Q4 2022 Veru Inc Earnings Call

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Speaker 4: signal 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 call over to Mr. Sam Fish, Veru Incorporated's Executive Director of Investor Relations and Corporate Communications. Please go ahead.

Speaker 5: Good morning. The statements made on this conference call may be forward-looking statements.

Speaker 6: 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.

Speaker 7: 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.

Speaker 8: Risks that may cause actual results or developments to differ materially are contained in our 10Q and 10K 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, Veru Inc.'s Chairman, CEO and President.

Speaker 9: Good morning. With me in this morning's call are Dr. Gary Barnett, the CSO, Michelle Greco, the CFO and CAO. Dr. Bonus, all Bamkay Please turn off.

Speaker 10: Michael Purves, the EVP of General Counsel and Corporate Strategy, and Sam Fish, the Executive Director of Investor Relations and Corporate Communications. Thank you for joining our call. Vera is a biopharmaceutical company focused on developing novel medicines for COVID-19 and other viral and ARDS-related diseases and for oncology. The company has a commercial sexual health program called UREV.

Speaker 11: which includes two FDA-approved products in TAFE, a new treatment for benign prosthetic hyperplasia, and FC2 female condom and 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 partially to fund the clinical development of our late-stage therapeutic candidates, which aim to address multi-billion dollar premium market opportunities.

Speaker 12: This morning, we will provide an update on our COVID-19 Sebusabulin clinical program, the clinical development of our oncology drug pipeline, and the commercialization of our products in the UREV program. We will also provide financial highlights for our fiscal fourth quarter and our fiscal year 2022 year-end.

Speaker 13: First, I will update you on the status of sebizibulone, an investigational drug candidate for the treatment of hospitalized adult COVID-19 patients and high risk for ARDS. We reported positive results from the Phase III COVID-19 clinical trial, which was a double-blind, multi-center, multinational randomized 2-to-1, placebo-controlled study.

Speaker 14: Evaluating daily oral 9 milligram doses to bizubulin for up to 21 days versus placebo in 204 hospitalized, moderate, severe COVID-19 patients who had high risk for ARDS and death.

Speaker 15: Both the placebo and sebizibulin treatment groups were allowed to receive standard of care treatment, which could include dexamethasone, remdesivir, anti-IL6 receptor antibodies, and or JAK inhibitors.

Speaker 16: The primary efficacy endpoint of our Phase III trial was the proportion of patients who die on study up to day 60. Key secondary endpoints measured included the proportion of patients alive without respiratory failure, days in the ICU, days on mechanical ventilation, days in the hospital, and viral load.

Speaker 17: On April 8, 2022, the Independent Data Monitoring Committee conducted a planned interim efficacy analysis in the first 150 patients randomized in the Phase 3 COVID-19 study. After reviewing the unblinded clinical data, the Independent Data Safety Monitoring Committee unanimously recommended that the Phase 3 study be halted early.

Speaker 18: due to clear clinical efficacy benefit. The Independent Data Monitor Committee also remarked that no safety concerns were identified.

Speaker 19: In this interim analysis, sebizibulone treatment demonstrated a statistically significant 24.9% percentage point absolute reduction and a 55.2% relative reduction in all-cause mortality by day 60. That was the primary efficacy endpoint of the study. And that p-value was 0.0042.

Speaker 20: 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 sebizibulone 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.

Speaker 21: In the full final data set of 204 randomized patients, the all-cause mortality benefit was similar to the positive clinical results observed in the interim efficacy analysis population, which is a bizipulin treatment resulting in a 51.6% relative reduction in bloods compared to placebo treatment, and that p-value is 0.0046.

Speaker 22: Data from the key secondary efficacy endpoints demonstrated that sebizibulin treatment resulted in a significant reduction in days in the ICU, days on mechanical ventilation, days in the hospital compared to placebo.

Speaker 23: Subisibulin also had an acceptable safety profile. Significantly fewer adverse and serious adverse events were reported for subisibulin compared to placebo. There were also fewer treatment discontinuations due to adverse events in the subisibulin group compared to placebo. The Phase 3 reported safety profiles suggest that subisibulin treatment may have resulted in fewer COVID-19 related morbidities.

Speaker 24: during the ongoing pandemic and the potential clinical benefit of sebizibulin and hospitalized, moderate to severe COVID-19 patients.

Speaker 25: We plan to submit a manuscript of the overall 204 randomized subjects to a prestigious peer-reviewed medical journal soon.

Speaker 26: In addition, we are extremely pleased that the clinical results in the Phase 3 trial of sebizibulone in COVID-19 patients was highlighted in two medical conference presentations this fall, including a late breaker oral presentation in ID week.

Speaker 27: Next, I will share with you our US and ex-US regulatory situation and progress regarding sebizibulin and COVID-19.

Speaker 28: On May 10, 2022, we had a pre-emergency use authorization meeting with FDA. In this meeting, the FDA agreed that no additional efficacy studies would be required to support an emergency use authorization, or EUA, or an NDA. FDA also agreed that no additional safety data would be required to support an EUA.

Speaker 29: but the collection of safety data under the EUA would satisfy the safety requirements for an NDA.

Speaker 30: Based on that FDA feedback from that meeting, on June 6, 2022, we submitted a request for an EU application to FDA.

Speaker 31: On November 9, 2022, the US FDA's Pulmonary Allergy Drugs Advisory Committee met with the company to review its request for EUA of sebizibulone. Although the advisory committee had a vote of 8 to 5 that the known or potential benefits of sebizibulone when used for the treatment of adult patients hospitalized with COVID-19 high risk of ARDS do not outweigh the known or potential risks of sebizibulone.

Speaker 32: application. We're in contact with the FDA as they continue to review our request for the EUA.

As it relates to our ex-U.S. regulatory updates, on July 27, 2022, we announced that the European Medicine Agency, which is also known as EMAs, Emergency Task Force, had informed the company that it has initiated a review of sebizibulone for the treatment of hospitalized COVID-19 patients at high risk for acute respiratory distress syndrome. The review will assess the 31 EU member states.

who may consider allowing the use of the medicine before a formal marketing authorization is granted. This review of sebizibulone 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 their review of sebizibulone.

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. CHMP then reviews the recommendation and renders an opinion whether sebizibulin qualifies for emergency use in Europe .

On December 2nd, 2022, we had 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 for plant and variety standpoint.

or to complement to procurement at the national level. The Joint Procurement Framework contracts have been previously signed with Gilead, Hoffman LaRoche, GSK, and most recently on November 23rd with Pfizer.

With respect to the United Kingdom, on July 25, 2022, we announced that the UK's Medicine and Healthcare Products Regulatory Agency, again also known as MHRA, considers that the currently available safety and efficacy data will support an expedited review of the marketing authorization application for the company's subisibulant treatment in hospitalized COVID-19 patients at high risk for acute respiratory distress syndrome when the application is submitted.

Access Consortium national groups, which includes UK, Australia and Switzerland. And the Access Consortium is a coalition of these regulatory authorities with therapeutic products that work together to promote greater regulatory collaboration and alignment of regulatory requirements.

Also, on November 28th, we submitted a regulatory data package for Subisibulant to Health Canada. To recap, we have submitted regulatory data packages and requests for emergency use authorizations on an international level to the European Union, the UK, Australia, Switzerland, and Canada, as well as South Korea. We are also in various stages of discussions with regulatory agencies in other countries to obtain regulatory emergency expedited authorizations.

following a potential FDA authorization in the U.S., as well as potential authorizations and approvals in other ex-U.S. countries and territories. As an update for the commercialization of sebizibulone in the U.S., Joel Batten, our executive vice president and general manager of the U.S. infectious disease franchise, was hired in May of 2022. Mr. Batten has assembled an experienced leadership team to commercialize sebizibulone in the U.S.

This dedicated team consists of 16 employees and 52 contractors that are focused on commercial launch, market access, and medical affairs. We have also executed contracts with wholesalers for specialized hospital distribution services with Simsbuhlen.

We are ready for the launches of BizBuel into hospitals across the U.S. if we are granted emergency use authorization.

We also have established Vero International, the commercialized sebizibulin to the rest of the world. Jason Davies joined us in August of 2022 as the Executive Vice President, General Manager of Europe , the Middle East and Africa, Latin America, Canada, UK, and the Asian Pacific for Vero's infectious disease franchise for Vero International. Next recently-

Mr. Davies held positions as the EMEA head of launch excellence and pharmaceutical portfolio at Janssen, which is the Johnson & Johnson company, where he's responsible for creating and leading a new organization to enhance launch strategy and execution across all of Janssen's EMEA's pharmaceutical portfolio. Over the course of his career, Mr. Davies spent approximately 20 years in several commercial positions of increasing responsibility.

including government purchase agreements, as well as the go-to-market commercial partner and distribution strategy for Sevisibil and COVID-19, if authorized, as well as planned future indications for other viral ARDS-related diseases.

If we receive an emergency use authorization from the U.S., EU, or in another large market, we plan to initiate in a post-emergency use authorization setting.

any potential additional clinical studies that regulatory agencies request to evaluate subisibulant for the treatment of hospitalized, moderate to severe COVID-19 in all patients with high risk of ARDS and death.

We're also excited to expand the investigation of sebizibulin into other infectious disease indications based on the candidate's novel mechanism of action. As we have preclinical data in vivo scientific data that demonstrates that sebizibulin has activity against H1N1 variant of influenza A, also known as swine flu, we plan to conduct a phase 3 clinical study.

to evaluate sebizibulone in hospitalized adult patients with influenza A, who had high risk for ARDS. Influenza A virus causes up to 52,000 deaths and 710,000 hospitalizations each year in the U.S. alone. We also plan to conduct a Phase III clinical study of sebizibulone for the treatment of hospitalized adult patients with viral ARDS.

which would include respiratory virus which alone causes 14,000 deaths and 177 hospitalizations each year in the U.S. As outlined above.

Zibizibulin, as a novel antiviral and anti-inflammatory agent, 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're actively enrolling two phase three clinical trials. The first is the RTES registration clinical study in approximately 210 patients to evaluate Inobus arm monotherapy for third line treatment of AR positive, ER positive, HER2 negative metastatic breast cancer.

The second one is the Enabler 2 registration clinical study in approximately 186 patients to evaluate the efficacy and safety of the Novus arm and the Bemacyclid 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 Pavlosiclid which is a CDK S46 inhibitor.

plus an estrogen-blocking agent, and who have sufficient AR expression in their breast cancer tissue. We have a clinical trial collaboration and supply agreement with Lilly for the Enabler II Phase III clinical study. And under terms of the non-exclusive clinical trial collaboration and supply agreement, if you're responsible for conducting the clinical trial, Lilly is supplying Abemacyclib for this study.

VIRU maintains full, exclusive, and global rights to Novosarin. In the advanced prostate cancer, we're actively enrolling a phase 3 and a phase 2 clinical trial. We're actively enrolling an open label randomized 2 to 1 multi-center phase 3 voracity clinical study evaluating sebizibulone 32 milligrams versus an alternative antigen receptor targeted agent.

for the treatment of chemotherapy in naive men with metastatic castration-resistant prostate cancer who've had tumor progression after previously receiving at least one angioreceptive targeted agent. The primary endpoint is radiographic progression of brief survival, enrollment for the Phase III of Veracity Clinical Studies on track and ongoing.

Our second clinical study in prostate cancer is evaluating VIR-100, a GNRH antagonist three-month depot formulation in a phase two dose-finding clinical study for the treatment of hormone-sensitive advanced prostate cancer. With all the studies ongoing, the promising preclinical...

cancer is evaluating Vero 100, a GNRH antagonist three-month depo formulation in a phase two dose-finding clinical study for the treatment of hormone-sensitive advanced prostate cancer. With all the studies ongoing, the promising preclinical data

demonstrate that Vero 100 has the ability to both induce and maintain castration for three months.

VIRU has a commercial sexual health division called UREV, which includes two FDA 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 fast-growing and highly reputable telemedicine platform companies to bring our FC2 product to patients in the most cost-effective and high-quality care.

created and launched our own dedicated direct-to-patient telemedicine and internet pharmacy services platform. We're pleased with its growing source of revenue to date and are committed to expanding its customer base and reach. And the website can be reached at fc2condoms.com

We also expect to see continued increase in our US public sector sales through our new agreements with the New York Department of Health and with new distribution partnerships with Global Protection as well as EFAXIS.

We also have Entadfi, an FDA-approved new treatment for benign prostatic hyperplasia and currently prescribed benign prostatic hyperplasia medicines may lead to the most common side effect of sexual adverse events. Entadfi has demonstrated its faster and more effective treatment option for benign prostatic hyperplasia than asteroid alone and it has not caused a side effect of impotence.

We launched this product during the fourth fiscal quarter with a focus on payer agreements as well as executing distribution, wholesaler and Medicare contracts.

I will now turn the call over to Michelle Greco, CFO and CAO, to discuss the financial highlights. Michelle, CFO and CAO.

Thank you, Dr. Steiner.

As Dr. Steiner indicated, once again, we have a lot of ongoing activity at Bureau.

Now, let's review the results for the fiscal year ended September 30, 2022.

Overall, net revenues for fiscal year 2022 were $39.4 million, compared to $61.3 million the prior year.

The U.S. prescription business net revenues decreased to $30.2 million from $46.5 million in the prior year.

The reduction is due to some business challenges experienced by our telemedicine customers during the year, which resulted in a slowdown in orders. Net revenue for the global public health sector business was $9.1 million compared to $13.9 million in the prior year.

The decrease in sales in the global public sector during the year is due primarily to 9.7 million units sold to Brazil and 4.9 million more units sold to South Africa in the prior year for tenders which have ended and therefore did not repeat in the current year.

Overall, gross profit was $30.6 million for 78% of net revenues, compared to $47.9 million for 78% of net revenues in the prior year.

The reduction in gross profit is driven primarily by the reduction in sales in our USFC2 prescription business.

Operating expenses increased to $113.8 million compared to the prior year of $53.4 million.

The increase of $60.4 million is primarily due to research and development costs, which increased $37.9 million to $70.6 million from $32.7 million in the prior year.

and the increase in selling general and administrative expenses of $22.5 million from $20.7 million in the prior year to $43.2 million in the current year.

The increase in research and development costs is due to the increased number of clinical trials.

This year we had four Phase III clinical trials and two Phase II clinical trials ongoing, while in the prior year we had three Phase III clinical trials and three Phase II clinical trials ongoing. We have three phase III clinical trials ongoing, while in the prior year we had three Phase

The increase in selling general and administrative expenses is primarily due to the increase in headcounts related to the preparations for the commercial launch of the TSB and potentially to bizibulin for COVID-19, as well as the launch of the company's own direct-to-patient telemedicine and pharmacy services portal for FC2, resulting in increased stock compensation for COVID-19.

and increased sales and marketing expenses. Operating loss for the year was $83.2 million compared to operating income in the prior year of $13 million.

The change of $96.2 million is primarily due to the gain on sale of preboost of $18.4 million in the prior year period.

the increase in research and development costs and selling general and administrative expenses during the current year, and the reduction in net revenues and gross profit during the year.

Non-operating expenses were $316,000 compared to $8.7 million in the prior year, which primarily consisted of interest, expense, and change in the fair value of the derivative liabilities related to the synthetic royalty financing.

For the year, we recorded a tax expense of $236,000 compared to a tax benefit of $3.1 million in the prior year.

The tax benefit recorded in the prior year is primarily due to the increased value of the UK net operating losses due to an increase in the UK tax rates from 19% to 25%.

The company has net operating loss carry-forwards for U.S. federal tax purposes of $112.5 million, with $29.7 million expiring in years through 2042, and $82.8 million, which can be carry-forward indefinitely.

and the company has UK net operating loss to record of $63.1 million which did not expire.

The bottom line results for the fiscal year 2022 were the net loss of $83.8 million, or $1.05 per diluted common share, compared to net income in the prior year, which included the gain on sale of preboost of $7.4 million, or $0.09 per diluted common share.

Now turning to the balance sheet. As of September 30th, 2022, our cash balance was $80.2 million and our accounts receivable balance was $3.6 million.

Our net working capital was $63.3 million on September 30, 2022, compared to $136 million on September 30, 2021. As a reminder, during fiscal year 2021, we sold pre-boost for $15 million in cash and $5 million in notes receivable, and completed an underwritten public offering resulting in net proceeds at the hundred and fifty thousand dollar bond.

future revenue from Entadsy added to our healthy balance sheet 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.

Now I'd like to turn the call back to Dr. Steiner.

Thank you, Michelle.

COVID-19 cases continue to persist worldwide and hospitalizations and death rates are rising as we head into the winter season. The emergence of COVID-19 variants BQ1 and BQ11 have contributed to this new surge and these mutated strains have the ability to evade immunity, meaning that these variants can affect anyone, including vaccinated individuals. In fact …

For the first time, more vaccinated people than unvaccinated people are dying from COVID-19. This waning immunity is partly because of the new variants, but also from booster vaccine fatigue. Thisitesix, The Garden of bubbles, As What acted as a Active- Moderator sticker As World fragmented,

Unfortunately, a million 80,000 Americans have died from COVID-19 to date. A series of recent articles, including one by Arianna Cha and Dan Keaton, published in the Washington Post entitled, COVID-19 Becomes a Plague of the Elderly, Reviving a Debate Over Acceptable Laws, points out, quote, nearly nine of 10 deaths are now in people 65 or over.

We believe that a safe oral therapeutic to treat hospitalized, moderate, severe COVID-19 patients who are at high risk for ARDS that prevents death is still desperately needed. We strongly believe that sebizibulin 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, moderate, moderate, severe COVID-19 patients continue to face.

While multiple regulatory agencies across the world review sebizibulin as a potential option for emergency use settings, we are eagerly and proactively preparing multiple work streams in the background. For instance, manufacturing drug supply and scale-up activities are in place. Our U.S. and international commercial infrastructure is ready.

to provide access to sebizibulin to hospitalized patients at high risk for ARDS and death, if authorized. We continue to live in a world facing a public health emergency as we enter the fourth year of the COVID-19 pandemic.

In summary, we continue to advance our core late clinical stage breast cancer and prostate cancer programs with three actively enrolling phase three clinical studies. Our legacy sexual health business comprises of two FDA approved products, continues to generate revenue, and if authorized, we expect to have substantial near-term revenue from sebizibulin 9 mg for hospitalized COVID-19 patients and high risk ARDS.

With that, I'll now open the call to questions. Operator.

Thank you. Ladies and gentlemen, at this time we'll begin the question and answer session.

To ask a question, you may press star then one on your telephone keypad. If you're 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 two.

Please limit 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 one to rejoin the question queue. We will pause momentarily to assemble our roster.

Our first question comes from Brandon Folks from Cantor Fitzgerald. Please go ahead.

Hi, thanks for taking my questions and congratulations on all the progress. So I guess no surprise where I'm going to start, but just, you know, I'll ask my two questions at the end because they kind of roll into each other. So maybe just firstly, can you talk about how much interaction you had with the FDA post the ADCOM and any way to put into context the nature of those interactions?WHITE

And then secondly, given a proposal to run, you know, a potential confirmatory phase three trial, I'm not saying that's gonna happen, but just how quickly could you get such a trial up and running provided it's within the range of maybe, you know, what you're expecting the trial to look like, maybe what was proposed, and you know, on that nature, I guess any risk or how should we think about sort of the one topic of maybe getting US.

and your standard of care, is there a rush to get it done this winter?

standard of care, is there a rush to get it done this winter? Thank you very much.

Okay. So, first question has to do with getting a sense of how much interaction we're having with the FDA post-ADCOM. And as I said in my prepared comments that we're in contact with the FDA, we are in contact with the FDA on an ongoing basis. And so, this is not radio silence by any meaning.

So that's number one. So what I can tell you is I said in my prepared remarks, they are continuing to review the EUA post-ADCOM.

As it relates to the question, I believe the question around the Phase III clinical trials, I guess your assumption is that we have to do the Phase III not under an EUA. Post-EUA, you mean just doing it or with an EUA? It doesn't matter.

It doesn't matter. I'm just trying to think about if they do ask for additional U.S. exposures, I think, which some of the committee members raised, how quickly can you get that up and running and does it need to be this winter versus maybe going to the southern hemisphere or having to wait for next year? Yes. Well, first of all, if you look at the pattern, we had our surge during the summer, just like Australia. It doesn't seem so far.

that COVID is really necessarily following the surge concept of other viruses where they tend to happen based on coming together during the winter months. It appears that you're still going to have it even in the summer months when people are going in for air conditioning, I guess, with crowds. But with that said, the strategy this time...

is to have more clinical sites than just US, South America, and Bulgaria. I wouldn't say there's a rush except the fact that the people dying and standard of care, one of the things that works in our favor is that literally thousands of companies have done clinical trials.

trying to find a drug for COVID-19 and have failed. And now we're down to a handful of drugs that have emergency use authorization, a full authorization, that have a modest, at best, mortality benefit. Remdesivir has no mortality benefit and as the only antiviral in this setting. And the anti-inflammatory agents, at best, with baricitinib, you're getting at about 5.7% absolute benefit in mortality.

sites, and with good scientific data showing the mortality benefit, that this trial should enroll much more quickly. And our goal is to enroll it as quickly as we can. But the truth of the matter is it still takes about three to six months to get most of your clinical sites up and running. And the endpoint will be 60 days, so we still have to have two months of follow-up after a patient is on the study. And we're even contemplating.

adding in as a follow-up, not as a primary endpoint, long COVID. As you know, long COVID is becoming the next major issue that people are dealing with COVID. So we're going to have a lot of fun with this additional trial in order to answer some of the questions we could not have answered during the ongoing pandemic because we just didn't know those were questions to ask.

So I think you can look for us to be pretty aggressive in getting that study done. As it relates to the question of, well, your second question has to do with standard care and rush to get it done. I kind of answered that. So standard care now, the best we're doing is still dealing with 300, 250 deaths a day.

on average, and now the hospitalizations are going back up, and the lag behind hospitalizations will be deaths again. And I think we're also dealing with immunity waning. People are just not getting the booster, no matter how much people are asking for boosters. And then we're seeing, quite frankly, that these antibody drugs, particularly the one from Lilly, that was the only hope that immunocompromised patients had is gone.

and so they're at risk. So I think what we're seeing is this evolving situation is pointing to standard of care is just not adequate. And the rush, the rush is that you've got a loved one that's dying and what do you want to do about that? And so I think that as physicians, to have this additional tool will be very important.

Thanks, Mitch. I appreciate all the color. It definitely makes sense. Congrats on the progress. Thank you.

Our next question comes from Leland Gershow from Oppenheimer. Please go ahead.

Mitch, thank you for the update and for taking our questions. Just to get into specifics, to the extent you're able to with respect to the ongoing FDA.

Can you say that you are continuing to discuss the design of what may be a confirmatory trial that would be performed under the EUA? Is that a part of the ongoing process of the trial?

that you are continuing to discuss the design of what may be a confirmatory trial that would be performed under the EUA is that a part of the ongoing discussion content.

What I can tell you, which is public, is that the FDA stated in their background package that the design that they laid out was agreed upon by the sponsor.

So it's there. And so that's not the top discussion point, because that's been agreed upon. I think I can't say much more than that, except right now, you know, in the black box of the FDA, you know, they're checking their boxes. You know, they need to check. Can you comment if there are any particular boxes that are...

Are you aware of any dependence on what the EE way decision outcome will have in terms of what those XUS decisions may be versus independent, what could be independent emergency authorizations in other places, irrespective or prior to an FDA decision?

Let me see if I can give you some color on that. The question is basically, have you noticed any changes in the interactions that we're having with other governments that are reviewing our application based on the advisory committee? The answer is no. In fact, what we see is intense discussions with other regulatory agencies outside the U.S.

To put this in perspective, in using Remdesivir as an analog, especially the last six months that was reported by Gilead, almost 52 to 53 percent of their revenue, they reported I think revenue of $1.9 billion for the first half of the year, was coming from outside the U.S. and a big bulk of that was coming from Europe .

The point I'm trying to make is that when you're looking at the COVID-19 drug, the split of 65% in the US and 35% outside the US doesn't make sense. It's very different. And when you look at that, the major markets then turn out to be Europe and all the countries that follow Europe . So if Europe gives you an emergency use authorization similar...

then 80% of the countries outside of Europe will use that authorization as part of their review or in lieu of their review, okay, and it makes sense. So, you get U.S., you get Europe , you get both, and those are the major markets. You're good to go and have significant revenue. But I will tell you that there has not been at all a improvement in the

any change in the interactions that we've had with, as I mentioned in the prepared comments, with multiple agencies. And the multiple agencies remain engaged and active in their review. And so, no, the answer is no. The answer is it appears to be quite independent. And as I mentioned, the FDA is still reviewing the application. So I'm not quite sure what to make out of the ADCOM..

Okay, and then just one question on the other development programs. Just with our test and veracity, I believe you'd indicated around the time that those trials were getting going that we could see enrollment starting to complete kind of in this timeframe. I just wanted to ask about enrollment progress with those and if you do see either of those trials perhaps completing enrollment by year-end or...

or what that timeframe is looking like. Yeah, so the timeframe still looks like data in the next year timeframe. And they're event-driven. And so enrollment's still consistent with that. But that's all I can say at this point.

Okay, great. Thanks for taking the questions.

Okay, great. Thanks for taking the questions. Thank you.

Our next question comes from Chris Howerton from Jefferies. Please go ahead.

Hey, good morning. Thanks for taking the questions. I guess two for me. One would be with respect to the FC2 and then Tadfi part of your business, what measures are you going to take in your own internal hub to kind of combat some of the challenges that your partner had for the telemedicine and I guess to give you confidence that that will be a sustainable business.

And then I guess I'm just curious if you can give us some more color around liquidity and your cash runway in a scenario where subisibulin is launched, what would be your cash needs to launch such a drug? And in a scenario where maybe there's a longer delay, how do you see your current cash reserves being deployed against your plan? Thank you.

Thank you for your questions. The first one on FC2 and that part of the business I'm going to answer and then I'm going to have Michelle answer the question on liquidity. As it relates to FC2, we've had two down quarters from the telemedicine market. We have two customers that...

in the telemedicine space that make up a significant portion of that revenue. And when they had a down year, we get to have a down year. If you look across telemedicine, you already know you can see that they're still going through some pains right now. With that said, I'm happy to report the way we're handling that to maximize our revenue is threefold. One is to...

to make sure we do everything in our power to help our partners. And I will tell you that the indications at this point is that whatever that hiccup was, these last two quarters...

is turning around, so they're figuring it out as well. And so our expectation is to see, you know, an increase in revenue, increase in orders, and and and whatever that new normal is, they're back, they get their back. So they've gone from, you know, struggling to headwinds to looks like they sort of figured it out. And again, time will tell, but it feels good that at least our main customers will get back, which means we'll start to see, you know, significant revenue.

What that means is you have to put all the components together. You have to have the doctors. You have to have the website. We have the product. And you have to have the ability to fill the prescription. And you have to have the ability to deal with insurance. And all that's in place. And what we're finding is there is a direct correlation between marketing spend and people buying the product and wanting the prescriptions. And so I'm happy to report that that looks incredibly viable.

and will really supplement the revenue going forward. And it took us about a year to put it together, but it's been pressure tested and now we're going to expand that. So, again, we're seeing an opportunity for revenue from that standpoint.

In TAFE's early days, because most of it has been trying to get insurance, Medicare, wholesaler contracts in place, because of the FDA wanting certain release criteria we didn't agree upon until later in the year, we really didn't have but a fiscal year, fourth quarter fiscal year 2022 is an opportunity to launch.

So a little behind there, but we'll try to do our best to make up. So the UREV is, you know, with $39 million in revenue this past year, you know, that's real money that our investors don't have to come up with that we can use to help invest and move our pipeline. As always You can irregular zoom to Monsieurbank.com or assistance under the

With that, I'll turn it over to Michelle to talk about liquidity in the event that we launched the business are you at?

Sure. So in the event we launched the Bizibulant, you know, I'd like to point out that our drug spend was around $70 million this year. And slightly over half of that was related to COVID. Our COVID trial included in that was over 60% of those costs were related to building up the fixes, not limited to demand not just to make sure that we're keeping.

the material to get our drug ready so that when we're ready to launch, we have the drug ready. You can see, as I noted, you know, we built a team, and so we have those expenses that ran through this past year in our fourth quarter. We built the team in the U.S. We've put all the vendor contracts in place.

We have the people up and going. We have our strategy ready to deliver. So from a liquidity standpoint, we've already invested in this drug, and we're ready to go. We're not going to be needing to get additional liquidity other than what we generate from our business. As Mitch indicated, you know, there's a lot of things that we're doing on the UREP side.

to get things up and going there and working on increasing some of those revenues.

in working on increasing some of those revenues. In the event.

that we don't want the COVID drug, you know, as the company, as we've demonstrated over the years, we're very good at managing our cash and managing and prioritizing all of our drugs under development. Those are the levers that we have to to work on is, you know, how quick we push different drugs through the trial.

and how much we can slow them down. So, you know, for us from a liquidity standpoint, we're looking good, you know, between our balance sheet and, you know, what we can get from UREVS and how we can manage our business. You know, liquidity is a concern for us, whether we launch the drug or if the drug isn't launched this year.

Thank you. That's wonderful. Thanks so much. Thank you. Thank you.

Thank you. That's wonderful. Thanks so much. Thank you.

Again, if you have a question, please press star, then one.

Our next question comes from Yi Chen from HC Wainwright. Please go ahead.

Thank you for taking my questions. When do you expect the FDA to issue its final decision on the EUA application? Do you think it could occur before the end of 2022?

I will tell you that, and you can appreciate this, I've given up on guessing when the FDA is going to make a decision. The FDA does what the FDA does and I just scratched my head because we're dealing with an agent that has an incredible mortality benefit. So I can't answer that question at all or give you any sense at all.

And this is true also for the other regulatory agencies. But what I can tell you is that they're all sincerely doing their work.

Okay, so for the fiscal fourth quarter, there appears to be a sharp decline in terms of revenue from FC2. So could you comment on the current trend of the US prescription for FC2 and how much revenue contributed?

revenue contribution you expect to get from the launch of Intadfate going forward? Could you also comment on whether the operating expenses will be on the same level as observed in the fiscal fourth quarter going forward?

Thank you. Yeah. So if you don't mind, I'm going to ask Michelle to answer those three questions. The first question being the FC2 decline, the second being related to the contribution, and the third related to operating expenses, relative contributions in TADFEE, and the third one is operating expenses. Like the color to the first question is...

We're already seeing the turnaround. So, you know, we believe that the fourth quarter is hopefully going to represent the bottom. And now with all these other levers of increasing revenue in place, plus seeing actual life coming back to telemedicine, you know, it feels like we're going to see more revenue. But I'll let Michelle answer. Michelle?.

Sure. You know, as Dr. Steiner indicated, yes, you know, we're working with our customers. We've added some customers this year, and we're projecting that we're going to be seeing a turnaround here. You know, the turnaround isn't instant, but the turnaround is coming.

public sector. You know, in the global public sector it's a matter of timing related to these tenders. Don't always know a strict cadence and agencies on when that happens. But right now the South Africa tender is, we're starting to see sales that are coming back under their newest tender. In TADB, we're going to slowly increase this...

Again, a lot of that is getting some of the back office infrastructure in place, and then it's to allocate some money and marketing dollars to spend to push that launch. And right now, as I indicated in discussing liquidity, we're managing our cash spend, and we're looking at the trade-offs in what we're doing with our cash spend.

and he brought on his team, all primarily in our fourth quarter.

all primarily in our fourth quarter of 2020.

So the increase in our SG&A expense in the fourth quarter is driven by building out that team. We've started now to build out an international team, but that's just starting. And so our operating expenses, if we go ahead with a launch...

are going to be closer to those expenses that you look at in the fourth quarter of this past fiscal year.

and to continue there and then to build as we build out a commercial team XUS.

Thank you.

Ladies and gentlemen, this concludes our question and answer session. I'd like to turn the conference call back over to Dr. Mitchell Steiner for any closing remarks.

I appreciate everyone who joined us on today's call and I look forward to updating you all on our progress at our next investor call. Thank you.

The digital replay of the conference call will be available beginning approximately noon Eastern Time today, December 5th by dialing 1-877-344-7529 in the US and 1-412-317-0088 internationally.

You will be prompted to enter the replay access code, which will be 4646397. Please record your name and company when joining. The conference call has now concluded. Thank you for attending today's discussion.

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