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spk03: Good morning, ladies and gentlemen, and welcome to VeriWinx Investors Conference Call. All participants will be in listen-only mode. Should you need assistance, please sit down with a conference specialist or pressing the star key followed by zero. After this morning's discussion, there will be an opportunity to ask questions. Please note, this event is being recorded. I would now like to turn the conference over to Mr. Sam Fish, VeriWinx Executive Director, Investor Relations and Corporate Communications.
spk00: Please go ahead. 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 their actual results may differ significantly from those projected, suggested, and or included in any forward-looking statements. Risks that may cause actual results or development to differ materially are contained in our 10-Q and 10-K 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, VeriBank's Chairman, CEO, and President.
spk01: Good morning. With me on this morning's call are Dr. Gary Barnett, the Chief Scientific Officer, Michelle Greco, the CFO, CAO, Michael Purvis, the EVP General Counsel on Corporate Strategy, and Sam Fish, the Executive Director of Investor Relations and Corporate Communications. Thank you for joining our call. Viviro is a biopharmaceutical company focused on developing novel medicines for COVID-19 and other viral ARDS-related diseases and for oncology. The company has a commercial sexual health program called UREV which includes two FDA products, Intadfi, a new treatment for benign prostatic hyperplasia, and the FD2 condom, internal condom, for the dual protection against unplanned pregnancy and the transmission of sexually transmitted infections. The revenue from the sexual health program is being used to partially fund the clinical development of our late-stage therapeutic candidates, which aim to address multibillion-dollar premium market opportunities. This morning... We'll provide an update on our COVID-19 Subisibulin clinical program, the clinical development of oncology drug pipeline, and the commercialization of our products in the UREP program. We'll also provide financial highlights for our first quarter fiscal year 2023. First, I will update you on the status of Subisibulin, an investigational drug candidate for the treatment of hospitalized adult COVID-19 patients and high-risk ARDS, which is the lead indication for our infectious disease program. We reported positive results from the Phase 3 COVID-19 clinical trial, which is a double-blind, multi-center, multinational, randomized placebo-controlled study evaluating daily oral 9 mg doses of bisabolin for up to 21 days versus placebo in 204 hospitalized moderate to severe COVID-19 patients who are at high risk for ARDS and death. On April 8, 2022, the Independent Data Monitoring Committee conducted a planned interim efficacy analysis in the first 150 subjects randomized in the Phase III COVID-19 study. After reviewing the unblinded clinical data, the Independent Data Monitoring Committee unanimously recommended that the Phase III study be halted early due to clear clinical efficacy benefit. The Independent Data Monitoring Committee also remarked that no safety concerns were identified. In this interim analysis, subvisivulin treatment demonstrated statistically significant 24.9 percentage point absolute reduction, and a 55.2% relative reduction in all-cause mortality by day 60, the primary efficacy endpoint of the study, with a p-value equal to 0.0042. The efficacy was further supported by the consistency of the mortality benefit across subgroup analyses of the primary endpoint. Clinically meaningful reductions in deaths with subvisual treatment compared to placebo was observed regardless of the standard of care treatment received baseline WHO ordinal score, sex, age, baseline comorbidities, BMI, or geographic location. In the full final data set of 204 randomized patients, the all-CARS mortality benefit was similar to the positive clinical results observed in the interim efficacy analysis population, with subisobulin treatment resulting in a 51.6% relative reduction in deaths compared to placebo treatment, p-value 0.0046. Data from the key secondary efficacy endpoints demonstrated that sabizabulin treatment resulted in a significant reduction in days in the ICU, days on mechanical ventilation, days in the hospital compared with placebo. Sabizabulin also had an acceptable safety profile. Significantly fewer adverse and serious adverse events were reported with sabizabulin compared to placebo. There were also fewer treatment discontinuations due to adverse events in the sabizabulin group compared with placebo. The Phase III reported safety profile suggests that subvisivulin treatment may have resulted in fewer COVID-19-related morbidities, especially respiratory failure, pneumothorax, acute kidney injury, cardiac arrest, septic shock, and hypotension. Next, I will update you on the U.S. and international regulatory progress for subvisivulin for the treatment of COVID-19. On May 10, 2022, we had a pre-emergency use authorization meeting with FDA. In this meeting, FDA agreed that that no additional efficacy studies would be required to support an emergency use authorization or an NDA pending review. FDA also agreed that no additional safety data would be required to support an EUA, but the collection of safety data under the EUA would satisfy the safety requirement for an NDA. FDA confirmed these positions in writing in the meeting minutes which were sent to us after this meeting. Based on the FDA's feedback from this meeting, On June 6, 2022, we submitted a request for an EUA application to FDA. On November 9, 2022, the U.S. FDA's Pulmonary Allergy Drugs Advisory Committee met with the company to review its request for EUA of sabizobulin. Although the advisory committee voted 8 to 5 that the known or potential benefits of sabizobulin when used for the treatment of adult patients hospitalized with COVID-19 and high-risk ARDS do not outweigh known or potential risks to bisapulin, there was additional discussion by the advisory committee around possible clinical trial design aspects for a potential confirmatory Phase III clinical trial as a post-EUA authorization requirement. FDA is supposed to consider the input of the advisory committee as part of its review of the EUA, but FDA makes the final decision on the emergency use authorization application. We believe we meet the criteria for EUA issuance based on FDA guidance. One, COVID-19 is a serious or life-threatening disease or condition. Two, based on the totality of the scientific evidence available, it's reasonable to believe that subizobulin may be effective. Three, risk, benefit, and analysis, the known and potential benefits of subizobulin, which is the mortality benefit, outweigh the known and potential risks. There are no adequate, approved, and available alternatives to the candidate product for treating the disease or the condition. It's been three months since the FDA Advisory Committee meeting, and we have been in contact with FDA and they have communicated to us that they are still reviewing our requests for EUA. We, however, do not know when the FDA will act on our EUA. January 30th, 2023, the White House Office of Management and Budget announced that the Biden administration plans to terminate the COVID-19 national and public health emergencies on May 11th, 2023. The United States Department of Health and Human Services, also known as HHS, however, also had declared a national emergency, which is a separate one from the White House in 2020, and which is still in effect, and based on current information, is expected to remain in effect beyond May 11th. As HHS governs the FDA, the FDA, to avoid confusion, also announced on January 31st, 2023, that the May 11th termination would not impact FDA's ability to authorize new treatments for emergency use, that existing EUAs would remain in effect, and that it may continue to issue new EUAs when criteria for issuance are met. As for our regulatory progress outside the U.S., on July 27, 2022, we announced that the European Medicines Agency, the EMA, emergency task force had informed the company that it has initiated the review of cebizobulin for the treatment of hospitalized COVID-19 patients and high risk for acute respiratory distress syndrome. The review will assist the 31 EU member states who may consider allowing use of the medicine before a formal marketing authorization is granted. The review of sabizabulin is the first to be triggered under Article 18 of the new EU regulation that expanded the role of the EMA during public health emergencies in 2022. We have been in active communication with the Emergency Task Force as they complete the review of sabizabulin And once the emergency task force completes their review, they will submit their formal recommendation to the EMA's Committee for Medicinal Products for Human Use, also known as CHMP. And CHMP then reviews the recommendation and renders an opinion whether subisobulin qualifies for emergency use in Europe. If the EMA authorizes it for emergency use under Article 18, then the individual nations in the EU may authorize subisobulin for use. We've also completed our final rolling submission to the Access Consortium Nations, which is composed of the following regulatory agencies. UK's Medicine and Healthcare Products Regulatory Agency, also known as MHRA, Switzerland's Swiss Medic, Australia's Therapeutic Goods Administration, known as TGA, and the Access Consortium is a coalition of certain regulatory authorities with therapeutic products that work together to promote greater regulatory collaboration and alignment of regulatory requirements. This month, we expect to also complete our final rolling submission to Health Canada. In summary, we have submitted regulatory requests for emergency authorizations to the European Union, United Kingdom, Australia, Switzerland, and Canada. We're also in various stages of discussions with regulatory agencies in other countries to obtain emergency or expedited authorizations for Subisibulin, including South Korea, Israel, Egypt, New Zealand, and South Africa. Turning to our U.S. and international subisobulin commercialization preparation update, in anticipation for the potential commercialization of subisobulin, we have scaled up manufacturing processes and have enough commercial drug supply on hand to address the expected drug needs following a potential authorization in the U.S. and Europe, as well as other potential international authorizations and approvals. As an update for the commercialization of subisobulin in the U.S., we currently have in place an experienced team to commercialize subisobulin. We have also executed contracts with wholesalers for specialized hospital distribution services for Subisibulin. We believe we're ready to launch Subisibulin to hospitals across the United States if we're granted emergency use authorization soon. We also have established Bureau International to commercialize Subisibulin to the rest of the world. We are making great progress in the potential international commercialization of Subisibulin. In January of 2023, we had additional discussions with the Health Emergency Preparedness and Response Authority, also known as HERA, H-E-R-A, which is part of the European Commission. HERA is responsible for joint procurement framework contracts, which offers 36 participating countries the possibility to jointly procure medical drugs and countermeasures as an alternative or complement to procurement at the national level. Joint procurement framework contracts have been previously signed with Gilead, Hoffman LaRouge, GSK, and most recently in November of 2022 with Pfizer. The company is also making great progress in signing up international commercial partners to, assuming appropriate regulatory approvals, facilitate securing sub-isobulin government purchase orders for COVID-19, as well as ensuring seamless flow of sub-isobulin to their countries. So Mezion Pharma in South Korea, Valeo Pharma in Canada, have publicly announced partnerships with Viru. We also have signed commercial partnerships in China, Australia, New Zealand, and Egypt with highly regarded local partners. And although they have not publicly announced these transactions yet, they have been diligently working on the commercial opportunity for several months now. We have been engaged for some time in negotiating partnerships also with Germany, Italy, United Kingdom, Ireland, Spain, Switzerland, France, Israel, and Taiwan. We're also excited to expand the investigation of sabizabulin to other infectious disease indications based on the drug candidate's novel mechanism of action if we receive an emergency use authorization in the U.S. or other authorizations outside the U.S. that leads to substantial new revenue. As we have preclinical in vivo data that demonstrates that sabizabulin has activity against H1N1 variant of influenza A, also known as the swine flu, We plan to conduct a Phase III clinical study to evaluate subizobulin in hospitalized adult patients with influenza A who are at high risk for ARDS. Influenza A virus causes up to 52,000 deaths and 710,000 hospitalizations each year in the U.S. Similarly, if subizobulin is authorized and commercialized, we also plan to conduct a Phase III clinical study of subizobulin for the treatment of hospitalized adult patients with viral ARDS, which would include respiratory syncytial virus, which alone causes 14,000 deaths in 177,000 hospitalizations each year in the U.S. As we have outlined above, sibizabulin as a novel antiviral anti-inflammatory is positioned to potentially become a valuable treatment option for multiple infectious diseases that can lead to ARDS, a life-threatening lung condition that has a high mortality rate. I will now briefly discuss the progress of our oncology drug portfolio focused on advanced breast and prostate cancers. In advanced breast cancer, we have been actively enrolling two registration clinical trials. The R-Test Phase III clinical trial in approximately 210 patients to evaluate a novus arm monotherapy for the third-line treatment of AR-positive, ER-positive, HER2-negative metastatic breast cancer. In number two, the second trial, Phase III, is the Enabler Phase III clinical study in approximately 186 patients to evaluate the efficacy and safety of Inovus arm and the Bemacyclib combination therapy versus an alternative estrogen-blocking agent in subjects with AR-positive, ER-positive, HER2-negative metastatic breast cancer who have failed first-line therapy with Pablociclib, which is a CDK4-6 inhibitor, plus an estrogen-blocking agent. We have a clinical trial collaboration excuse me, clinical trial collaboration and supply agreement with Lilly for the Enabler 2 Phase 3 clinical study. Under the terms of the non-exclusive clinical trial collaboration and supply agreement, Vera is responsible for conducting the clinical trial, while Lilly is supplying Abemacyclib for the study. Vera remains full exclusive global rights to Novozyme. The Phase 3 Enabler 2 study has two stages. Stage 1 is a pharmacokinetics and safety assessment of the combination of anobisarm and abemacyclob to make sure there are no drug-to-drug interactions resulting in changes in blood levels of either drug, and that there are no added safety concerns before going to stage two. Stage two is the actual phase three study. We have completed phase one, which consists of three patients, and there are no changes in the expected blood levels for anobisarm or abemacyclob when given in combination, and the combination is well tolerated. Interestingly, Evidence of objective anti-tumor activity was observed in target lesions at the eight-week CT scan in all three patients as follows. The first patient had a 50% reduction of an adrenal metastasis. The second patient had a 21% reduction of a liver metastasis. And the third patient had a 71% reduction of a liver metastasis. Full trial, the stage two portion of the trial, as I mentioned, is enrolling. In advanced prostate cancer, we have been actively enrolling a Phase III and Phase II clinical trial. We have been actively enrolling an open-label, randomized, multicenter Phase III veracity clinical trial evaluating subizobulin 32 mg versus an alternative antigen-receptor-targeted agent for the treatment of chemotherapy in naive men with metastatic castration-resistant prostate cancer who had tumor progression after previously receiving at least one antigen-receptor-targeted agent. The primary endpoint is radiographic progression-free survival. Enrollment for the Phase III veracity clinical study is ongoing. A second clinical study in prostate cancer is evaluating VIR-100, a GnRH antagonist three-month depo formulation, in a Phase II dose-finding clinical study for the treatment of hormone-sensitive advanced prostate cancer. As we will discuss later, we're currently evaluating our clinical trial priorities and spending as we await decisions on by FDA, European regulatory and other bodies on for COVID-19 and we're working to conserve cash. When decisions on reprioritizations or suspension of any trials or termination of any trials or programs or any modifications to R&D efforts have been finalized, we will communicate them to you. Viru has a commercial sexual health program called UREV, which includes two FDA-approved products, FC2 and Entadfi. We have built the infrastructure to allow for broad market access to FC2 across the U.S. As a result, FC2 is now available through multiple sales channels. We have partnered with telemedicine platform sexual health companies to bring FC2 products to patients in a cost-effective and highly efficient, highly convenient manner. Fortunately, the telemedicine sector and global public sector ordering have underperformed across the board this past calendar year. It does appear, however, that market conditions are improving. And we are seeing revenues increase in Q2 fiscal year 2023. We also have Intadvi, an FDA-approved new treatment for benign prostatic hyperplasia. It's currently prescribed BPH medicines may lead to the most common side effects of sexual adverse events. Intadvi has demonstrated its faster and more effective treatment option for BPH than finasteride alone and does not cause sexual side effects. We've launched this product during the fourth fiscal quarter of 2022. with a focus on payer agreements as well as executing distribution, wholesaler, and Medicare contracts. In addition to traditional distribution, we're also seeking distribution through GoodRx and telemedicine partners. I will now turn the call over to Michelle Greco, CFO and CAO, to discuss the financial highlights. Michelle?
spk02: Thank you, Dr. Steiner. As Dr. Steiner indicated, we continue to have a lot of ongoing activity at Bureau. Let's review the first quarter results. Overall net revenues were $2.5 million compared to $14.1 million in the prior year quarter. The U.S. prescription business net revenues decreased to $163,000 from $11.6 million in the prior year period. The reduction is due to some business challenges experienced by our telemedicine customers in recent quarters, which result in a slowdown in orders. Net revenue for the global public health sector business was $2.3 million compared to $2.6 million in the prior year period. Overall, gross profit was $700,000, or 28% of net revenues, compared to $11.8 million, or 84% of net revenues, in the prior year period. The decrease in gross profit and gross margin is driven primarily by decreased sales in a U.S. FC2 prescription business. Operating expenses for the quarter increased to $36.3 million compared to the prior year quarter of $16.8 million. The increase of $19.5 million is primarily due to research and development costs, which increased $8.7 million to $18.7 million from $10.1 million in the prior year period, and the increase in selling general and administrative expenses of $10.8 million from $6.7 million in the prior year period to $17.5 million in the current period. The increase in research and development costs is due to the increased costs associated with the multiple in-process research and development projects, mainly for the phase three sub-disabulin COVID-19 registration trial and manufacturing costs of $8 million for pre-launch inventory and increased personnel costs resulting from increased headcount and an increase in the fair value of share-based compensation. The increase in selling general administrative expenses is primarily due to commercialization costs of $8.4 million related to preparations for the potential launch of sub-disability for COVID-19 incurred in the first quarter of fiscal 2023 and an increase in share-based compensation costs resulting from increased headcount and an increase in the fair value of share-based compensation. The operating loss for the quarter was $35.6 million. compared to $5 million in the prior year quarter. The change of $30.6 million is due to the increase in research and development costs and selling general administrative expenses during the current period and the reduction in the net revenues and gross profit during the period. Non-operating expenses were $1.3 million for the current year quarter and for the prior year quarter, which primarily consisted of interest expense and change in the fair value of the derivative liabilities related to the synthetic royalty financing. For the quarter, we recorded a tax benefit of $68,000 compared to a tax expense of $115,000 in the prior year quarter. The bottom line result for the quarter was a net loss of $36.8 million or 46 cents per diluted common share compared to $6.4 million or 8 cents per diluted common share in the prior year quarter. The company has net operating loss carry forwards for US federal tax purposes at $112.5 million with $29.7 million expiring in years through 2042 and $82.8 million which be carried forward indefinitely. And the UK company net operating loss carry forwards of $63.1 million do not expire. Now looking at the balance sheet. As of December 31st, 2022, our cash balance was $46.9 million And our accounts receivable balance was $3.9 million. Our net working capital was $32.9 million at December 31st, 2022, compared to $63.3 million at September 30th, 2022. During the quarter ended December 31st, 2022, we used cash of $34.5 million for operating activities. The expected future revenues from Subisibulin for COVID-19, if authorized, and the continued revenue from the sales of FC2 in the U.S. prescription channel and the global public sector added to our current cash balance should continue to be the primary sources of funds we use for commercial activities and to invest in our promising pharmaceutical clinical development programs as we continue to focus on developing novel medicines for COVID-19 and other viral and ARDS-related diseases, and for the management of breast and prostate cancers. If the bisabolin is not authorized in the U.S. or elsewhere in this current calendar, then we have to seek additional sources of funding if we are unable to reduce our spending to a sufficient degree. Now I'd like to turn the call back to Dr. Steiner.
spk01: Thank you, Michelle. In January of 2023, the Los Angeles Times published an article by Doyle McManus entitled, Biden said the pandemic is over, but the pandemic won't cooperate. McManus further states, but the pandemic isn't over, we're just pretending it is. So last month, WHO, so the World Health Organization, has concluded that COVID-19 remains a public health emergency of international concern. This declaration underscores that that the COVID-19 virus and its resulting impacts warrant long-term public health action as we enter the fourth year of this COVID-19 pandemic. According to the CDC in the United States, there have been 1,106,824 deaths related to COVID. Currently, the weekly average for new deaths is 3,452 people, approximately 500 deaths per day. The weekly average for new primary COVID-19 hospitalizations It's 24,213 patients with 3,459 new admissions per day. COVID-19 is the third leading cause of death in the United States behind heart disease and cancer. COVID-19 is a serious disease. An effective and safe oral therapeutic to treat hospitalized moderate to severe COVID-19 patients who are at high risk for ARDS that prevents death is desperately needed. We strongly believe that subizobulin and oral therapy with dual antiviral and anti-inflammatory properties can serve as this new treatment modality that addresses and overcomes the threat of death that hospitalized moderate to severe COVID-19 patients continue to face. We have pivoted our company to establish an infectious disease program with subizobulin as the lead drug candidate. In a phase three study, subizobulin demonstrated clear clinical benefit in hospitalized moderate to severe COVID-19 patients high risk for ARDS and death. Because of this mechanism of action, it has the potential to treat other virally induced ARDS. ARDS remains a worldwide unmet serious medical need. In addition, we continue to advance our core late clinical stage breast cancer and prostate cancer programs. As for our cash burn and position, we have been able to pause some of our spending as we are now in a waiting mode while multiple regulatory agencies across the world review subisobulin as a potential option for emergency use. Over the past few months, we have been proactively preparing multiple work streams for commercialization in the background. For instance, manufacturing drug supply and scale-up activities are in place. Our U.S. and international commercialization infrastructure is ready to provide access to subisobulin for hospitalized COVID-19 patients at high risk for ARDS and death if authorized. We're working to prioritize our clinical development portfolio. We have begun to slow our clinical development spend, and we continue to evaluate the appropriate timing and spending of our planned clinical studies. Furthermore, we have a near-term strategy to drive FC2 sales as follows. We will seek to initiate additional and strengthen current telemedicine and internet pharmacy service partnerships. We have created and launched our own dedicated direct-to-patient telemedicine and internet pharmacy services portal. We're pleased with the telemedicine portal as a growing source of revenue. Making this strategic move has allowed us to both supply FC2 to other telemedicine providers and to have our own dedicated FC2 telemedicine portal that we can control and grow. The website can be reached at FC2condoms.com. We expect to continue to increase U.S. public sector sales through our new agreements with the New York Department of Health and the new distribution partnerships with Global Protection as well as AFAXIS. And we're also starting to see, again, an increase in global public health sector orders. As I mentioned, we're seeing improvements in FC2 revenues in our second quarter fiscal year 2023, and TAFI may also generate revenue. And, otherwise, we expect to also have substantial near-term revenue from Subisabulin 9 milligrams for hospitalized COVID-19 patients at risk for ARDS. With that, I'll now open the call to questions. Operator?
spk03: Yes, thank you. Ladies and gentlemen, at this time, we will begin the question and answer session. To ask a question, you may press star then 1 on your telephone keypad. If you are using a speakerphone, we ask that you please pick up your handset before pressing the keys to ensure the best sound quality. To withdraw your question, please press star then 2. Please enter 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 then 1 to rejoin the question queue. We will pause momentarily to assemble our roster. And the first question comes from Random Folks with Kendra Fitzgerald.
spk04: Hi, thanks for taking my questions. So maybe the first one from me, what gives you confidence that HHS won't follow the White House in winding down the COVID emergency? Have they been public about anything? Is there any precedent? Obviously, it's a tough one there. And then secondly, maybe just on the cash situation, Can you just elaborate when you've paused spending? Was this post-quarter end or during the quarter? And then any color on the magnitude of the spend you've been able to reduce and maybe just the urgency to either, you know, pause some of the clinical trials or shore up the capital situation. Thank you.
spk01: All right, thank you. So make sure I understand. Your first question is around HHS, correct?
spk04: Correct, yes.
spk01: Yeah. So HHS, as I mentioned in my remarks, they're a separate group, and they govern the FDA, and they have their own – and they declare their own declaration of emergency. And so based on that, the FDA came out the same day the Biden administration made the comment they're going to stop the national and public health, which more has to do with policy and payments and that kind of stuff. in May 11, 2023. The FDA stated that in no way are they going to not be able to continue to issue new EUAs, and furthermore, EUAs that remain in effect until HHS decides otherwise. So everything I've seen at this point, if you go back, it's called 524 is the name of the public health declaration, and they have very, very specific times that, for example, if HHS decides that they want to pull the declaration, then Medicare and Medicaid and some of these other things will continue until the end of that calendar year. Also, interestingly, the omnibus bill that was passed also contains provisions to help transition from emergency use national declaration by the government to non-emergency. And so, for example, for COVID drugs, and they mentioned specifically Part D, that they can go until the end of 2024 and actually be paid for. And so even though May 11th is the date. So there are transition provisions to not lose anything that we've done that has been helpful and not go back into chaos. As it relates to your second question, so we did it. Our biggest spend was, as you would imagine, in the first few months after we heard about, you know, go ahead and submit your EUA. And as you know, when we met with the FDA, we submitted the EUA very, very quickly and And then we went on, you know, the wait. But we knew that we could hear it any time. So it means that even back in the summer, we were increasing our spend to put the U.S. commercial team in place and to put a commercial team, a small commercial team in Europe, and more importantly, get ready for commercialization of our product, which is the manufacturing piece of it, which means that we had to scale up so we can provide commercial drug, you know, as soon as the FDA told us, you know, you're authorized. If you're upset, you're authorized. We hear from any of those, we're ready to go. So the spend happened then. Once the spend was done, then we're basically in a holding pattern. And as you've seen, we've had a couple of planned clinical trials done. that we just have not initiated. There's two in breast cancer, for example, and we're just holding on because we've got to hold, you know, cash is, we want to make sure we can hold on to the cash so that we can understand at the time we hear an authorization or not that, you know, we know what our situation is. If we've got revenue coming in from subisobulin anywhere in the world, that's going to be significant. then that will help, you know, help us judge, you know, what we can do going forward. Priorities, for example, is that, you know, as you heard from the ADCOM, you know, one of the discussions was around the agency being interested in a condition for EUA would be that you have to do a phase three confirmatory study. So, you know, we've been, again, proactive in putting together the phase three study and submitting it to the FDA. But in terms of the number and the scope and all that stuff, we just don't know at this point until we have full agreement. So there's a lot of unknowns, but our focus is gonna be on doing what we need to do to take a valuable drug like subisobulin and get it to patients, and then to focus on oncology programs that will get us to the finish line sooner. and then to focus on driving revenue in our base business. Michelle, do you want to add anything to that?
spk02: I would just add that, you know, as Mitch indicated, we needed to ramp up. I mentioned during my comments, you know, we spent $8 million during that quarter to get enough drug in place. And as we've been working on our prioritization and pushing back on cash, you know, that started, we believed we were going to be hearing soon. So, you know, we started talking about that, making lists, prioritizing things toward the end of our quarter and now into this quarter here. So, you know, a lot of the spend takes time for it to come through. and materialize, but we're actively working on this.
spk03: Okay, thank you. Thank you. And the next question comes from Leland Gershwell with Oppenheimer.
spk05: Good morning, Mitch. Thank you for taking my questions. I just wanted to ask, as you control the spend as we await the potential EUA with respect to spend on the enrollment in the oncology trials. Are you kind of pulling back there? Is that enrollment now expected to take a bit longer? If you could just kind of let us know what the timelines may be for updates on oncology.
spk01: Yeah, so the answer to that is that as soon as we have a better understanding of what's coming in and what's coming out, and we're evaluating, as I said, actively evaluating. I mean, we did not expect to be sitting here seven to eight months later and not hearing from the FDA. Now, there is precedent. There's a company called Sobe Pharmaceuticals that submitted their EUA to the FDA back in January of 2022, and it took them 11 months to It was not until November of 2022 that they heard that they had the EUA. So, you know, we're completely at the mercy of the regulatory bodies to make a decision. And so what we have done now that we've entered this phase where we're still waiting and they're still reviewing that, and you can see we still have, you know, sufficient cash, but we want to make sure the cash lasts. And as you know, because we have cash coming in, and as I mentioned, our second quarter fiscal year, second quarter numbers are starting to move towards where we would expect them to be after having a little bit of headwinds over the last three quarters. Then we've got our own money coming in, too. And as you know, we've done very well matching our expenses with what we bring in. But we just have to spend a little bit more time, and then we'll roll out what we're thinking.
spk05: Great. Thank you.
spk03: Thank you. And once again, please press star, then 1 if you would like to ask a question. And the next question comes from Yi Chen with H.E. Wainwright.
spk06: Thank you for taking my questions. So without waiting for FDA response, can the company advance susceptibility into clinical trial for hospitalized patients with ARDS but excluding COVID-19 patients?
spk01: It's a very good question. If we do that, then that would have to, so far our discussions have been under the EUA. And then if we did that, that would go under an NDA. And technically it doesn't matter, right? Because you have to do a study before you can get into, for example, ARDS related to influenza and that kind of stuff. And so, I mean, you touch on a very important point. I mean, the thing that we cannot lose sight of is that we have an agent that even after all of these COVID drugs have been tried over the last three years, and whether they're new drugs, whether the drugs have been repurposed, whether, you know, whether they're biologics. At the end of the day, here we are now in the fourth year of the pandemic, and there's not much we can say. I mean, in fact, we have fewer drugs today than we had when we started because all the monoclonal antibody drugs have been pulled because they don't have activity against the current strain. And so, and the best we can do is dexamethasone at 2.8%. and baricitinib and tocilizumab, you know, again, they're marginal. And that's what we have. In comes sabizabulin, and sabizabulin has a completely different profile and has a different absolute and relative risk reduction in the sickest patients. And we also know that the mechanism by which it happens is a similar mechanism that you see with influenza, RSV, And many of the viruses that use microtubules to get in and out of the cell and also set off this cytokine storm that's responsible for ARDS. And right now we don't have great ARDS treatments. So in some ways, the reason we pivoted to ARDS is because it's such an unmet need. People are still dying. When people die from flu and they die from RSV and are dying from COVID-19, They're dying at the end from multi-organ failure and ARDS. And we could make a big difference. So your point is well taken. That is that the company should be focused on the long term, which is, you know, we'll see what happens with the emergency. But more importantly is, you know, out of the ashes of COVID comes a drug that, you know, came from nowhere basically because we were developing it for oncology. Right. So, yes, I think we do have a responsibility, just like I said in my earnings calls before, we're duty-bound to keep moving with sabizabulin, and it turned out, it played out to be a highly significant clinically meaningful drug, and it deserves to go into other ARDS. So what we need to do now is to pause. We need to get past some of these regulatory decisions and you know, you have to believe they have to come soon. But again, it's still to be waited 11 months, but I'm not, I have no information to say that I know exactly when. And, you know, and, but once we, once we get clarity, then the assets are assets. It's an asset that's going to give, you know, resources now to, you know, potentially multiple regulatory bodies saying yes, but it's also an asset that, that, if it doesn't qualify, quote, for emergency use, has well established itself as an asset that should be continued to go into the big unmet need of ARDS and people at high risk for ARDS and death. So, yes, influenza, you know, it's definitely one of the, as I mentioned in my comments, it's definitely one of the studies because, you know, we're still stuck with a shot once a year. It still affects the elderly. We still have to modify it. And there's still, you know, the death rate has been, depending on the year, because it's seasonal, you know, can be up to 60,000 people a year dying. And, you know, as I mentioned, over half a million hospitalizations. And most of the ARDS that's virally induced, they don't even check and see what virus it is most of the time. And so it's just a big area to go into. So the wake-up call for VIRU is that we have a real asset that And we're going to do everything in our power to get it out there.
spk06: My next question is, do you expect the FC2 sales to return to the level seen in the fiscal first and second quarter of 2022? And if so, how soon do you expect to return to that level?
spk01: It's a good question. I'll have Michelle answer that. Michelle?
spk02: For this quarter, we're starting to see our revenues coming back to that level that we saw in our quarters, first quarter and second quarter. As we've said before, our customers experienced some headwinds, as Mitch said. One of them had some issues. They had leadership changes. They had rebranding issues. They've rebranded again. And so, you know, it's taken them a while to fix some of their internal issues. Another customer had similar internal changes and some other problems that they've been sorting through and it's taken them a while. Sounds like they've worked all that out. You know, we stay in close contact with these customers. You know, we've pushed through some of the issues as we've developed our own portal. We've had some issues to tackle. We've been working on those and clearing those up so that we're starting to see an increase. You know, but our visibility right now is into the second quarter where things look good for the third and fourth quarter. But, you know, a lot of it is still dependent on how quick these other customers fix their issues. But all signs are pointing to it coming back to those levels.
spk06: Thank you. And my last question is just to confirm that Veru may terminate one of the ongoing breast cancer or prostate cancer trials due to budgeting priority. Is that correct?
spk01: Again, we have not made a decision, and we're looking at all options. Sometimes just one other extreme is just modifications or that kind of stuff. That's why I said it's just too early to say. But what I can tell you is that we want to decrease our spend. We want to prioritize the ones that are closest to the finish line. We want to ensure that we do everything we can to focus on that, because at the end of the day, what matters is data. So we've got to get the clinical data. And then we'll put a strategy in place to do that so that, you know, 2023 is sort of the year of enrollment and 2024 will be the year of data. And, you know, especially now that, you know, COVID-19, even though it's still around, it really impacted all clinical trials by all companies. because of all the rules that were put in place for COVID-19 management, the lockdowns and all that stuff. It affected everything. But now it's kind of moving the other way, even though the endemic numbers are pretty high. But we're definitely seeing that the world is starting to come back. And a lot of these sites were fatigued because they were pulled to help with the pandemic. And you've heard over and over about the craziness that's going there. But again, that's kind of passing as well. So let us spend the time to come up with a plan to understand how we want to position our oncology program. And what I can say for sure is bisbulin and infectious disease is here to stay. We have a real opportunity. Oncology... You know, we're committed to oncology. That's our other core asset. We have unique assets that need to make their way through. And as it relates to sexual health business, you know, it's always been a good source of revenue so that we can partially fund our clinical development and we're not beholden to the marketplace. And it feels good after seeing the Q2 numbers, fiscal year Q2 numbers. As Michelle said, it's kind of moving back to a position where significant revenue will come in. And so that we can, you know, we can move these trials forward and offset some of that cost with what we bring in ourselves.
spk06: Thank you. Okay.
spk03: Thank you. And ladies and gentlemen, this concludes our question and answer session. I would like to turn the conference call back over to Dr. Mitchell Steiner for any closing comments.
spk01: Thank you. Thank you. I appreciate everyone who joined us on today's call. And I look forward to updating all of you of our progress in the next investor call. Thank you again.
spk03: Thank you. This is your replay of the conference call will be available beginning approximately noon Eastern time today, February 9th, by dialing 1-877-344-7529 in the U.S. and 1-412-317-0088 internationally. You'll be prompted to enter the replay access code, which will be 91270 Please record your name and company when joining. The conference call has now concluded. Thank you for attending today's presentation. May now disconnect your lines.
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