Veru Inc. Q1 FY2026 Earnings Call - Regulatory clarity for enobosarm, Phase 2b PLATEAU to test fat-selective weight loss and muscle/bone preservation

Conference Call Operator: This event is being recorded. I would now like to turn the conference call over to Mr. Sam Fisch, Veru Inc.’s Executive Director, Investor Relations and Corporate Communications. Please go ahead.

Unidentified Speaker (Likely Investor Relations), Veru Inc.: Good morning. 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 10Q and 10K 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.

Dr. Mitchell Steiner, Chairman, CEO, and President, Veru Inc.: Good morning. With me on this morning’s call are Dr. Gary Barnette, our Chief Scientific Officer, Michele Greco, our Chief Financial Officer and Chief Administrative Officer, Phil Greenberg, General Counsel, and Sam Fisch, Executive Director of Investor Relations and Corporate Communications. Thank you for joining our first quarter fiscal year 2026 earnings call. Veru is a late clinical stage biopharmaceutical company focused on developing novel medicines for the treatment of cardiometabolic and inflammatory diseases. Our drug development program consists of two new chemical entities, 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 and, as demonstrated in our company’s recently completed Phase 2b QUALITY study, makes weight reduction more tissue selective, fat loss, and preservation of lean mass and physical function, which is intended to lead to greater weight loss compared to GLP-1 receptor agonist treatment alone, with a focus on older patients with obesity. Our second asset, sabizabulin, a microtubule disruptor, is 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 our obesity program, and we will also provide financial highlights for fiscal 2026 first quarter ended December 31st, 2025.

GLP-1 receptor agonists 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 the indiscriminate significant loss of both lean mass and fat. Of the total weight loss, up to 50% is attributable to lean mass. Although the GLP-1 receptor agonist treatment has resulted in profound weight loss for many patients, the strategy for the next generation of obesity drugs should be a combination therapy with a GLP-1 receptor agonist for patients to lose fat only while preserving lean mass and physical function and bone mineral density for the highest quality weight reduction.

Veru’s completed positive phase 2b QUALITY clinical trial conducted in 168 older patients with obesity provided a proof of concept that enobosarm could be that next generation drug in combination with a GLP-1 receptor agonist to make the weight loss journey more selective for only fat loss while preserving lean mass and physical function during the active weight loss period, but also notably, after semaglutide was discontinued and enobosarm monotherapy significantly prevented the regain of both body weight and fat mass, such that by the end of the 28-week study, there was greater loss of fat mass while preserving lean mass for higher quality weight reduction compared to the placebo group. In September of 2025, we announced a successful FDA meeting providing regulatory clarity for the development of enobosarm in combination with a GLP-1 receptor agonist for greater quality weight loss and treatment of obesity.

According to FDA feedback, there are at least two possible regulatory pathways for the development of enobosarm in combination with a GLP-1 receptor agonist treatment for obesity with preservation of lean mass, which are based on incremental weight loss. First, incremental weight loss with at least a 5% placebo-corrected weight loss difference at 52 weeks of maintenance treatment with enobosarm in combination with GLP-1 receptor agonist treatment compared to GLP-1 receptor agonist treatment alone may be an acceptable primary endpoint to support efficacy for approval.

Second, if the incremental weight loss is less than 5% corrected weight loss, including similar weight loss at 52 weeks of maintenance treatment with enobosarm in combination with GLP-1 receptor agonist treatment compared to GLP-1 receptor agonist treatment alone, but the enobosarm treatment group demonstrates a clinically significant positive benefit, such as a statistically significant and clinically meaningful benefit in the preservation of physical function, this may also be acceptable to support efficacy for approval. FDA also confirmed that enobosarm 3 mg is an acceptable dosage for future Veru clinical development. Now, coincidentally, on December 19th, 2025, the FDA announced that total hip bone mineral density, that’s BMD, assessed by DEXA scan qualifies as a validated surrogate endpoint for drug development in postmenopausal women with osteoporosis at risk for fracture instead of the current standard that requires phase III clinical studies must use bone fractures as a primary endpoint.

This is relevant for our enobosarm obesity program, as it’s been reported in the scientific literature that GLP-1 receptor agonist therapy affects body composition by also reducing BMD. In fact, the semaglutide Wegovy FDA label has recently been updated to include the safety concern of increased risk of hip and pelvic fractures based on the SELECT cardiovascular trial, which was sponsored by Novo Nordisk in over 17,000 subjects. In the SELECT trial, four to five times more hip fractures of the hip and pelvis were reported on Wegovy than on placebo in female patients and in all patients aged 75 and older. The good news for our enobosarm obesity program is that in previously published preclinical studies and rat models of postmenopausal female osteoporosis, enobosarm has been shown to have both anabolic and anti-resorptive activities that result in increased bone mineral density.

Consequently, this means that distinct from incremental weight loss or muscle preservation and physical function as primary endpoints, improving BMD in postmenopausal women with obesity receiving a GLP-1 receptor agonist who also have osteoporosis could be another primary endpoint going forward for enobosarm to seek regulatory approval for improving body composition. Now, let’s turn to the current status of our planned Phase 2b PLATEAU clinical study. A common and serious clinical and therapeutic challenge with GLP-1 receptor agonist treatments is that 88% of patients with obesity, after one year on a GLP-1 receptor agonist drug, hit a weight loss plateau where they stopped losing additional weight. This is based on the SURMOUNT-1 study conducted by Eli Lilly and Company. Unfortunately, 62.6% of these patients still have clinical obesity at the time they reach the weight loss plateau.

One explanation might be that the loss of muscle may stimulate appetite in patients receiving a GLP-1 receptor agonist to consume more calories, which may be an important reason why patients hit that weight loss plateau. Enobosarm has been shown in clinical studies to directly burn fat to preserve muscle to increase physical function and to burn more calories, which could help break through the weight loss plateau, leading to incremental weight reduction. Veru’s planned Phase 2b PLATEAU clinical study is a double-blind, placebo-controlled study to evaluate the effect of enobosarm 3 mg on total body weight, fat mass, lean mass, physical function, bone mineral density, and safety in approximately 200 older patients aged greater than or equal to 65 years of age who have obesity with a BMI of greater or equal to 35 and are initiating semaglutide treatment for weight reduction.

The primary efficacy endpoint of the study is the percent change from baseline in total body weight at 68 weeks. An interim analysis will be conducted at 34 weeks to assess the percent change from baseline in lean body mass and fat mass as measured by DEXA scan. The key secondary endpoints are total fat mass, total lean mass, physical function using the stair climb test, bone mineral density, and the patient-reported outcome questionnaires for physical function, HbA1c, and insulin resistance. Semaglutide was selected as a GLP-1 receptor agonist for the Phase 2b PLATEAU study to build on Veru’s previous clinical experience using enobosarm in combination with semaglutide in the Phase 2b QUALITY clinical study.

Further, there’s now an oral form of semaglutide, which may be used in combination with oral enobosarm in future Phase III clinical studies, making the potential bridging of the future Phase III clinical studies data to the Phase 2b PLATEAU enobosarm plus injectable semaglutide data possible. In contrast, tirzepatide injectable does not have an oral formulation. The principal investigator for the Phase 2b PLATEAU clinical trial will be, again, Steven Heymsfield, MD, professor and the director of the Body Composition Metabolism Laboratory at the Pennington Biomedical Research Center in Baton Rouge, Louisiana. The clinical study is expected to begin this quarter. An interim analysis to assess change in lean body mass and fat mass as measured by DEXA will be conducted at 34 weeks, which is anticipated to be in the first quarter of calendar year 2027.

I will now turn the call over to Michele Greco, CFO/CAO, to discuss the financial highlights. Michele?

Michele Greco, Chief Financial Officer and Chief Administrative Officer, Veru Inc.: Thank you, Dr. Steiner. On October 31st, 2025, Veru completed an underwritten public offering of 1.4 million shares of our common stock, pre-funded warrants to purchase up to 7 million shares of our common stock, accompanying Series A warrants to purchase up to 8.4 million shares of our common stock, and accompanying Series B warrants to purchase up to 8.4 million shares of our common stock at a public offering price of $3 per share of common stock and the accompanying Series A and Series B warrants. Net proceeds to the company from this offering were approximately $23.4 million after deducting underwriting costs and discounts paid by the company. In the prior year period, on December 30th, 2024, Veru sold the FC2 Female Condom business to Rubedo Holdings, Inc.

In our financial statements, all direct revenues, costs, and expenses related to the FC2 Female Condom business are classified within loss from discontinued operations, net of tax in the statements of operations. Now, let’s review the results for the three months ended December 31st, 2025. Research and development costs decreased to $1.3 million from $5.7 million in the three months ended December 31st, 2024. The decrease is primarily due to a wind-down of the Phase 2b QUALITY clinical study for enobosarm as a treatment to augment fat loss and prevent muscle loss, which was completed during fiscal 2025. General administrative expenses were $4.1 million compared to $5.2 million in the prior quarter. The decrease is primarily due to a decrease in share-based compensation.

We recognize a gain on the sale of Entadfi assets of $695,000 in the prior quarter, which is based on non-refundable consideration received related to promissory notes previously due to Veru. As the promissory notes are now settled, no additional gain is expected in future periods. In conjunction with the sale of the FC2 Female Condom business, we recorded a gain on extinguishment of debt of $8.6 million in the prior year’s quarter related to the termination of the residual royalty agreement. During the prior fiscal year, the company entered into a settlement agreement with Oncternal Therapeutics, Inc., whereby the company received a cash payment of $6.3 million in Series D preferred stock in a warrant, which had a combined fair value of $2.5 million. The loss associated with the change in fair value of securities held related to Oncternal Therapeutics was $0.1 million compared with $0.3 million for the prior period.

The bottom-line result was a net loss of $5.3 million or 26 cents per diluted common share compared to a net loss of $8.9 million or 61 cents per diluted common share in the prior year’s quarter. For the prior period’s quarter, the net loss included a net loss of $7.1 million from discontinued operations. Now, looking at the balance sheet, as of December 31st, 2025, our cash, cash equivalents, and restricted cash balance was $33 million compared to $15.8 million as of September 30th, 2025. On both December 31st, 2025, and September 30th, 2025, there was $0.1 million of restricted cash related to the sale of the FC2 Female Condom business. Our net working capital was $29.7 million as of December 31st, 2025, compared to $11.1 million as of September 30th, 2025. The company is not profitable and has had negative cash flow from operations.

Based on the company’s current operating plan, our cash as of the issuance date of these financial statements is expected to be sufficient for the company to fund operations through the interim analysis in the Phase 2b PLATEAU clinical study to assess percent change from baseline in lean body mass and fat mass as measured by DEXA scans. During the three months ended December 31st, 2025, we used cash of $6.2 million for operating activities compared with $11.3 million used for operating activities in the prior period. There was no cash generated from investing activities in the current period. For the three months ended December 31st, 2024, we generated cash from investing activities of $17.2 million, primarily from proceeds from the sale of the FC2 Female Condom business of $16.2 million.

Net cash provided by financing activities for the three months ended December 31st, 2025, was $23.4 million, which were the proceeds from the sale of common stock and warrants in an underwritten public offering, net of commissions and costs. We used cash in financing activities for the three months ended December 31st, 2024, of $4.2 million related to the change of control payment to SWK pursuant to the residual royalty agreement, which terminated in conjunction with the sale of the FC2 Female Condom business. Now, I’d like to turn the call back to Dr. Steiner. Dr. Steiner?

Dr. Mitchell Steiner, Chairman, CEO, and President, Veru Inc.: Thank you, Michele. With that, we’ll now open the call to questions. Operator?

Conference Call Operator: Ladies and gentlemen, at this time, we will begin the question-and-answer session. To ask a question, you may press star, then one on your telephone keypad. If you’re using a speakerphone, we ask that you pick up your handset before pressing the keys to ensure the best sound quality. To withdraw your question, please press star and then two. Please limit yourself to one question and one follow-up. If you have further questions, you may re-enter the question queue. Once again, that is star one to rejoin the question queue. Our first question comes from Edward Nash with Canaccord. Please go ahead.

Edward Nash, Analyst, Canaccord: Hey. Good morning, guys. Thanks so much for taking my question. I wanted to first just add just a couple of questions. One was, why not use the oral semaglutide in this study as opposed to having the optionality in the Phase III? Is it just because of it’s relatively new now, its lack of real-world data?

Dr. Mitchell Steiner, Chairman, CEO, and President, Veru Inc.: I think the reason is that we’re trying to minimize the potential difference between what we saw in the phase 2b QUALITY study and what we want to see in the PLATEAU study. And so the oral form is not exactly the same as the injectable. The injectable is a little bit better. So that means that we show what we need to show in the phase 2b PLATEAU study, then we should see even a better response with an oral semaglutide that doesn’t do as well as the injectable. So really, it’s been calculated, took a step back, and said, "Why do we want to change and add tirzepatide now and essentially create a completely different study with different outcomes, potentially?" So we’re trying to be safe as we move towards it.

Now, with that said, semaglutide is the active ingredient in both the injectable and the oral, and so that could be easily bridged. What you’re trying to bridge is not the efficacy because we’re going to be testing the efficacy in the Phase III. What you want to bridge is into all the safety, and you should be able to do that.

Edward Nash, Analyst, Canaccord: Got it. Thank you. And just one follow-up is, with regard to the functional aspect of the FDA allowing that as a potential approval pathway, preservation of function, did you guys specifically discuss with the agency about stair climb test and the specific questionnaires that you’re looking to employ to determine whether or not they consider those to be sufficient for that endpoint?

Dr. Mitchell Steiner, Chairman, CEO, and President, Veru Inc.: Yes. So yes, we did speak to the agency specifically about stair climb test. And as you know, we’ve done 5 now with the QUALITY studies, 6 studies previously done with enobosarm and done by our company here at Veru with 1,000 patients using stair climb test. So we have 20 years’ experience with stair climb test. And it’s not just talking to the agency with this trial and other trials, but also every major scientific group. And stair climb test still comes out as the best way to measure what’s happening in this patient population. It’s most sensitive to declines, and it’s very sensitive to anabolic intervention. With that said, the main comment that the FDA brought up was, in the conduct of the study, they wanted to make sure that we did duplicate stair climb test runs. In other words, the patient goes up the stairs once and then goes up a second, and then you average that.

They also wanted to make sure that, in addition to loaded, that we did unloaded. What that means is that when a patient goes up the stairs, unloaded means they just go up just as they are. Loaded means that you add a backpack with some weight. And the concept there, which is kind of clever, is that we’re trying to normalize weight. And the way you normalize weight is that you just add back the weight that they lost when they come back for that final visit. And you do that with the plates. And so this way, you’re actually measuring and challenging the patient’s muscles, and that’s why it becomes such a sensitive measure of intervention. And so we had those kinds of discussions with the FDA.

What’s open and what we’re going to focus on in the PLATEAU study is also what happens with the patient-reported outcomes and how the patient-reported outcomes helps to further define how a patient functions and feels. And so that’s why the phase II makes more sense than jumping to a phase III because that will help with the clinical meaningfulness of what we’re actually measuring objectively.

Edward Nash, Analyst, Canaccord: Got it. Thank you very much.

Conference Call Operator: The next question comes from Rohan Mathur with Oppenheimer. Please go ahead.

Rohan Mathur, Analyst, Oppenheimer: Hey. This is Rohan Mathur. Thanks for the question. I just wanted to ask, on the interim analysis plans, are there any pre-specified decision rules with respect to futility or alterations of the sample size that are part of the criteria there? Thank you.

Dr. Mitchell Steiner, Chairman, CEO, and President, Veru Inc.: So I have Dr. Gary Barnette, our Chief Scientific Officer. And Gary?

Dr. Gary Barnette, Chief Scientific Officer, Veru Inc.: Yeah. No, there’s no futility analysis or sample size re-estimation associated with this interim analysis.

Dr. Mitchell Steiner, Chairman, CEO, and President, Veru Inc.: As you know, the primary endpoint is weight loss. The interim analysis is looking at lean mass and fat mass. The real purpose of it is to gain confirmation that we’re heading in the right direction, meaning that you’re seeing the lean mass preservation and the additional fat mass loss. At 34 weeks, that should translate to 68 weeks of weight loss benefit. From a statistical standpoint, by not looking at total weight loss plus it’s too early anyway, at 34 weeks, you’re not taking a statistical penalty or an alpha hit at the interim, which will affect the amount of alpha spend you have at the end of the study.

Rohan Mathur, Analyst, Oppenheimer: Got it. Just one more from me. If you go down the route of assessing functional benefit, and in the case that maybe less than 5% weight loss is observed, is there any sense for what degree of weight loss needs to be seen, and does that counterbalance by the magnitude of functional benefit?

Dr. Mitchell Steiner, Chairman, CEO, and President, Veru Inc.: Yeah. So as I said in my public statements, that question’s come up before. So greater than 5% alone. Weight loss, incremental weight loss, you’re in. If it’s less than 5% and the weight loss could be similar to the GLP-1 receptor agonist alone, meaning that you didn’t see an incremental weight loss difference at all, but, but, but you showed a physical function benefit, then that can be a basis for approval going forward.

Rohan Mathur, Analyst, Oppenheimer: Understood. Thank you.

Conference Call Operator: Ladies and gentlemen, this concludes our question-and-answer session. I would like to turn the conference back over to Dr. Mitchell Steiner for any closing remarks.

Dr. Mitchell Steiner, Chairman, CEO, and President, Veru Inc.: Thank you. I appreciate everyone who joined us on today’s call, and I look forward to updating you all on our progress and our next investor call. Thank you again.

Conference Call Operator: The digital replay of the conference call will be available beginning approximately 12:00 P.M. Eastern Time today, February 11th, by dialing 1-855-669-9658 in the US and 1-412-317-0088 internationally. You’ll be prompted to enter the replay access code, which will be 7414536. Please record your name and company when joining. The conference call has now concluded. Thank you for attending today’s discussion.