Veru Inc.

Good morning, ladies and gentlemen, and welcome to Veru, Inc.' 's Investors Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After this morning's discussion, there will be an opportunity to ask questions. Please note that this event is being recorded. I would now like to turn the conference over to Mr. Sam Fish, Beru, Inc's Executive Director, Investor Relations and Corporate Communications. Please go ahead.

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 of product portfolio. Such forward-looking statements are subject to known and unknown risks and uncertainties, and our actual results may differ significantly from those projected, suggested, or included in any forward-looking statements. Risks that may cause actual results or developments that 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, VeritWings Chairman, CEO, and President.

Good morning. With me on this morning's call are Dr. Gary Barnett, Chief Scientific Officer, Michelle Greco, Chief Financial Officer and Chief Administrative Officer, Michael Purvis, General Counsel and Executive Vice President of Corporate Strategy, and Sam Fish, the Executive Director of Investor Relations and Corporate Communications. Thank you for joining our Q1 fiscal year 2025 earnings call. Vero has evolved into a late clinical stage biopharmaceutical company focused on developing medicines for the treatment of cardiometabolic and inflammatory diseases. Our drug development program consists of two clinical stage new chemical entities, inovasarm and sabizabulin. Inovasarm is an oral selective angio-receptor modulator, SARM, and it's being developed as a new generation of drugs that make GLP-1 receptor agonist weight reduction more tissue selective by preserving lean mass, which is muscle, and physical function and augmenting fat loss in older patients who are overweight or have obesity. Cibizobulin is an oral microtubulin disruptor, and it's being developed as a broad anti-inflammatory agent to reduce inflammation to slow the progression or promote the regression of atherosclerotic cardiovascular disease. On December 30, 2024, the company sold its FDA-approved commercial product, the FC2 female condom. Let's talk about our obesity program. Obesity, as defined by FDA, is a disease of excess body adiposity or fat. The medical objective is to treat obesity by weight reduction drug or drugs in combination should be to reduce excess body fat to improve the mobility and mortality associated with obesity. GLP-1 receptor agonists have been shown to produce significant weight loss in patients who are overweight and have obesity. Unfortunately, the weight loss is tissue non-selective. with a loss of both fat and lean mass, which contains muscle. Of the total weight loss, 20% to 50% of the total weight loss reported by patients was attributable to lean mass loss. According to Medicare, 22% of the U.S. population is greater than 60 years of age. That represents 70 million people. Based on the Centers for Disease Control and Prevention data, 41.5% of older adults are obese and could benefit from weight reduction medications. Up to 34.4% of patients over the age of 60 with obesity in the United States have what's called sarcopenic obesity. Sarcopenic obese patients are patients who have obesity and low muscle mass at the same time and are potentially at the greatest risk for developing critically low muscle mass when taking the current approved GLP-1 receptor agonist. We therefore believe there is an urgent unmet need for a new generation of obesity drugs like Inovasar that can prevent the loss of muscle and allow the preferential loss of fat in older patients who are overweight or have obesity receiving GLP-1 receptor agonist therapies for weight reduction. Novosarm is a next-generation drug that makes weight reduction by GLP-1 receptor agonist drugs more tissue-selective for fat loss. Let's talk about our Phase IIb Quality Clinical Study update. On January 27, 2025, the company announced positive top-line results from the Phase IIb Quality Clinical Study, which is a multicenter, double-blind, placebo-controlled, randomized, dose-finding clinical trial designed to evaluate the safety and efficacy of the Novosarm 3mg, Novosarm 6mg, or placebo as a treatment to augment fat loss and prevent muscle loss in sarcopenic obese and overweight patients over the age of 60 receiving semaglutide with COVID. The study was conducted in 14 clinical sites in the United States. The Phase IIb Quality Study is the first human study to report the effects of a muscle preservation drug candidate on body composition in older patients who have obesity or are overweight receiving a GLP-1 receptor agonist. In a top-line efficacy analysis, the trial met its pre-specified primary endpoint with a statistically significant and clinically meaningful benefit in the preservation of total lean body mass in all patients receiving Inovasarm plus semaglutide versus placebo plus semaglutide alone at 16 weeks. It was 71% relative reduction in lean mass loss, and that p-value is 0.002. The Inovasarm 3 milligram plus semaglutide was the best dose, with a greater than 99% mean relative reduction in loss of lean mass. That p-value is less than 0.001. And the NovoSom 6 mg semaglutide dose was not much better than the NovoSom 3 mg semaglutide dose on lean mass. As for the secondary clinical endpoints, the NovoSom semaglutide treatment resulted in the dose-dependent greater loss of fat mass compared to placebo and semaglutide alone, with the 6 mg dose having a 46% greater relative loss of fat mass compared to placebo plus semaglutide group at 16 weeks, and that p-value is 0.014. Although a Novosarm semaglutide significantly preserved lean mass, the additional loss of fat mass caused by a Novosarm treatment was able to replace the lean mass preserved to allow a similar net mean weight loss with semaglutide at 16 weeks. Accordingly, the tissue composition of the total weight loss shifted to greater and selective loss of fat with the NovoSom treatment. The median percentage of total weight loss in the placebo semactite group that was due to lean mass was 32%, and the estimated fat loss was 68%. In contrast, in the all NovoSom plus semactite group, the total weight loss due to lean mass was 9.4% versus the estimated fat loss of 90.6%. For inobasone 3 mg plus semaglutide, it was a 0.9% lean mass loss versus 99.1% fat loss. Therefore, inobasone plus semaglutide improved changes in body composition, resulting in more selective and greater loss of adiposity than in subjects receiving placebo plus semaglutide. Physical function. Physical function was measured by the stair climb test. Climbing stairs is an activity of daily living, and the sterochrome test measures functional muscle strength, balance, and agility. The compliance and performance measured by sterochrome tests predicts in older patients higher risk for mortality, mobility disabilities, gait difficulties, hospitalizations, falls, and bone fractures. As a point of reference, sterochrome power declines by 1.38% annually with aging, according to Van Rory, And this is a plus-one 2019 reference. A responder's analysis was conducted using a greater than 10 percent decline in sterocline power as the cutoff is 16 weeks. That cutoff represents an 8- to 10-year loss of sterocline power due to aging. In our study, the loss of lean mass mattered, as 42.6 percent of patients on placebo semaglutide had at least a 10 percent decline in sterocline power physical function in 16 weeks. This is the first human study to demonstrate that older patients who are overweight or have obesity receiving semaglutide GLP-1 receptor agonists are at higher risk for accelerated loss of lean mass with physical function decline. The all-in-ovacime semaglutide group had a statistically significant and clinically meaningful 54.4% mean relative reduction in the proportion of subjects that lost at least 10% sterocline power compared to placebo plus semaglutide group. That p-value is 0.0049. In the inovosome 3 mg semaglutide group, there was a 62.4% relative reduction in the proportion of patients with at least a 10% decline in sterocline power from baseline versus placebo plus semaglutide, and that p-value is 0.0066. In the inovosome 6 mg plus semaglutide group, it was a 46.2% relative reduction in proportion to patients with at least a 10% decline in stereocline power from baseline versus placebo plus semaglutide group, and that p-value was 0.0505. Therefore, a novus arm treatment preserved lean mass muscle, which translated into the reduction in proportion to patients that had a clinically significant stereocline physical function decline versus subjects receiving semaglutide alone. Novosarm represents the next generation of drug that improves GLP-1 receptor agonist therapy to result in tissue-selective quality weight reduction. That is, Novosarm plus semaglutide improve changes in body composition, which result in more selective and greater loss of adiposity, that's fat, than subjects receiving placebo plus semaglutide alone. We're very excited about the top-line results. The efficacy data provides a proof of concept that you can retain lean mass improve physical function, and lose enough fat mass to make up for the lean mass retained to have the same weight loss as semaglutide alone in 16 weeks. Our expectation is that when patients are treated longer with inovasone plus semaglutide, this selective and greater loss of adiposity should translate to greater quality weight reduction than with semaglutide alone. That's for safety. Safety data for the Phase IIb quality study remains blinded. as the Phase IIb extension clinical study portion is ongoing. The unblinded complete safety set will be available after the Phase IIb extension study is completed. However, the aggregate blinded safety data have not shown any significant differences compared to previous studies in the novus arm and what is already expected with GLP-1 receptor agonists. The Independent Data Monitoring Committee met this week, February 10, 2025, to evaluate the unblinded safety data, and they made the recommendation to continue the study as designed. So this week they met and made that recommendation. After completing the efficacy dose-finding portion of the Phase IIb quality clinical study, the participants continued into the Phase IIb extension trial, where all patients have stopped treatment with semaglutide, but they continue taking placebo, in Novosarm 3 milligrams or Novosarm 6 milligrams in a blinded fashion for 12 weeks. The Phase 2B extension trial will evaluate whether Novosarm alone can maintain muscle and prevent fat regain that generally occurs after discontinuing a GLP-1 receptor agonist. The top-line results of the separate blinded Phase 2B extension clinical study are expected in the second quarter of calendar 2025. The company plans to present the full clinical efficacy and safety data set for the Phase 2B quality clinical study in future scientific conferences and publications after the Phase 2B extension portion of the study is completed and unblinded. As the Phase 2B quality study has positive top-line clinical results, we plan to move forward to request an end-of-Phase 2 meeting with FDA. We have previously met with FDA to discuss a regulatory path forward as an improvement in body composition drug, and the FDA has provided general advice on Phase III design. Based on the successful Phase II quality clinical trial, we plan to run a similar study as a Phase III study. The duration of treatment will be expected to be 52 weeks, which will allow us to also capture the longer-term benefits of a novus arm improvement on body composition for greater laws of adiposity and weight reduction. As for the novel Novosarm modified release oral formulation, as you know, Vero is currently developing a novel patentable modified release formulation for Novosarm. We anticipate the actual formulation, pharmacokinetic release profile, and method of manufacturing will be subject to future patents. The drug product formulation is currently in animal trials and is anticipated to be available for the Phase I bioavailability clinical trial during the first half of calendar 2025. The expectation is that the oral Novus Arm modified release drug formulation will be utilized for the Phase III clinical studies and for commercialization. A new program is the atherosclerosis inflammation program. So given the recent positive top-line results from the Phase IIb quality study, evaluating Novus Arm as a cardiometabolic agent It has the potential to preserve muscle, augment fat, and overweight in obese patients receiving GLP-1 receptor agonist therapy for weight reduction. Vero has evolved its drug development strategy for sabizabulin and is exploring the possibility of the clinical development of sabizabulin, which is a novel oral broad anti-inflammatory agent for the treatment of the inflammation in atherosclerotic cardiovascular disease. The company believes there are compelling scientific evidence and rationale to evaluate subisobulin as a treatment for inflammation associated with atherosclerotic cardiovascular disease. More specifically, atherosclerotic coronary artery disease remains the leading cause of mortality worldwide. Inflammation and high cholesterol jointly contribute to atherosclerotic cardiovascular disease. It appears that the pathogenesis and progression of coronary artery disease, however, is largely driven by inflammation in response to the atheromatous plaques containing cholesterol in the arterial wall. Even with maximal cholesterol reduction therapies, there remains a major and largely untreated residual inflammation risk. The realization that the combined use of aggressive lipid lowering and inflammation-inhibiting therapies might be needed to further reduce atherosclerotic risk has sparked the search for anti-inflammatory medicines that can lower the risk of atherosclerotic events in patients with coronary artery disease. An old drug Colchicine, which inhibits tubulin polymerization to disrupt microtubules, resulting in broad anti-inflammatory activity. Recent randomized controlled trials assessing the role of low-dose colchicine to treat inflammation to reduce major adverse cardiovascular events have promising results, demonstrating a reduction in cardiovascular risk. Colchicine lowered major adverse cardiovascular events by 31% among those with stable coronary artery disease, by 23% in patients following a recent myocardial infarction. This magnitude of benefit is greater than what has been observed in contemporary trials of lipid-lowering agents, including those with PCSK9 inhibitors. Data from these trials led the FDA just recently, in June of 2024, to approve colchicine as the first anti-inflammatory drug for reducing cardiovascular events in patients with established atherosclerotic cardiovascular disease. However, while coltacine may be the first FDA-approved drug to treat atherosclerotic inflammation, unfortunately, coltacine has significant safety concerns that may limit its expected widespread use. Coltacine has high potential for drug-drug interactions with commonly used cardiovascular drugs, including almost all statins. In contrast, virosebizobulin is a new molecular entity, a small molecule, that targets the coltacine-binding xylem beta-tubulin. Like colchicine, sabizabulin inhibits microtubule polymerization and has demonstrated the ability to reduce the most important inflammatory mediators that play a role in the initiation and the progression of atherosclerotic coronary artery disease. In contrast to colchicine, sabizabulin has stable pharmacokinetics, low potential for drug-drug interactions, and thus sabizabulin may be administered potentially more safely as a secondary therapy in combination with statin therapy, for the reduction of inflammation to slow the progression and promote the regression of atherosclerotic cardiovascular disease. Overall preclinical data from the in vitro and in vivo inflammatory studies show that subisobulin treatment suppressed all the cytokines and chemokines tested, and in Phase II and Phase III pulmonary inflammation COVID-19 clinical studies, subisobulin has demonstrated broad anti-inflammatory activity. The safety database consists of 266 dose patients from previous sub-visibial and clinical development programs. The company's decision to explore this major cardiometabolic indication was based on the significant unmet medical need to treat inflammation or atherosclerotic cardiovascular disease, the large global market opportunity, the current clinical and safety sub-visibial and database of 266 patients, the high probability of success, given that subizobulin's drug mechanism of action is similar to colicine, strong intellectual property position, and is consistent with the company's focus on cardiometabolic diseases. Furthermore, the company believes subizobulin may be evaluated in a small Phase II dose finding proof-of-concept study to assess the progression of coronary atherosclerosis in patients using the primary endpoint of coronary plaque volume and composition measured by coronary CT angiography imaging. The company decides to pursue the Phase II clinical study. The company plans to partner with the Colorado Prevention Center in Aurora, Colorado, and the Lundqvist Institute in Torrance, California. We have had this pre-IND meeting with the FDA Division of Cardiology and Nephrology Center for Drug Evaluation and Research in December 26, 2024. The indication of the discussion was the use of sabizabulin, the slow progression of promotative regression of atherosclerotic disease in patients with coronary artery disease. The FDA agreed that there remains an unmet medical need based on disease pathophysiology and concurred with the general design of the small phase 2 study using coronary CT angiography imaging as a primary endpoint. The FDA also requested the company conduct Chronic non-clinical toxicology animal studies supports a chronic use of subisobulin for this indication. The chronic non-clinical animal studies are expected to be completed, and a new IND for the proposed indication is expected to be submitted by the first half of calendar 2026. Vera currently has sufficient drug substance to supply the proposed Phase II clinical study. Comment on the FC2 female condom sale. On December 30, 2024, we sold our FC2 female condom business to an affiliate of Riva Ridge Capital Management, LP, a New York City-based investment management firm for $18 million. Subject to adjustment is set forth in the purchase agreement, which Michelle Greco will discuss in a few moments. The monetization of the FC2 business allows Viru, to be a pure biopharmaceutical company focusing its additional non-dilutive resources on the execution and development of its promising late-stage clinical pipeline. I will now turn the call over to Michelle Greco, CFO and CAO, to discuss the financial highlights. Michelle?