Veru Inc.

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 call over to Mr. Sam Fish, Veru, Inc.' 's Executive Director, Investor Relations and Corporate Communications. Please go ahead, sir.

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 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 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, Vero Inc.' 's Chairman, CEO, and President.

Good morning. With me on this morning's call are Dr. Gary Barnett, the 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, Executive Director of Investor Relations and Corporate Communications. Thank you for joining our Q2 fiscal year 2025 earnings call. Vero is a late clinical stage biopharmaceutical company focused on developing novel medicines for the treatment of cardiometabolic and inflammatory diseases. Our drug development program consists of two clinical stage drug candidates, Anobisarm and Subizabulin. Anobisarm, an oral selective antireceptor modulator, SARM, is being developed as a novel drug that makes GLP-1 receptor agonist weight reduction more tissue selective by preserving lean mass muscle while causing greater fat loss in older patients who are overweight or have obesity. Cibizbulin is an oral microtubule disruptor. It's being developed as a broad anti-inflammatory agent to reduce vascular plaque inflammation to slow the progression of promoter regression. of atherosclerotic cardiovascular disease. This morning, we will focus our update only on our obesity program. As defined by FDA, obesity is a disease of excess body adiposity of fat. Therefore, the medical objective to treat obesity by weight reduction drug or drugs in combination should be to reduce excess body fat, not lean mass, in order to improve the mobility and mortality associated with obesity. GLP-1 receptor agonists have been shown to produce significant weight loss in patients who overweight or have obesity. Unfortunately, the weight loss is tissue non-selective, with the indiscriminate loss of both fat and lean mass. Of the total weight loss, up to 50% of the total weight loss is attributable to lean mass. We must do a better job at getting rid of fat tissue only. Let's face it. No one wants to lose lean muscle mass. Most of this is common sense. but the beneficial consequences of increasing or maintaining muscle mass in an aging population are increased basal metabolism with sustainable weight management, better control of your blood glucose, better joint health, better increased strength, increased balance, potential decreasing falls, increased bone mineral density, potential decreasing non-traumatic bone fractures, and increases in the possibility of maintaining independence in an older population. With that objective, We are developing a NovoSARM, which is an oral novel SARM that has demonstrated in previous clinical studies improvements in body composition with tissue selective increases in lean mass and decreases in fat mass, improvements in both muscle strength and physical function, no masculizing effects in women, and neutral prostate effects in men. We conducted a Phase IIb multi-center double-blind placebo-controlled randomized dose finding qualities clinical study designed to evaluate the safety and efficacy of Inovasarm 3 milligrams, Inovasarm 6 milligrams, or placebo as a treatment to augment fat loss and prevent muscle loss in 168 older patients greater than or equal to 60 years of age receiving semaglutide, which is Regovi, for chronic weight management. The primary endpoint is percent change in baseline and total lean body mass, and the key secondary endpoints are percent change in baseline and total body fat mass, total body weight, and physical functions measured by sterifime test at 16 weeks. After completing the efficacy dose assessment portion of the Phase 2B quality clinical study, the patients continued into a Phase 2B extension maintenance trial where all patients have stopped treatment with semaglutide but continue to take placebo, Novosom 3mg or Novosom 6mg in a blinded fashion for an additional 12 weeks. Phase 2B clinical trial will evaluate whether a novus arm can maintain muscle and prevent the fat regain that generally occurs after discontinuing a GLP receptor agonist. The purpose of the Phase 2B quality clinical trial is to select a dose of a novus arm in combination with semaglutide or GOVI that best preserves lean mass or muscle and physical function after 16 weeks of treatment to advance into the Phase III clinical program. The positive top-line results of the Phase IIB quality clinical study demonstrated that Novus Arm is a novel drug that, when combined with a GLP-1 receptor agonist, makes weight reduction and more tissue selective for greater fat loss while preserving lean mass or muscle. Phase IIB quality study is the first human study to report the effects of a muscle preservation drug candidate on body composition and physical function in older patients who were receiving a GLP-1 receptor agonist for weight reduction. The Phase 2B quality clinical study met its primary endpoint with a statistically significant and clinically meaningful benefit of a 71% preservation of total lean body mass in all patients receiving a Novosar plus semaglutide versus placebo plus semaglutide in 16 weeks, and that p-value equals 0.002. Novosarm 3 mg plus semaglutide was the best dose, with a greater than 99% mean relative reduction in the loss of lean mass. The FP value is less than 0.001, meaning almost the entire weight loss was fat mass. The Novosarm 6 mg plus semaglutide dose preserved lean mass, but was not any better than the Novosarm 3 mg plus semaglutide dose, This is not unexpected. This is similar to what we have seen in our previous multiple ascending dose clinical studies. We believe that at a certain point, the target of the angiotensin receptor becomes oversaturated by a drug. As for the secondary clinical endpoints, inobasone plus semaglutide treatment resulted in a dose-dependent greater loss of fat mass compared to placebo plus semaglutide with the inobasone six milligram 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 inobasarm plus semaglutide significantly preserved lean mass, the additional loss of fat mass caused by inobasarm treatment was able to replace that lean mass preserved to allow a similar net mean weight loss measured by DEXA with semaglutide at 16 weeks. Accordingly, With the Novosar treatment, the tissue composition of the total weight loss shifted to greater and more selective for fat loss. For the placebo semactite group, the median percentage of total body weight loss was 32% for lean mass, and estimated fat loss was 68%. In contrast, in the all-Novosar semactite group, the total weight loss due to lean mass was only 9.4%, and estimated fat loss was 90.6%. And in the NovoSom 3 milligram plus semaglutide group, it was 0.9% lean mass and 99.1% estimated fat loss. Therefore, NovoSom plus semaglutide improved changes in body composition, resulting in more selective and greater loss of fat compared to subjects receiving placebo plus semaglutide. Now, physical function was measured by the stair climb test. Sterocline test is an activity of daily living as it measures muscle strength, balance, and agility. Decline in performance measured by sterocline test has been shown in older patients to predict a higher risk for mobility disabilities, gait difficulties, falls and bone fractures, hospitalizations, and mortality. A responder's analysis was conducted using a greater than 10% decline in sterocline power as a cutoff at 16 weeks. A greater than 10% decline in sterocline power at 16 weeks represents a 7- to 8-year loss of sterocline power function that occurs with aging, and this was documented by Van Rory in 2019. In our study, the loss of lean mass mattered, as 42.6% of patients on placebo plus semaglutide group had at least a 10% decline in sterocline power physical function at 16 weeks. Again, this is the first human study to demonstrate that older patients receiving GLP-1 receptor agonists for weight loss are at a higher risk for accelerated loss of lean mass and with physical decline. The all-innovosomal semaglutide group had statistically significant and clinically meaningful 54.4% relative reduction in proportion to subjects with loss of at least 10% sterocline power compared to placebo semaglutide group and that p-value was 0.0049. In the inovasome 3-mg plus semaglutide group, there was a 62.4% relative reduction in proportion to patients with at least a 10% decline in sterocline power. From baseline versus placebo plus semaglutide group, that p-value was 0.0066. In a 6-mg plus semaglutide group, there was a 46.2% relative reduction in proportion to patients with at least a 10% decline in sterocline power from baseline versus placebo plus semaglutide group, the p-value is 0.0505. In conclusion, in novus arm treatment, on average preserved lean mass and muscle, which translated into a reduction in the proportion of patients who had a clinically significant decline in sterocline physical function versus patients receiving semaglutide alone. In summary, in novus arm plus semaglutide improved changes in body composition, which resulted in more selective and greater loss of adiposity of fat mass while preserving lean mass and muscle and preserving physical function or sterocline power compared to patients receiving placebo plus semaglutide alone. Inovasarm represents a novel drug that in combination with the GLP-1 receptor agonist containing therapy causes greater and more selective loss of fat mass, which is the goal for higher quality chronic weight management. Next. We will discuss several upcoming clinical and regulatory catalysts. Number one, results of the unblinded safety data for the Phase 2B quality study are expected this quarter. Safety data for the Phase 2B quality study remains blinded as the Phase 2 extension maintenance clinical study portion is still finishing up. It should be noted that the aggregate blinded safety data have not shown any significant differences compared to previous clinical studies in the novus arm and what is expected for a GLP-1 receptor agonist. Further, the Independent Data Monitoring Committee met February 10, 2025, to evaluate the unblinded safety data, and they made the recommendation to continue the study as planned. Next catalyst is the Phase IIb Extension Maintenance Study Efficacy and safety results are expected this quarter. As a reminder, after completing the efficacy dose-finding portion of the Phase IIb quality clinical study, which evaluated the effects of an ozone body composition during the active weight loss, participants continued into the Phase IIb extension trial, where all patients stopped treatment with semaglutide but continued taking placebo, the NovoSom 3 milligrams, the NovoSom 6 milligrams monotherapy in a blinded fashion for 12 additional weeks. The Phase 2B extension clinical trial will evaluate whether the NovoSom can maintain muscle and, more importantly, prevent fat regain that generally occurs after discontinuing the GLP-1 receptor agonist. The company plans to present the full clinical efficacy and safety data sets for the Phase 2B quality clinical study and the phase 2B extension maintenance study in future scientific conferences and publications. The next catalyst is we expect regulatory clarity for the GLP-1 receptor agonist and an ovosome combination phase 3 clinical program following an end-of-phase 2 FDA meeting, which is anticipated in Q3 2025. As a phase 2B quality clinical study is a positive study, we plan to request an end-of-Phase II meeting with FDA. During our previous pre-IND FDA meeting, FDA provided general comments about a regulatory path forward for Inovasarm as a drug that improves body composition during chronic weight management, including input on Phase III clinical program design. On the basis of this FDA input, we plan to propose a Phase III clinical program that is similar to the positive already positive Phase 2B quality clinical trial. The proposed Phase 3 clinical trial design is a double-blind placebo-controlled study in older patients greater than or equal to the age of 60 who have obesity or are overweight and who are eligible for treatment of the GLP-1 receptor agonist. The GLP receptor agonist may be either Rigobi, which is a maglithide, and or Zepfound, to Zepatide. Patients will be randomized the oral daily Novosarm and matching placebo. All subjects will start and receive the GLP-1 receptor agonist during the study. The proposed primary endpoint will be the effect of the Novosarm on physical function measured by stereocline tests at 24 weeks. Proposed key secondary endpoints will be to assess the effect of the Novosarm on total lean mass, total fat mass, HOMO-IR, which is insulin resistance, and hemoglobin A1C at 24 weeks. After the Phase III clinical trial ends at 24 weeks of treatment, the plan is to continue to measure total lean mass, total body weight, sterocline tests, total fat mass, bone mineral density, HOMO-IR, as I mentioned, as insulin resistance, and hemoglobin A1C for up to 68 weeks to capture the longer-term benefits of the Novosar improvements on body composition with greater loss of adiposity of fat, preservation of both lean mass and bone. for chronic weight management. Another catalyst is we have a novel, modified release oral InovaZarm formulation, which is on track to be available for the Phase III clinical studies and commercialization. Vero is currently developing a novel, patentable, modified release oral formulation for InovaZarm. The actual formulation, pharmacokinetic release profiles, and method of manufacturing will be subject to future patents. If issued, the expiry for the new modified release oral Inovasarm formulation patent is expected to be in 2045. The new Inovasarm formulation has completed animal trials and is anticipated to be in Phase I bioavailability clinical trials during the first half of calendar 2025. Again, the expectation is that this novel modified release oral Inovasarm formulation will be available for Phase III. clinical studies, and for commercialization. Finally, we are focusing our Phase III clinical program on the older patient population that could benefit from a weight reduction drug for chronic weight management because they're at higher risk for muscle weakness and falls because of age-related loss of muscle. Obesity prevalence is 41.5% among 47.4 million patients enrolled in Medicare Part D plans, up to 34.4% of patients over the age of 60 with obesity in the United States has 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 a currently approved GLP-1 receptor agonist. Now, although older patients represent a large market population alone, success in this population can be a said way into the combination of a Novosarm and GLP-1 receptor agonist treatment in younger patients who have obesity, as well as diabetic and the frailty populations. I will now turn the call over to Michelle Greco, our CFO-CEO, to discuss the financial highlights. Michelle?