2017 fourth quarter, net revenues increased to $3.7 million
from $3.6 million for the fourth quarter of fiscal 2016.
Gross profit was $1.8 million, or 49% of net revenues, compared
with $1.9 million, or 52% of net revenues, for the fourth quarter
of fiscal 2016. Selling, general and administrative
(SG&A) expenses were $3.1 million compared with $1.7 million
for the prior year fourth quarter. Research and development
(R&D) expenses were $1.5 million compared with a de minimis
amount in the prior year fourth quarter. Operating loss was
$2.8 million compared with $293,000 for the fourth quarter of
fiscal 2016. Net loss was $4.7 million, or $0.10 per share,
compared with $1.8 million, or $0.06 per share, for the fourth
quarter of fiscal 2016.
Fiscal 2017 Full-Year ResultsFor the fiscal
2017 full year, net revenues, which were primarily derived from
sales of FC2, were $13.7 million compared with $22.1 million for
fiscal 2016. Unit sales of FC2 were 26 million compared with
42 million in fiscal 2016. Financial results for fiscal 2016
included $6 million of net revenues based on unit sales of 11.5
million to Brazil. Excluding Brazil from the prior year
total, net revenues and unit sales were down 15 percent and 13
percent, respectively. Gross profit was $7.0 million, or 51%
of net revenues, compared with $13.3 million, or 60% of net
revenues for fiscal 2016. SG&A expenses were $11.1
million compared with $8.7 million for the prior year.
R&D expenses were $3.5 million compared with $99,000 in the
prior fiscal year. Operating loss was $8.5 million versus
operating income of $3.0 million for fiscal 2016. Net loss
was $8.6 million, or $0.25 per share, compared to net income of
$345,000, or $0.01 per diluted share, for fiscal 2016.
As of September 30, 2017, net working capital was $4.8 million
compared with $12.9 million as of the September 30, 2016.
During the year ended September 30, 2017, the Company
generated approximately $1 million of cash from operating
activities, versus cash used in operating activities of $1.7
million in the prior fiscal year. As of September 30, 2017,
cash was $3.3 million, short-term accounts receivable were $3.6
million and long-term accounts receivable was $7.8 million.
Conference Call Event DetailsVeru Inc. will
host a conference call on Friday, January 5, 2018 at 8 a.m. ET to
review the company’s performance. Interested investors may
access the call by dialing 877-317-6789 from the U.S., or
412-317-6789 from outside the U.S., and asking to be joined into
the call.
In addition, investors may access a replay of the conference
call the same day beginning at approximately noon ET by dialing
877-344-7529 for US callers, or 412-317-0088 from outside the U.S.,
passcode 10114690. The replay will be available for one week,
after which, the recording will be available via the company’s
website at https://veruhealthcare.com/investors.
About Veru Inc.Veru Inc. (Veru) is a
biopharmaceutical company focused on urology and oncology.
Veru utilizes FDA's 505(b)(2) regulatory approval pathway to
develop and commercialize drug candidates. FDA's 505(b)(2)
regulatory approval pathway is designed to allow for potentially
expedited, lower cost and lower risk regulatory approval based on a
previously established safety and efficacy profile of the
product. Veru is developing products under the 505(b)(1)
pathway as well, which is the traditional new drug application
(NDA) pathway. The company is currently developing drug product
candidates: Tamsulosin DRS, slow release granules, and Tamsulosin
XR capsules for lower urinary tract symptoms of benign prostatic
hyperplasia (BPH) (NDA planned 2018), Solifenacin DRG, slow release
granules, for overactive bladder (urge incontinence, urgency and
frequency of urination) (NDA planned 2019), Tadalafil/finasteride
combination capsule for restricted urination because of an enlarged
prostate (NDA planned 2019), VERU-944 (cis-clomiphene citrate) for
hot flashes in men associated with prostate cancer hormone
treatment (planned Phase 2 in 2018), VERU-722 (fixed ratio
clomiphene citrate) for male infertility, and VERU-111 a novel oral
anti-tubulin cancer therapy targeting alpha & beta tubulin for
a variety of malignancies, including metastatic prostate, breast,
endometrial and ovarian cancers (planned Phase1/2 in 2018).
To help support these clinical development programs, the company
markets and sells the PREBOOST® medicated individual wipe, which is
a male genital desensitizing drug product for the prevention of
premature ejaculation which is being co-promoted with Timm Medical
Technologies, Inc. and the FC2 Female Condom® (now available by
prescription in the US including through the virtual doctor
smartphone app “HeyDoctor” at www.fc2.us.com) in the United States
and through The Female Health Company Division in the Global Public
Health Sector. The Female Health Company Division markets to
entities, including ministries of health, government health
agencies, U.N. agencies, nonprofit organizations and commercial
partners, that work to support and improve the lives, health and
well-being of women around the world. More information about
Veru and its products can be found at
www.veruhealthcare.com, www.PREBOOST.com, www.fc2.us.com and
www.fc2femalecondom.com. For corporate and investor-related
information about the Company, please visit
https://veruhealthcare.com/investors.
"Safe Harbor" statement under the Private Securities
Litigation Reform Act of 1995:The statements in this
release that are not historical fact are "forward-looking
statements" as that term is defined in the Private Securities
Litigation Reform Act of 1995. Forward-looking statements in this
release include statements relating to the regulatory pathway to
secure FDA approval of the Company's drug candidates, the
anticipated timeframe for clinical studies and FDA submissions,
future demand for FC2 and potential orders of FC2 by public sector
customers. Any forward-looking statements in this are based
upon the Company's current plans and strategies, and reflect the
Company's current assessment of the risks and uncertainties related
to its business, and are made as of the date of this release. The
Company assumes no obligation to update any forward-looking
statements contained in this release because of new information or
future events, developments or circumstances. Such forward-looking
statements are inherently subject to known and unknown risks and
uncertainties. The Company's actual results and future developments
could differ materially from the results or developments expressed
in, or implied by, these forward-looking statements. Factors that
may cause actual results to differ materially from those
contemplated by such forward-looking statements include, but are
not limited to, the following: product demand and market
acceptance; competition in the Company's markets and the risk of
new competitors and new competitive product introductions; risks
relating to the ability of the Company to obtain sufficient
financing on acceptable terms when needed to fund development and
operations; risks related to the development of the Company's
product portfolio, including clinical trials, regulatory approvals
and time and cost to bring to market; many of the Company's
products are at an early stage of development and the Company may
fail to successfully commercialize such products; risks related to
intellectual property, including licensing risks; risks related to
concentration of accounts receivable with our largest customers and
the collection of those receivables; government contracting risks,
including the appropriations process and funding priorities,
potential bureaucratic delays in awarding contracts, process
errors, politics or other pressures, and the risk that government
tenders and contracts may be subject to cancellation, delay or
restructuring; a governmental tender award indicates acceptance of
the bidder's price rather than an order or guarantee of the
purchase of any minimum number of units, and as a result government
ministries or other public sector customers may order and purchase
fewer units than the full maximum tender amount; the Company's
reliance on its international partners in the consumer sector and
on the level of spending on the female condom by country
governments, global donors and other public health organizations in
the global public sector; the economic and business environment and
the impact of government pressures; risks involved in doing
business on an international level, including currency risks,
regulatory requirements, political risks, export restrictions and
other trade barriers; the Company's production capacity, efficiency
and supply constraints; risks related to the costs and other
effects of litigation; the Company's ability to identify,
successfully negotiate and complete suitable acquisitions or other
strategic initiatives; the Company's ability to successfully
integrate acquired businesses, technologies or products; and other
risks detailed in the Company's press releases, shareholder
communications and Securities and Exchange Commission filings,
including the Company's Form 10-K for the year ended September 30,
2017. These documents are available on the "SEC Filings" section of
our website at www.veruhealthcare.com/investors.
FINANCIAL SCHEDULES FOLLOW
|
Veru Inc. |
Condensed Consolidated Balance
Sheets |
September 30, 2017 and 2016 |
|
|
|
2017 |
|
|
2016 |
Cash |
$ |
3,277,602 |
|
$ |
2,385,082 |
Accounts
receivable, net |
|
3,555,350 |
|
|
10,775,200 |
Income tax
receivable |
|
- |
|
|
2,387 |
Inventory,
net |
|
2,767,924 |
|
|
2,492,644 |
Prepaid expenses
and other current assets |
|
697,097 |
|
|
634,588 |
Total current
assets |
|
10,297,973 |
|
|
16,289,901 |
|
|
|
|
Other trade
receivables |
|
7,837,500 |
|
|
7,837,500 |
Other assets |
|
156,431 |
|
|
189,219 |
Plant and equipment,
net |
|
555,539 |
|
|
825,087 |
Deferred income
taxes |
|
8,827,000 |
|
|
13,482,000 |
Intangible assets,
net |
|
20,752,991 |
|
|
- |
Goodwill |
|
6,878,932 |
|
|
- |
Total assets |
$ |
55,306,366 |
|
$ |
38,623,707 |
|
|
|
|
Accounts
payable |
$ |
2,685,718 |
|
$ |
701,035 |
Accrued expenses
and other current liabilities |
|
1,441,359 |
|
|
2,380,571 |
Unearned
revenue |
|
1,014,517 |
|
|
- |
Accrued
compensation |
|
345,987 |
|
|
264,871 |
Total current
liabilities |
|
5,487,581 |
|
|
3,346,477 |
|
|
|
|
Other liabilities |
|
1,233,750 |
|
|
1,233,750 |
Deferred rent |
|
131,830 |
|
|
- |
Deferred income
taxes |
|
- |
|
|
110,069 |
Total liabilities |
|
6,853,161 |
|
|
4,690,296 |
|
|
|
|
Total Stockholders'
equity |
|
48,453,205 |
|
|
33,933,411 |
Total liabilities and
stockholders' equity |
$ |
55,306,366 |
|
$ |
38,623,707 |
|
Veru Inc. |
Condensed Consolidated Statements of
Operations |
Three Months Ended September 30, 2017 and
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
Net revenues |
$ |
3,692,406 |
|
|
$ |
3,563,106 |
|
Cost of sales |
|
1,897,747 |
|
|
|
1,694,547 |
|
Gross profit |
|
1,794,659 |
|
|
|
1,868,559 |
|
Selling, general and
administrative |
|
3,074,203 |
|
|
|
1,692,761 |
|
Research and
development |
|
1,494,509 |
|
|
|
- |
|
Business
acquisition |
|
- |
|
|
|
468,785 |
|
Total operating
expenses |
|
4,568,712 |
|
|
|
2,161,546 |
|
Operating (loss)
income |
|
(2,774,053 |
) |
|
|
(292,987 |
) |
Interest, net and other
expense, net |
|
(10,913 |
) |
|
|
(2,505 |
) |
Foreign currency
transaction loss |
|
(20,997 |
) |
|
|
(19,098 |
) |
(Loss) income before
income taxes |
|
(2,805,963 |
) |
|
|
(314,590 |
) |
Income tax (benefit)
expense |
|
(126,628 |
) |
|
|
1,436,351 |
|
|
|
|
|
Net (loss) income
attributable to common stockholders before preferred stock
dividend |
|
(2,679,335 |
) |
|
|
(1,750,941 |
) |
|
|
|
|
Preferred stock
dividend |
|
1,990,771 |
|
|
|
- |
|
Net (loss) income
attributable to common stockholders |
$ |
(4,670,106 |
) |
|
$ |
(1,750,941 |
) |
|
|
|
|
Net (loss) income per
basic common share outstanding |
$ |
(0.10 |
) |
|
$ |
(0.06 |
) |
Basic weighted average
common shares outstanding |
|
45,492,167 |
|
|
|
28,723,666 |
|
|
|
|
|
Net (loss) income per
diluted common share outstanding |
$ |
(0.10 |
) |
|
$ |
(0.06 |
) |
|
|
|
|
Diluted weighted
average common shares outstanding |
|
45,492,167 |
|
|
|
28,723,666 |
|
|
Veru Inc. |
Condensed Consolidated Statements of
Operations |
Years Ended September 30, 2017 and
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
Net revenues |
$ |
13,655,592 |
|
|
$ |
22,127,342 |
|
Cost of sales |
|
6,636,080 |
|
|
|
8,777,858 |
|
Gross profit |
|
7,019,512 |
|
|
|
13,349,484 |
|
Selling, general and
administrative |
|
11,073,361 |
|
|
|
8,749,040 |
|
Research and
development |
|
3,504,482 |
|
|
|
99,393 |
|
Business
acquisition |
|
935,781 |
|
|
|
1,482,539 |
|
Total operating
expenses |
|
15,513,624 |
|
|
|
10,330,972 |
|
Operating (loss)
income |
|
(8,494,112 |
) |
|
|
3,018,512 |
|
Interest, net and other
expense, net |
|
(46,543 |
) |
|
|
(57,056 |
) |
Foreign currency
transaction loss |
|
(61,835 |
) |
|
|
(147,540 |
) |
(Loss) income before
income taxes |
|
(8,602,490 |
) |
|
|
2,813,916 |
|
Income tax (benefit)
expense |
|
(1,990,443 |
) |
|
|
2,469,191 |
|
|
|
|
|
Net (loss) income
attributable to common stockholders before preferred stock
dividend |
|
(6,612,047 |
) |
|
|
344,725 |
|
|
|
|
|
Preferred stock
dividend |
|
1,990,771 |
|
|
|
- |
|
Net (loss) income
attributable to common stockholders |
$ |
(8,602,818 |
) |
|
$ |
344,725 |
|
|
|
|
|
Net (loss) income per
basic common share outstanding |
$ |
(0.25 |
) |
|
$ |
0.01 |
|
Basic weighted average
common shares outstanding |
|
34,640,308 |
|
|
|
28,666,477 |
|
|
|
|
|
Net (loss) income per
diluted common share outstanding |
$ |
(0.25 |
) |
|
$ |
0.01 |
|
|
|
|
|
Diluted weighted
average common shares outstanding |
|
34,640,308 |
|
|
|
28,926,557 |
|
|
Veru Inc. |
Condensed Consolidated Statements of Cash
Flows |
Years Ended September 30, 2017 and
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
Net (loss) income |
$ |
(6,612,047 |
) |
|
$ |
344,725 |
|
|
|
|
|
Adjustments
to reconcile net (loss) income to net cash provided by (used in)
operating activities: |
Depreciation and amortization |
|
333,999 |
|
|
|
422,873 |
|
Amortization of intangible assets |
|
147,009 |
|
|
|
- |
|
Provision
for obsolete inventory |
|
345,179 |
|
|
|
(8,630 |
) |
Share-based compensation |
|
756,275 |
|
|
|
499,873 |
|
Warrants
issued |
|
542,930 |
|
|
|
- |
|
Deferred
income taxes |
|
(2,255,069 |
) |
|
|
2,054,817 |
|
Loss on
disposal of fixed assets |
|
73,992 |
|
|
|
699 |
|
|
|
|
|
|
|
|
|
Changes in
current assets and liabilities, net of effects of acquisition of a
business: |
Decrease
(increase) in accounts receivable |
|
7,226,825 |
|
|
|
(4,524,310 |
) |
Decrease
in income tax receivable |
|
2,387 |
|
|
|
18,864 |
|
(Increase) in inventory |
|
(479,418 |
) |
|
|
(738,834 |
) |
(Increase) in prepaid expenses and other assets |
|
(29,383 |
) |
|
|
(77,721 |
) |
(Decrease) increase in accounts payable |
|
897,471 |
|
|
|
(376,314 |
) |
Increase
in unearned revenue |
|
1,014,517 |
|
|
|
- |
|
(Decrease) increase in accrued expenses and other current
liabilities |
|
(981,779 |
) |
|
|
669,600 |
|
Net cash provided by
(used in) operating activities |
|
982,888 |
|
|
|
(1,714,358 |
) |
Net cash used in
investing activities |
|
(90,368 |
) |
|
|
(6,374 |
) |
Net increase (decrease)
in cash |
|
892,520 |
|
|
|
(1,720,732 |
) |
Cash at beginning of
period |
|
2,385,082 |
|
|
|
4,105,814 |
|
|
|
|
|
Cash at end of
period |
$ |
3,277,602 |
|
|
$ |
2,385,082 |
|
|
Contact:Kevin Gilbert
786-322-2213
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