Veru Inc. 2026 Q3 Earnings Call

Please go ahead. The statements made on this conference call may be forward-looking statements.

Forward-looking statements may include, but are not necessarily limited to, statements of the company's plans, objectives, expectations, or intentions regarding its business, operations, regulatory interactions, finances, and development and product portfolio. Such forward-looking statements are subject to known and unknown risks and uncertainties, and our actual results may differ significantly from those projected, suggested, or included in any forward-looking statements. Risks that may cause actual results or developments that differ materially are contained in our 10-Q and 10-K SEC filings, as well as in our press releases from time to time. I would now like to turn the conference call over to Dr. Mitchell Steiner, Veru Inc.'s Chairman, CEO, and President.

Good morning. With me on this morning's call are Dr. K. Gary Barnette, our Chief Scientific Officer, Michele Greco, Chief Financial Officer and Chief Administrative Officer, Phil Greenberg, our General Counsel, and Sam Fisch, Executive Director of Investor Relations and Corporate Communications. Thank you for joining us in our third quarter fiscal year 2026 earnings call. Veru is a late clinical stage biopharmaceutical company focused on developing innovative medicines for the treatment of cardiometabolic and inflammatory diseases. Our drug development program consists of two novel small molecules, enobosarm and sabizabulin.

The first one, enobosarm, is an oral selective androgen receptor modulator, SARM, and is being developed as a next generation drug that when combined with a GLP-1 receptor agonist, makes weight reduction more tissue selective for fat loss and preservation of lean mass and physical function, which is intended to lead to greater weight loss compared to a GLP-1 receptor agonist treatment alone, with a focus on older patients with obesity. Our second asset, sabizabulin, is a microtubule disruptor. It's being developed as a broad anti-inflammatory agent to reduce vascular plaque inflammation to slow the progression or promote the regression of atherosclerotic cardiovascular disease. This morning, we will focus on the update of the clinical development progress of enobosarm in our obesity program. We will also provide financial highlights for fiscal 2026, third quarter ended June 30th, 2026.

GLP-1s have been shown to produce significant weight loss in patients who are overweight or have obesity. Unfortunately, this weight loss is tissue non-selective, with a significant indiscriminate loss of both lean mass and fat mass. Of the total weight loss, up to 50% is attributable to lean mass loss. Although GLP-1 receptor agonist treatment has resulted in substantial weight loss for many patients, the strategy for the next generation of obesity drugs should be a combination therapy with GLP-1 receptor agonists to cause patients to only lose fat while preserving lean mass and physical function and bone mineral density for the highest QUALITY weight reduction. Veru has focused on the clinical development of enobosarm for QUALITY weight loss in older patients who may have sarcopenic obesity.

This means these patients have both obesity and low muscle mass and are potentially at the greatest risk for reduction to a critically low muscle mass, which may lead to physical function decline when taking a currently approved GLP-1 receptor agonist. As muscle mass loss alone does not define sarcopenia, we chose to objectively evaluate and measure physical function by a stair climb test, which is a common activity of daily living. Veru completed the Phase IIb QUALITY clinical study, which was a multi-center, double-blind, placebo-controlled, randomized dose-finding clinical trial designed to evaluate the safety and efficacy of enobosarm three milligrams, enobosarm six milligrams, or placebo as a treatment to augment fat loss and prevent muscle loss in 168 older patients greater than or equal to the age of 60 receiving semaglutide, which is Wegovy, for weight reduction.

It should be noted that the Phase IIb QUALITY clinical trial was the first human study to demonstrate that weight reduction in older patients who have obesity receiving a GLP-1 receptor agonist put them at higher risk for accelerated loss of lean mass with physical function decline. Further, enobosarm treatment preserved lean mass muscle, which translated into a reduction in the proportion of patients that had a clinically significant stair climb physical function decline when compared to patients receiving a GLP-1 receptor agonist alone. Based on this short-term Phase IIb QUALITY study, we believe there's an urgent unmet need for a drug that prevents the loss of muscle and physical function, as well as augments the loss of fat for greater weight loss in at-risk older patients with sarcopenic obesity receiving a GLP-1 receptor agonist for weight reduction.

A common and serious clinical and therapeutic challenge with GLP-1 receptor agonist treatments is that 88% of patients after one year on a GLP-1 receptor drug hit what's called a weight loss PLATEAU, where they stop losing additional weight. Based on the SURMOUNT-1 study conducted by Eli Lilly and Company, 62.6% of these patients, unfortunately, still had clinical obesity at the time they reached this weight loss PLATEAU of one year. One explanation might be that the non-selective loss of muscle caused by weight loss may reach a point that now stimulates appetite in patients receiving a GLP-1 receptor agonist, so they consume more calories, which in turn may cause patients to stop losing weight and hit their weight loss PLATEAU.

The clinical issue may be potentially more problematic in older patients that start out with low muscle reserves and who lost further muscle mass with weight loss but remain obese when they hit the weight loss plateau. It has been shown in previous studies that enobosarm directly burns fat and preserves muscle and physical function, which you burn even more calories. Thus retaining muscle, appetite stays suppressed while more calories are burned, which could help to break through the weight loss plateau, leading to incremental weight reduction.

We are currently conducting and have fully enrolled the phase IIb PLATEAU clinical trial, which is a double-blind, placebo-controlled study to evaluate the effect of enobosarm 3 milligrams on total body weight, fat mass, lean mass, physical function, bone mineral density, and safety in approximately 200 older patients age greater than or equals 65 who have obesity with a BMI of greater than or equal to 35 and are initiating semaglutide Wegovy GLP-1 receptor agonist treatment for weight reduction. The primary efficacy endpoint of this study is the percent change from baseline in total body weight at 68 weeks. An interim analysis will be conducted at 32 weeks to assess the percent change from baseline in lean body mass and total fat mass as measured by DEXA scan.

The key secondary endpoints for the overall study are total fat mass, total lean mass, physical function with the stair climb test, mobility disability assessment, bone mineral density, and a patient-reported outcome questionnaires, physical function, HbA1c, and insulin resistance. The objective of the phase IIb PLATEAU clinical trial is to focus on the effects of longer-term GLP-1 receptor agonist treatment in older patients who have obesity. The phase IIb PLATEAU clinical study will also assess the ability of enobosarm treatment to potentially break through the weight loss plateau observed in patients receiving a GLP-1 receptor agonist treatment to achieve a clinically meaningful incremental weight reduction, as well as preserve muscle mass and physical function by 68 weeks. We recently announced we have completed full enrollment of the phase IIb PLATEAU clinical trial with 239 patients enrolled.

This puts us on track for a near-term milestone, which is reporting the results of the 32-week interim analysis, which is expected in Q1 calendar year 2027. Semaglutide was selected as a GLP-1 receptor agonist for the phase IIb PLATEAU study to build on Veru's previous clinical experience using enobosarm in combination with semaglutide in the positive phase IIb QUALITY clinical study. Further, the clinical data from the phase IIb PLATEAU clinical trial using injectable semaglutide may support the use of oral semaglutide and oral enobosarm fixed dose combination in future phase III clinical trials. The choice for selecting semaglutide was also a strategic one. On June 2nd, 2026, Veru entered into a supply agreement with Novo Nordisk for this phase IIb PLATEAU clinical trial. In this agreement, Veru is solely responsible for conducting and sponsoring the phase IIb PLATEAU clinical study.

Novo Nordisk will supply Wegovy to Veru at no charge as required for the conduct of the phase IIb clinical study. Novo Nordisk provides Wegovy solely for the use within the study under the supply agreement. In return, Veru will provide Novo Nordisk with insights into obesity and weight management, trial design, methodology, and clinical conduct, including regular clinical study updates, protocol changes, and safety updates. While Veru maintains full global development and commercialization rights to enobosarm, Veru has granted Novo Nordisk a right of first negotiation if Veru in the future intends to develop, commercialize, or license enobosarm intellectual property in combination with any Novo Nordisk GLP-1 product, including Wegovy for any indication. For further information, please see Veru's Form 8-K filed with the SEC on June 4, 2026.