Veru Reschedules Annual Meeting of Shareholders
Veru Inc. reschedules its 2024 Annual Meeting of Shareholders to allow time for reviewing restated financial statements. The company is in the process of restating historical financial statements, with expected filings by April 15, 2024. Research and development expenses were overestimated, leading to an extended cash runway for the company.
The disclosure by Veru Inc. regarding the restatement of historical financial statements is a matter that merits attention from a financial perspective. The restatement process suggests discrepancies between previously reported and actual research and development (R&D) expenses, impacting the company's cash flow projections. This could lead to a reassessment of the company's financial health and operational efficiency.
Investors often scrutinize the accuracy of financial statements as they reflect the company's ability to manage its resources. In this case, the overestimation of R&D expenses indicates a potential lapse in financial control and raises questions about the reliability of internal reporting mechanisms. The adjustment implies that the company will have a longer cash runway than initially reported, which might be perceived positively as it suggests a reduced immediate need for additional financing. However, the necessity for a restatement could also negatively affect investor confidence, potentially impacting the stock's valuation.
From a market perspective, Veru Inc.'s announcement can influence investor sentiment and market perception of the company's governance practices. Restatements can lead to volatility in the stock market as they are often unexpected and can indicate deeper issues within a company's operations or financial reporting. The delay in the Annual Meeting of Shareholders allows for a comprehensive review of the restated financials, which is important for maintaining transparency and trust with investors.
This news is particularly relevant to stakeholders and potential investors who are evaluating the company's long-term growth potential and its ability to manage R&D investments effectively. Companies in the biopharmaceutical sector are heavily reliant on R&D for their pipeline development and future revenue streams. Therefore, accurate accounting in this area is essential for projecting future performance and making informed investment decisions.
Corporate governance comes into sharp focus when a company announces a restatement of its financials. The disclosure by Veru Inc. may prompt a review of the company's internal controls and the effectiveness of its governance framework. Stakeholders will be interested in understanding the root causes of the overestimation of expenses and the steps the company is taking to prevent similar issues in the future.
For a biopharmaceutical company, maintaining rigorous financial controls is essential, especially when dealing with complex R&D accounting which involves estimates and judgments. The company's response to this issue, including the transparency of its communication and the corrective actions implemented, will be closely monitored. These factors are integral to restoring confidence among investors, regulators and partners.
03/22/2024 - 04:05 PM
--Restated historical financial statements expected to be filed no later than April 15, 2024--
--2024 Annual Meeting of Shareholders to follow financial statements filings--
MIAMI, FL, March 22, 2024 (GLOBE NEWSWIRE) -- Veru Inc. (NASDAQ: VERU), a late clinical stage biopharmaceutical company focused on developing innovative medicines for preserving muscle for high quality weight loss, oncology, and viral induced acute respiratory distress syndrome, today announced that it is rescheduling its 2024 Annual Meeting of Shareholders originally scheduled to be held on March 26, 2024. As previously disclosed, the Company is in the process of restating its historical financial statements which are expected to be finalized and filed no later than April 15, 2024. The Company’s estimated research and development expenses recorded were higher than the actual expenses that were incurred and the Company’s cash on hand is expected to last longer than initially stated. The Annual Meeting is being rescheduled to allow shareholders ample time to review the restated financial statements.
The Company’s Current Report on Form 8-K filed February 15, 2024, disclosed the need for the restatement due to overestimating certain research and development expenses associated with the Company’s projects with third-party service providers and the accounting for these expenses. The Company records estimated expenses of research and development activities conducted by third-party service providers based on factors such as estimates of the work completed as provided to the Company by confirmations by such third-party service providers and provisions within agreements with such third-party service providers such as scope of work, payment, timeline and similar provisions. The Company’s estimated research and development expenses recorded were higher than the actual expenses that were incurred. The net result of research and development estimated expenses being recorded at too high of an amount is that the Company’s cash on hand is expected to last longer than initially stated.
Once the Company has completed and filed the restated financial statements, the Company will notify shareholders of the new date and time for its Annual Meeting.
About Veru Inc.
Enobosarm, a selective androgen receptor modulator (SARM), is being developed for two indications: (i) Phase 2b clinical study of enobosarm as a treatment to augment fat loss and to prevent muscle loss in sarcopenic obese or overweight elderly patients receiving a GLP-1 RA who are at-risk for developing muscle atrophy and muscle weakness and (ii) subject to the availability of sufficient funding, Phase 3 ENABLAR-2 clinical trial of enobosarm for the treatment of androgen receptor positive (AR+), estrogen receptor positive (ER+) and human epidermal growth factor receptor 2 negative (HER2-) metastatic breast cancer in the 2nd line setting.
Sabizabulin, a microtubule disruptor, is being developed as a Phase 3 clinical trial for the treatment of hospitalized patients with viral-induced ARDS. The Company does not intend to undertake further development of sabizabulin for the treatment of viral-induced ARDS until we obtain funding from government grants, pharmaceutical company partnerships, or other similar third-party external sources.
The Company also has an FDA-approved commercial product, the FC2 Female Condom® (Internal Condom), for the dual protection against unplanned pregnancy and sexually transmitted infections.
About Enobosarm
Enobosarm (aka ostarine, MK-2866, GTx-024, and VERU-024), a novel daily oral selective androgen receptor modulator (SARM), has been previously studied in 5 clinical studies involving 968 older normal men and postmenopausal women as well as older patients who have muscle wasting because of advanced cancer. Advanced cancer simulates a “starvation state” where there is significant unintentional loss of both muscle and fat mass like that seen with GLP-1 RA treatment. The totality of the clinical data from these five clinical trials demonstrates that enobosarm treatment leads to preservation of muscle mass with improvements in physical function as well as significant reductions in fat mass.
Enobosarm has a large safety database, which includes 27 clinical trials involving 1581 men and women dosed with duration of treatment in some patients for up to 3 years. In this large safety database, enobosarm was generally well tolerated with no increase in gastrointestinal side effects. This is important as there are already significant and frequent gastrointestinal side effects with a GLP-1 RA treatment alone.
The efficacy and safety clinical data that were generated from five enobosarm clinical trials in both elderly patients and in patients with a cancer induced starvation-like state provide strong clinical rationale for enobosarm. The expectation is that enobosarm in combination with a GLP-1 RA would potentially augment the fat reduction with higher quality total weight loss while preserving muscle and physical function.
Planned Phase 2b enobosarm clinical trial design for potentially high quality weight loss
The Phase 2b, multicenter, double-blind, placebo-controlled, randomized, dose-finding clinical trial is designed to evaluate the safety and efficacy of enobosarm 3mg, enobosarm 6mg, or placebo as a treatment to preserve muscle and augment fat loss in 90 sarcopenic obese or overweight elderly (>60 years of age) patients receiving a GLP-1 RA who are at-risk for developing muscle atrophy and muscle weakness. The primary endpoint is lean body mass (muscle), and the key secondary endpoints are total body fat mass and physical function at 16 weeks. The IND has received FDA clearance, and the clinical study is expected to begin in April 2024 with the topline clinical results from the trial expected calendar year-end 2024.
After completing the efficacy dose-finding portion of the Phase 2b clinical trial, participants will then continue into a Phase 2b extension clinical trial where all patients will stop receiving a GLP-1 RA, but will continue taking placebo, enobosarm 3mg, or enobosarm 6mg for an additional 12 weeks. The Phase 2b extension clinical trial will evaluate whether enobosarm can maintain muscle and prevent the fat and weight rebound that occurs after stopping a GLP-1 RA drug. The topline results of the separate Phase 2b extension clinical study is expected in calendar Q2 2025.
Forward-Looking Statements
Investor and Media Contact:veruinvestor@verupharma.com
When are the restated historical financial statements expected to be filed?
The restated historical financial statements are expected to be filed no later than April 15, 2024.
Why is Veru Inc. rescheduling its 2024 Annual Meeting of Shareholders?
Veru Inc. is rescheduling its Annual Meeting to allow shareholders ample time to review the restated financial statements.
What was disclosed in the Company's Current Report on Form 8-K filed on February 15, 2024?
The Current Report disclosed the need for restatement due to overestimating research and development expenses associated with projects with third-party service providers.
How were the estimated research and development expenses recorded different from the actual expenses?
The estimated research and development expenses recorded were higher than the actual expenses that were incurred.
What impact did overestimating expenses have on Veru Inc.'s cash on hand?
Overestimating expenses resulted in the company's cash on hand expected to last longer than initially stated.
