Veru Inc. (VERU) Earnings Call Transcript
February 8, 2021
Earnings Call Speaker Segments
Good morning, ladies and gentlemen, and welcome to Veru Inc.'s investor conference call. [Operator Instructions] Please note that this event is being recorded. I would now like to turn the conference over to Mr. Sam Fisch, Veru Inc.'s Director of Investor Relations. Please go ahead.
Good morning. The statements made in this conference 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 the company's business operations, finances and product portfolio. Such forward-looking statements are subject to known and unknown risks and uncertainties. And the company's actual results may differ significantly from those projected or suggested or included in any forward-looking statements. Risks that may cause actual results or developments to differ materially are contained in the company's 10-Q and 10-K SEC filings. I would now like to turn the conference over to Dr. Mitchell Steiner, Veru Inc.'s Chairman, CEO and President. Please go ahead.
Thank you, Sam, and good morning. With me on this morning's call are Dr. Gary Barnette, he's our Chief Scientific Officer; and Sam Fisch, you've met, Director of Investor Relations. Thank you for joining our call. Veru Inc. is oncology biopharmaceutical company. We hypothesized that based both on its mechanism of action as a microtubule disruptor and on the results of the preclinical studies we conducted that VERU-111 had the potential to a two-pronged action against COVID-19 as a broad-spectrum antiviral and an anti-inflammatory agent. Although not our focus as an oncology company, we felt duty-bound due to the global pandemic to push forward. And we conducted a double-blind, randomized, placebo-controlled Phase II clinical trial evaluating oral once-a-day dosing of VERU-111 versus placebo in approximately 40 hospitalized patients with COVID-19, who had high risk for Acute Respiratory Distress Syndrome. I'm very pleased to report that we announced today positive efficacy and safety results from this Phase II study. Here is a brief summary of the results. The primary endpoint is the proportion of patients who are alive without respiratory failure. We reported in the press release the treatment failures, which is defined as a proportion of patients that are dead or live with respiratory failure. This is a more common way to report these data and have the same exact statistical and clinical significance. Therefore, for the primary endpoint of hospitalized patients that had greater than a dose of study drug, VERU-111 treatment compared to placebo had a statistically significant and clinically meaningful reduction in the proportion of patients with treatment failures with a 30% treatment failure rate in the placebo group of N equals 20 compared to 5.6% in the VERU-111-treated group, N equals 18 at day 29. This represents an 81% relative reduction in treatment failures and shows statistical significance with a p-value of 0.05. In the subgroup analyses of the treatment in patients at high risk for ARDS, in an analysis of older patients that were greater than 60 years of age diagnosed with COVID-19, who are at higher risk with death and respiratory failure, treatment failures were 9% for VERU-111 versus 50% from placebo, and the p-value is 0.046. In analysis of patients with severe COVID-19, that's a WHO Score of Disease Severity of greater or equal to 5, so they're hospitalized and on oxygen at baseline, the treatment failures were 11% for VERU-111 versus 54% for placebo, and that p-value is 0.04. Now for some of the key secondary endpoints, this is a key one. This is deaths. In the intent-to-treat population, VERU-111 reduced the proportion of patients who died on study from 30%, that's 6 out of 20 patients in the placebo group, to 5.3%, 1 out of 19 in the VERU-111-treated group, and that p-value is 0.044. This is an 82% relative reduction in mortality in the VERU-111-treated group. In patients that received greater than 1 dose of VERU-111 or placebo, VERU-111 showed a statistically significant and clinically meaningful reduction in days in ICU, VERU-111 patients at 3 days on average versus placebo at 9.55 days on average with a p-value of 0.04. Additionally, the proportion of patients in the ICU for greater than or equal to 3 days on study was significantly lower for VERU-111 at 28% versus placebo at 60%, and that p-value is 0.046. VERU-111 reduced the days on mechanical ventilation from an average of 5.4 days in the placebo group to 1.6 days in the VERU-111-treated group. During the study, the standard of care included the treatment with remdesivir and/or dexamethasone under the Emergency Use Authorization. A subgroup analysis of patients that received standard of care was conducted. In patients that received standard of care, VERU-111 treatment resulted in a statistically significant reduction in average days in the ICU for VERU-111 to 1.43 days versus placebo at 8.83 days, and that p-value is 0.024. And average days on mechanical ventilation, VERU-111 had 0 days versus placebo had 6 days, and the p-value is 0.0427. And to emphasize or to reiterate, in the VERU-111 group plus standard of care, no patient required mechanical ventilation on study. VERU-111 was tolerated with a good safety profile. The company has been granted an expedited end of Phase II meeting with FDA to discuss next steps, including a Phase III clinical registration trial for the VERU-111 COVID-19 program. I want to emphasize that we currently have the resources necessary to conduct this trial. And the company expects that this confirmatory study will have a similar trial design to the completed Phase II study to evaluate daily oral doses of VERU-111 versus placebo with the primary efficacy endpoint of proportion of patients alive without respiratory failure at day 29. It's expected that the Phase III clinical trial will be conducted in approximately 200 hospitalized patients who have COVID-19 and are at high risk for Acute Respiratory Distress Syndrome. The company has enough clinical drug supply on hand to complete the Phase III clinical study. Once agreed upon by FDA, the Phase III is expected to commence in April of 2021 and conclude by the fourth quarter of calendar year 2021. We will seek funding from the Biomedical Advanced Research and Development Authority of the U.S. Department of Health and Human Services, BARDA, and other agencies to fund the estimated amount of commercial drug to supply the needs of the U.S. population, assuming confirmatory positive clinical results and FDA approval. In fact, BARDA has already granted Veru a meeting to discuss possible grant funding for the Phase III study and the manufacturing scaleup. In summary, we're very pleased with the results of our Phase II clinical trial, which demonstrated clinically meaningful reductions in relevant endpoints, including respiratory failure, days in the ICU and on mechanical ventilation and patient mortality. We believe VERU-111 has significant potential in treating COVID-19, having both broad-spectrum antiviral and anti-inflammatory activities. Due to the urgency of the global pandemic and the need for more effective treatment options for patients, we again are duty-bound to pursue this indication even though it's not been a primary focus of Veru. We have the resources to conduct the Phase III trial without impacting our cancer drugs' clinical development. We look forward to our upcoming discussions with FDA concerning the regulatory and clinical developments to move VERU-111 for COVID-19 forward. I will now open the call to questions.
[Operator Instructions] And today's first question comes from Brandon Folkes with Cantor Fitzgerald.
Congratulations on the data. Mitch, maybe just if you could share just when we look to the Phase III design, you expect a pretty similar design. What are your thoughts on the standard of care that these patients are likely going to have in a Phase III, just given how sort of treatment has evolved, and your thoughts on the relative reduction and how that may change? And then secondly, you talk about having the means to fund the rest of your program. But I guess you hit on another side of COVID is the sort of manufacturing scaleup in a supply perspective? So does this at all impact your thinking of the commencement of VERU-111 Phase III in prostate this quarter?
Excellent questions. So to answer your first about my thoughts on standard of care, as you know, standard of care has evolved, and I wouldn't say rapidly, but it has evolved. And so what we do know is that hydrochloroquine is gone. We just read yesterday that the convalescent plasma has taken on less of a role. And so its Emergency Use Authorization has been restricted. And remdesivir, as we know, has shown activity in getting people home from the hospital, but not necessarily in the critical care situation. Dexamethasone showed a reduction in deaths of about 4 or 5 absolute percentage points. And the antibody therapies are still scratching their heads. So there are options and the options are there. But interestingly, there's still a paucity in the amount of effective drugs that are available now in the critical care setting, which is what we're focused on right now, which is patients that are hospitalized with severe WHO symptom index. So I think standard of care is going to be about the same. And I just don't see anything on the horizon that has come in dramatically. And as you know, from our study that in the background of standard of care, we were still able, even on top of dexamethasone, still able to show these improvements. And so we're excited that there must be something different. We did see in the preclinical models that in some instances, we had more activity in dexamethasone. Maybe that's playing out, but I don't want to overstate the data. With that said, in terms of our means, I'm telling you, I mean, I -- we had downplayed this because we -- I'd be honest with you, I was concerned with standard of care that we would lose a signal in a small study. And we did not, the opposite happened. In spite of standard of care, we have strong signals. And so that really makes us feel pretty good that we hit. But the challenge for us is now in the face of -- I can tell you, I remember getting questions from everybody saying, "Well, Mitch, COVID-19 is going to be gone in a few months. You're just starting this trial." And here we are now, 8 months later, and we're looking at each other and the death rates are the same, if not, has gone up. And they're talking about it being around for a few years like the Spanish flu. And I don't know, I pick up a newspaper and see people burying people all over the world. And in the U.S., rates are going down, but deaths are going up. It just doesn't feel like we've got a handle on it. And I think it's ultimately part of handle -- part of the armamentarium is going to have to be effective drugs that will help a -- with vaccines and antibody drugs and things of that sort and VERU-111 may be that drug. If it is, then we have a moral obligation as a company to push ahead. And we're very fortunate, and I welcome everybody to listen to our earnings call, which will be Wednesday morning at 8:00 a.m., where you'll see why we're excited about our year, because we're on fiscal year 2021, and why we believe that we'll have the sources to carry on ourselves. Now with that said, the one area we do not have resources for is the manufacturing scaleup. The scaleup doesn't cost money. What costs money is the additional drug. So the additional drug that would be required to all of a sudden have this drug, if approved by the FDA, available, when we do the back-of-the-envelope analysis, for a year, based on -- right now, it's 85,000 to 100,000 hospitalizations a day -- excuse me, a week. And most of those hospitalizations, interestingly, have changed dramatically to patients who are at high risk. So the lower-risk patients are staying home and the high-risk patients are being hospitalized. And when you start looking at the math of a 21-day, because we would be administered as once-a-day for 21 days, so you need to have 21 doses available to every patient. It doesn't take much to get you to about 37 million doses that will be required for the year. 37 million, if anything, is a lot of money. And so we are going to BARDA and others to help us fund that. And the idea would be that, that funding could be -- that scaleup and the manufacturing could begin in stockpile as the Phase III study is ongoing. So that in the event that Phase III confirms the Phase II findings and we do -- and we get an Emergency Use Authorization at the very best, then we'll be ready. So that's kind of how I would focus on it. But we do have the resources to get going and to -- we've got drug. And to answer your last part of your question, no, it will not affect VERU-111 in prostate. We're still on track to start the Phase III this quarter. We have drug supply for that, a different drug dosed for that study. That dose is different. So therefore, we already have that made to be -- and by the way, all of these doses are to-be-marketed doses. So we don't have to do any more work. It's a to-be-marketed drug. And so it's ready to go and we're going. And same thing for triple-negative breast. And that we would think in the second half of the year. And then before -- any other questions, Brandon? Or does that answer it?
It does very much. And maybe I can sneak in one more for me and then I'll hop back in the queue. At this stage, any hypothesis about how VERU-111 may perform against the U.K. and South African strain or just a bit too early to tell?
No, I can tell you. And the reason I can tell you is we're clearly a broad-spectrum antiviral. The way the agent works is it disrupts the microtubules. Think of microtubules as the highway system of the cell. And so when the virus gets in, it doesn't just get in and float around to get to the nucleus to make more virus. It has to be transported there on a highway. And that highway is the microtubules. Interestingly, once the virus gets into the nucleus and it gets replicated, it makes more viruses. It has to get the transported back to the surface of the cell, so it can be dumped back out to infect other cells. Well, that takes the highway, that microtubule trafficking system. And VERU-111 disrupts that microtubule system. So VERU-111 doesn't care if you're a green car or a red car or a truck or a school bus. It doesn't care. The highway gets disrupted. So we believe that this broad-spectrum antiviral approach will be blind to the -- whether it's a mutant strain or not, that is the highway they need to infect cells. And so we have "broader specificity" than, for example, an antibody or a vaccine that's for a very specific epitope. I'm going to answer -- there's a question that came up before the operator goes to the next question. And that was somebody wanted to know for the primary endpoint, if you reported it as treatment success, which is the flip side of the coin, then we would have had an 81% increase in treatment success in the primary endpoint with the placebo with 70% treatment success and the treatment was 94.4% treatment success. So the treatment arm, again 94.4% treatment success, same p-value of 0.05.
Our next question today comes from Kumar Raja with Brookline Capital Markets.
Congratulations on the data. With regards to the number of doses, did all the patients received 21 doses? And what do you guys know in terms of the patients who we did not receive all these doses? What time point do you think [indiscernible]? And also what are your thoughts on -- okay, I'll wait.
No, give me a second question. Go ahead. My thoughts on?
Yes. Sure. So also your thoughts on potential to prevent severe disease or hospitalization, how do you guys think about that?
Great question. So to answer your first question about -- I think the question you're asking is if we see some kind of relationship between the amount of dose that the patient got and the outcome. Is that what you're saying? Because the treatment dose was 21 days and day 29 was selected because the FDA -- if you go back and look at all the other clinical protocols, whether the IIIs or IIs, day 29 is when the FDA wants you to look at outcome for efficacy and 60 days is what they want you to look for outcomes for safety. And so these patients got up to 21 days of dosing. And that's the same model. And again, we didn't know who was on placebo treatment, that would be the same model going forward. As it relates to your question on prevention, prevention is really related to safety. And so because we have a drug that was being developed in a cancer population, it made sense for us to understand our safety better and go into a sicker population, which are hospitalized patients that are severe COVID-19, the risk for ARDS. And in that setting, we did not see any treatment-related adverse events, meaning that when you looked at the -- all the adverse events, serious and others, that took place that were ascribed to the study drug, remember, the investigator didn't know whether the drug was placebo or treatment, there was no difference, except, I would argue, in the respiratory side effects that it was higher in the placebo side, which gives us more comfort that the respiratory benefits that we're seeing with the VERU-111. If the safety plays out, which it does -- and as you know, in our cancer programs in prostate now in 80 men, safety looks pretty good. And we're using really high doses. And we're treating -- some men have been treated every day with high doses for 2 years. It feels that the safety profile is such that we could in the future -- I would wait and get the Phase III done and show confirmatory and the whole bit, but we could go earlier. And you have to understand we're not a complicated product. So this is not like an IV infusion. It's not cold storage, where you need to take convalescent plasma or antibody drugs and cool them down and store them and get them from point A to point B cooled. This is a just pill. So this pill will have a lot of portability and distribution advantages that will be critical for what we're facing now for a pandemic. So if I can dream for a moment, and the Phase III data confirms the Phase II data, then this is going to be a real -- this is going to be a real new option for patients -- I mean, for patients' and for physicians' armamentarium against the disease, which would be vaccinations, passive immune drugs, antibody drugs that maybe are acting in the same way, meaning that they're going after -- for patients that don't have antibodies, it helps them, and dexamethasone, which is sort of the base of what people use in the ICU and then followed by VERU-111. And -- but I think the next logical step after that is to see if we can play a role in the disease earlier.
And our next question today comes from Yi Chen with H.C. Wainwright.
So my first question was is -- hello?
Yes, I hear you. [Technical Difficulty]
And excuse me, everyone, this is the operator. It looks like we're having some problems with Mr. Chen's line. So we're going to go the next question...
Well, I think he sent an e-mail. Is that his e-mail? So his e-mail, are patients to be enrolled in the Phase III -- I'm going to read his e-mail. And so Yi, hopefully, this will answer your question. Are patients to be enrolled in a Phase III clinical trial hospitalized but not on mechanical ventilation? And the answer is they're hospitalized and not on mechanical ventilation. Or they can be? They can be. So according to Gary Barnette, who heads this up, he says they're hospitalized and they can be enrolled with on mechanical ventilation. And we did have that happen in the Phase II, to be very clear. So the Phase II did include patients that potentially could have gotten enrolled in that setting. And then the next question he has is with the U.S. COVID-19 trends continue to improve, potential new vaccines, do you think there will be a delay in enrollment? This is the same kind of question I got 8 months ago. And my knee-jerk reaction was that, well, we've got COVID-21, we've got COVID-24 or whatever. I don't know. I mean I would tell you that the vaccines, the rollout is quite slow. You've got 30% or higher of the population that won't take it. You've got mutant strains that we're already seeing that the vaccines are not covering. You've got antibody drugs that are going through epitopes that may not be covered in mutant strains. So there was a Wall Street Journal piece yesterday, I can't -- I apologize, I don't remember the author's name. But if you look back at the Spanish flu, I mean, this could be 3 years, this could be 4 years. And it may be the new normal to deal with this, just like the new normal we deal with influenza and all these other viruses that are just here to stay, HIV or whatever. And so I think that until we see something differently, I think we push ahead strong and fast. There has not been a letdown in deaths in the hospitals. There's been a reduction in a number of hospitalizations. But I think what's going to happen is you're going to see -- and not dramatic, by the way. I think what you're going to see is just an increase in -- or an enrichment of patients that come into the hospital with more severe disease. And furthermore, that's U.S. If you start looking outside the U.S., and I can't tell you how many times I see people burying their dead in South America, burying their dead in Africa, in other places of the world, we do not -- we don't have a handle on this. So if we can get the study started in April, and we can -- and get this thing enrolled, we believe it will be about 200 patients, but it has to be confirmed by FDA and we'll meet with them. But if it is about 200 patients, then I think with still 100,000 patients being hospitalized, we better do our best to get this thing filled and get an answer. Once we have an answer, then the question is going to be what are the doses on hand that we're going to need? And more importantly, how do we deal with -- at the end of the day, we're -- our global neighbors are in trouble, too. So I think it looks different today than it did 8 months ago, when there were 550 clinical trials out there and most of those have not panned out. And here we are with smoke has cleared and we have something that looks promising and we have a moral obligation to go forward with it.
And our next question today comes from Leland Gershell with Oppenheimer.
A clarification or two on the trial design. So were patients put on therapy within a certain time frame after being hospitalized? Was that kind of a requirement? Or could they be started on 111 at any point in time following their hospitalization? And I had a follow-up.
I'm going to let Dr. Barnette answer it.
Yes. So the protocol was designed that the patients could have symptoms, meaning severe symptoms up to 8 days -- for up to 8 days. They can come into the hospital, they could be randomized immediately or they could wait for a short period of time and then come in at that point if they so desire.
Okay. Got you. And then a question that's more mechanistic. So Mitch, you had mentioned kind of sort of viral transport along the microtubules as being a possible way that the drug works. But also wanted to ask about the thesis of 111 per as interfering with the mobility of inflammatory cells, given inflammation is -- yes, go ahead.
No. Go ahead.
No, as I say, with that potentially operative mechanism, the use of 111 in other inflammatory disorders that may not be [indiscernible]
Yes. So the other way to think of it is how is it an anti-inflammatory? And I don't think it's an anti-inflammatory because it's "decreasing" cells. I think it's an anti-inflammatory for the exact same reason that it's preventing viruses from replicating and coming in and coming out. And that is that the vacuoles that contain all the cytokines in any of the immune cells have to be transported in the cell through microtubule trafficking. And those vacuoles that are filled with cytokines make their way to the surface of the cell and they have to be dumped out. So I think part of the mechanism that we have, which goes back to the parent drug, which was colchicine because we're a colchicine binding agent. And so part of the reason why we're seeing the safety, all along we wanted a safer colchicine, but more potent colchicine because we've seen that clearly in vitro in the cancer studies as well. So I think what we're seeing is anti-inflammatory reducing. By disrupting the microtubules, you're not seeing the release. We showed them in our preclinical studies that we released a few months ago showing that we decrease monocytes that were treated with LPS. LPS induces almost a toxic-like reaction from these immune cells and prevented them from releasing the interleukins and the tumor necrosis factor and some of the other cytokines that are involved with the cytokine storm. So we had preclinical evidence, but I think the same mechanism. And the second -- that was for that. And as it relates to the second question, yes, I mean, we've always thought -- we thought the first place to go is cancer. Because at this point now, there has never been an approved oral agent that targets the colchicine binding site of microtubules. And what we're finding out, it has clearly a different side effect profile and potential efficacy profile. And we've seen that in our patients. And so I think it's important for us to continue down that target. But now that we've been kind of pulled into COVID-19 because of the pandemic, this is very, very consistent with the anti-inflammatory effects that you would expect with the compound that we developed. So yes, I mean, I think in the future, this opens up the potential for going after -- even if you start out with acute gout and familial Mediterranean fever, which is, in my opinion, low-hanging fruit to have a drug that doesn't have potential for drug-drug interactions and it's not a substitute for [indiscernible], which means that the patient can take drugs, drink, grapefruit juice and not move the drug into a toxic level, could have some clinical utility.
All right. Great. And then actually, my last question, if I may, actually you provided the segue into that with colchicine and gout. So there have been studies with colchicine in patients with COVID-19. We have seen some reports of the data. They don't perhaps look as strong as yours. And we just want see if you could maybe compare and contrast the data we've seen out of these colchicine studies.
Yes, yes, yes. You can compare study. Yes, you can do study. We didn't do head-to-head. But I can tell you, we've done head-to-head in the cancer population. And what we see in -- and I think this may be published or at least it's an abstract. People kept saying, "Why not just use colchicine for cancer?" And the answer is it just doesn't work. Because by the time you get to the levels of colchicine that's required to knock out the cancer, it has such toxic effects, such off-target toxic effects. So yes, it targets the same thing. But no, the doses they're using are just clearly too low. And with our compound, we're able to take advantage of the potency part, which is to disrupt microtubules and still have enough safety that you can push the dose. So I think it may be -- part of it is a dosing and part of it is a safety off-targeting effect. So just because something goes after a target, it doesn't mean it's going to be safe. I mean I could give you a great example. If you look at the CDK4/6 inhibitors, palbo is pretty safe and ribociclib is safe, except it has a QT problem. So why is it they go after the same target, but why is one have a QT problem and one doesn't? So this has to do with the fact that the drugs -- yes, it's the same target, but they have -- they're not identical agents, so they're going to have off-target effects. So I think we're very different. And I think potentially those studies may have under-dosed colchicine. And I would not recommending moving colchicine up because of the toxicity of colchicine. So we -- this may be -- the plausibility is there, the idea makes sense, but it may be the wrong agent.
And ladies and gentlemen, this concludes the question-and-answer session. I'd like to turn the conference back over to Dr. Steiner for his closing comments.
Thank you, operator. I want to thank everyone for joining us on today's call. We look forward to hosting and updating you on our company's progress this coming Wednesday at 8:00 a.m. Eastern. Thank you.
And thank you, sir. The digital replay of the conference will be available beginning at approximately noon Eastern Time today, February 8, by dialing 1 (877) 344-7529 in the U.S. and 1 (412) 317-0088 internationally. You will be prompted to enter the replay access code, which will be 10152256. Please record your name and company when joining. The conference has now concluded. Thank you for attending today's presentation, have a wonderful day.
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