-- 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 --
Company to Host Investor Conference Call on Friday, January 5, 2018, 8 AM Eastern Time
MIAMI, Jan. 02, 2018 (GLOBE NEWSWIRE) -- 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 Results
For 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 Results
For 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 Details
Veru 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
|Condensed Consolidated Balance Sheets|
|September 30, 2017 and 2016|
|Accounts receivable, net||3,555,350||10,775,200|
|Income tax receivable||-||2,387|
|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|
|Plant and equipment, net||555,539||825,087|
|Deferred income taxes||8,827,000||13,482,000|
|Intangible assets, net||20,752,991||-|
|Accrued expenses and other current liabilities||1,441,359||2,380,571|
|Total current liabilities||5,487,581||3,346,477|
|Deferred income taxes||-||110,069|
|Total Stockholders' equity||48,453,205||33,933,411|
|Total liabilities and stockholders' equity||$||55,306,366||$||38,623,707|
|Condensed Consolidated Statements of Operations|
|Three Months Ended September 30, 2017 and 2016|
|Cost of sales||1,897,747||1,694,547|
|Selling, general and administrative||3,074,203||1,692,761|
|Research and development||1,494,509||-|
|Total operating expenses||4,568,712||2,161,546|
|Operating (loss) income||(2,774,053||)||(292,987||)|
|Interest, net and other expense, net||(10,913||)||(2,505||)|
|Foreign currency transaction loss||(20,997||)||(19,098||)|
|(Loss) income before income taxes||(2,805,963||)||(314,590||)|
|Income tax (benefit) expense||(126,628||)||1,436,351|
|Net (loss) income attributable to common stockholders before preferred stock dividend||(2,679,335||)||(1,750,941||)|
|Preferred stock dividend||1,990,771||-|
|Net (loss) income attributable to common stockholders||$||(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||)||$||(0.06||)|
|Diluted weighted average common shares outstanding||45,492,167||28,723,666|
|Condensed Consolidated Statements of Operations|
|Years Ended September 30, 2017 and 2016|
|Cost of sales||6,636,080||8,777,858|
|Selling, general and administrative||11,073,361||8,749,040|
|Research and development||3,504,482||99,393|
|Total operating expenses||15,513,624||10,330,972|
|Operating (loss) income||(8,494,112||)||3,018,512|
|Interest, net and other expense, net||(46,543||)||(57,056||)|
|Foreign currency transaction loss||(61,835||)||(147,540||)|
|(Loss) income before income taxes||(8,602,490||)||2,813,916|
|Income tax (benefit) expense||(1,990,443||)||2,469,191|
|Net (loss) income attributable to common stockholders before preferred stock dividend||(6,612,047||)||344,725|
|Preferred stock dividend||1,990,771||-|
|Net (loss) income attributable to common stockholders||$||(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||)||$||0.01|
|Diluted weighted average common shares outstanding||34,640,308||28,926,557|
|Condensed Consolidated Statements of Cash Flows|
|Years Ended September 30, 2017 and 2016|
|Net (loss) income||$||(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||)|
|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