Veru Exploring Strategic Alternatives for its Legacy Female Health Business
09 March 2021 - 12:30AM
Veru Inc. (NASDAQ: VERU), an oncology biopharmaceutical company
with a focus on developing novel medicines for the management of
prostate cancer and breast cancer, today announced that it has
engaged Morgan Stanley & Co. LLC as a financial
advisor to assist the Company and its management in pursuing
strategic alternatives regarding its legacy FC2 Female Condom® /
FC2 Internal Condom business (FHC Business).
“With the last two consecutive quarters for our FHC Business
having set all-time historical records in terms of net revenues and
gross profit, and with the last three-year compound annual growth
rates for the FHC Business’ net revenues and gross profit being 60%
and 83%, respectively, we think this is an ideal time to consider
strategic alternatives, including the possibility of monetizing
this business, as we recently did with our PREBOOST business,” said
Mitchell Steiner, M.D., Chairman, President and Chief Executive
Officer. “Furthermore, with the potential for five registration
clinical trials in calendar year 2021 -- four for oncology
indications and one for COVID-19 — it is clear that Veru has
transformed itself into a premium, late-stage, clinical
biopharmaceutical company, so the strategic fit with the FHC
Business is not as strong as it once was.”
Dr. Steiner added: “The FHC Business has been a great business
for Veru. Fiscal year 2020 was a record year in terms of net
revenues of $41 million and gross profit of $29 million, and Q1
fiscal year 2021 is already off on another record-setting pace. The
cash flow generated by the FHC Business has allowed Veru to
significantly advance its biopharmaceutical clinical programs. We
are open to exploring the right kind of strategic transaction for
the FHC Business with a view towards the best, long-term interests
of Veru shareholders, which may include continuing to operate the
FHC Business if we ultimately decide that is in our shareholders’
best interests.”
About the FHC BusinessThe FHC Business is
Veru’s legacy business. Its commercial product is the FC2 Female
Condom®/ FC2 Internal Condom (“FC2”), the only FDA approved female
condom that provides dual protection against unintended pregnancy
and the transmission of sexually transmitted infections. FC2 is
sold commercially and in the public health sector both in the U.S.
and globally. In the U.S., FC2 is available by prescription through
multiple third-party telemedicine and internet pharmacy providers
and retail pharmacies. In the global public health sector, the
Company markets FC2 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. Over 650
million FC2 units have been sold globally in 159 countries. The FHC
Business record growth has demonstrated a resiliency to the impact
of the COVID-19 pandemic through a proven telemedicine prescription
sales model. To learn more about the FC2 product, please visit
www.verupharma.com
"Safe Harbor" statement under the Private Securities
Litigation Reform Act of 1995: There can be no assurance
that any FHC Business strategic transaction will occur and there is
no definitive timetable for such. The Company does not intend
to make future announcements concerning this matter, unless or
until it enters into a definitive agreement, or its board of
directors determines to conclude the process, or it otherwise deems
that further disclosure is appropriate or required. The statements
in this release that are not historical facts 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 regarding strategic alternatives with
respect to, and the Company's ability to potentially monetize the
Company's legacy FHC Business, and the anticipated timeframe for
clinical studies and FDA submissions of the Company’s
biopharmaceutical drug candidates. Any forward-looking statements
in this release 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 subject to known
and unknown risks, uncertainties and assumptions. If any such risks
or uncertainties materialize or if any of the assumptions prove
incorrect, our actual results could differ materially from those
expressed or implied by such 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: the risk that the Company may not enter into a
definitive agreement or otherwise proceed with any transaction
regarding its FHC Business; costs, fees and expenses related to the
process of exploring strategic alternatives with respect to the FHC
Business and the risk that the process may divert management’s
attention from managing our business 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; potential delays in the timing of and results from clinical
trials and studies, including potential delays in the recruitment
of patients and their ability to effectively participate in such
trials and studies due to COVID-19, and the risk that such results
will not support marketing approval and commercialization;
potential delays in the timing of any submission to the FDA and
regulatory approval of products under development and the risk that
disruptions at the FDA caused by the COVID-19 pandemic may delay
the review of submissions or approvals for new drugs; the risk of a
delay or failure in reaching agreement with the FDA on the design
of a clinical trial or in obtaining authorization to commence a
clinical trial; preclinical or clinical results or early data from
clinical trials may not be replicated or continue to occur in
additional trials or may not otherwise support further development
in the specified product candidate or at all; our pursuit of a
COVID-19 treatment candidate is at an early stage and we may be
unable to develop a drug that successfully treats the virus in a
timely manner, if at all; risks related to our commitment of
financial resources and personnel to the development of a COVID-19
treatment which may cause delays in or otherwise negatively impact
our other development programs, despite uncertainties about the
longevity and extent of COVID-19 as a global health concern and the
possibility that as vaccines become widely distributed the need for
new COVID-19 treatment candidates may be reduced or eliminated;
government entities may take actions that directly or indirectly
have the effect of limiting opportunities for VERU-111 as a
COVID-19 treatment, including favoring other treatment alternatives
or imposing price controls on COVID-19 treatments; the risk that
the Company's products may not be commercially successful; risks
related to the impact of the COVID-19 pandemic on our business, the
nature and extent of which is highly uncertain and unpredictable;
risks relating to the ability of the Company to obtain sufficient
financing on acceptable terms when needed to fund development and
operations, including our ability to secure timely grant or other
funding to develop VERU-111 as a potential COVID-19 treatment;
product demand and market acceptance; competition in the Company's
markets and therapeutic areas and the risk of new or existing
competitors with greater resources and capabilities and new
competitive product approvals and/or introductions; the risk that
the Company will be affected by regulatory developments, including
a reclassification of products; price erosion, both from competing
products and increased government pricing pressures; manufacturing
and quality control problems; compliance and regulatory matters,
including costs and delays resulting from extensive governmental
regulation, and effects of healthcare insurance and regulation,
including reductions in reimbursement and coverage or
reclassification of products; some of the Company's products are in
development and the Company may fail to successfully commercialize
such products; risks related to intellectual property, including
the uncertainty of obtaining patents, the effectiveness of the
patents or other intellectual property protections and ability to
enforce them against third parties, the uncertainty regarding
patent coverages, the possibility of infringing a third party’s
patents or other intellectual property rights, and licensing risks;
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, restructuring or substantial delayed payments;
the risk that delays in orders or shipments under government
tenders or the Company’s U.S. prescription business could cause
significant quarter-to-quarter variations in the Company’s
operating results and adversely affect its net revenues and gross
profit; 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 or award; penalties and/or
debarment for failure to satisfy tender awards; the Company's
reliance on its international partners and on the level of spending
by country governments, global donors and other public health
organizations in the global public sector; risks related to
concentration of accounts receivable with our largest customers and
the collection of those receivables; 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 and interruptions,
including potential disruption of production at the Company’s and
third party manufacturing facilities and/or of the Company’s
ability to timely supply product due to labor unrest or strikes,
labor shortages, raw material shortages, physical damage to the
Company’s and third party facilities, COVID-19 (including the
impact of COVID-19 on suppliers of key raw materials), product
testing, transportation delays or regulatory actions; risks related
to the costs and other effects of litigation, including product
liability claims; 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 fiscal year ended
September 30, 2020 and subsequent quarterly reports on Form 10-Q.
These documents are available on the "SEC Filings" section of our
website at www.verupharma.com/investors.
Investor Contact:Sam
Fisch veruinvestor@verupharma.comDirector of Investor
Relations
Corporate Development Contact:Kevin Gilbert
kgilbert@verupharma.comEVP Corporate Development
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