Veru Inc (NASDAQ: VERU) has seen its share price climb by more than 15% this morning after the company announced positive results from a study into the efficacy of one of its drug candidates.
The study concerned sabizabulin, a novel dual antiviral and anti-inflammatory agent, and its use in the treatment of hospitalized moderate-severe COVID-19 patients at high risk for acute respiratory distress syndrome (ARDS) and death.
Using the primary endpoint of death at or before day 60, the treatment resulted in a clinically and statistically meaningful 55.2% relative reduction in deaths.
Veru said it has submitted a request for emergency use authorization with FDA and are in discussions with other regulatory authorities across the world
What is Veru Inc?
Veru is a Miami-based oncology biopharmaceutical company focused on developing medicines for the management of viral diseases and cancers.
Its commercial products comprise FC2 female condom/internal condom for the dual protection against unintended pregnancy and the transmission of sexually transmitted infections.
The company has a number of development drug candidates, which include Enobosarm and Sabizabulin, which are under clinical trial for the treatment of metastic breast cancer. Other drug candidates are aimed at treating conditions such as prostate cancer, metastatic castration and hot flashes.
As previously mentioned, Veru is also pursuing approval for its sabizabulin COVID-19 treatment.
The company was formerly known as The Female Health Company and changed its name to Veru Inc. in July 2017.
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How Does Veru Make Money?
Veru sells its commercial products to a mixture of ministries of health, government health agencies, UN agencies, nonprofit organizations, and commercial partners.
While most of its treatments are still under development, the company currently markets and sells the FC2, an FDA-approved product for dual protection against unplanned pregnancy and the transmission of sexually transmitted infections.
Veru Stock Financials
Veru stock has a price to book ratio of 6.59, compared to an average among biotechnology and pharmaceutical stocks of 9.93. This indicates that, compared to others in its sector, the stock could be undervalued.
It has a market cap of $1.03bn and a price to earnings ratio of -33.8 as the company is losing money.
In its most recent quarter, the company recorded revenue of $13.0m, a drop of 2% compared to the same period 12 months prior.
Veru Stock Risks
With any pharmaceutical company concerned with the development of drugs and clinical treatments, there are always risks surrounding their success at development and trial stages.
Additionally, the commercial success of a COVID-19 treatment like sabizabulin is reliant on continued demand. While that demand does look likely, as the virus is still infecting and hospitalizing patients worldwide, a downturn would be damaging to its prospects.
These circumstances or the failure of multiple of Veru’s drugs under development would be damaging to the business, as its current revenues are not significant enough to outweigh current operating costs.
Should You Invest in Veru Stock?
Demand could certainly be strong for Veru’s COVID-19 treatment if it achieves regulatory approval from the US Food and Drug Administration and other regulatory agencies around the world.
While COVID-19 no longer commands the column inches it did in the height of the pandemic, the virus remains a going concern. Hospitalisations remain significant, with the US 7-day average for hospitalisations sitting at almost 30,000 people at the time of writing. Worldwide new daily cases of COVID-19 stood at 1.2 million on 6 July according to data from Google News.
Sabizabulin aside, the company also has a number of other promising candidates and incoming revenues from its sexual health products. While these revenues are not enough to sustain the business indefinitely, the company’s cash and cash equivalents of $112.02m mean it does have healthy reserves.
As such, Veru could be an interesting proposition and the positive news about sabizabulin certainly enhances the case for investment.