Conference Transcript - VERU 2026-02-26

Leland Grishel, Analyst — Oppenheimer

Great. Thank you, and thanks for joining us here at Oppenheimer's 36th Annual Healthcare Life Sciences Conference. I'm Leland Grishel, one of the analysts with the biotech equity research team at the firm, and we're delighted to have with us as our next presenting company, Veru, which is a public company. That is the ticker, V, running through a slide presentation, and we may have time at the end for a few questions. Please feel free to put any of your own through the portal, and we will do our best to include those. So, without further ado, I'll hand the microphone off to Mitch.

Mitchell Steiner, CEO

Great. Thank you, Leland. I appreciate it. Thank you, everybody, for being on our presentation. First of all, we're making forward-looking statements. I refer you to the risks that are summarized in our 10K and recent 10Q. you. Viru had done a hard pivot, taking one of our exciting drugs, the Novus Arm, and putting it together with the GLP-1. We had a positive Phase 2B quality study, which I'll briefly talk about. Most of the time, I would like to spend and talk about the study that will start this month, excuse me, start in this quarter, which is the Phase 2B plateau study, not the Phase 2B quality study. So here's the issue. We've been one of the companies that have been focusing on what we think loss of muscle. As you know, with GLP-1s, you can lose between 40 and 50% of lean mass. That may be fine for a 32-year-old linebacker, but for an older patient over the age of 60, that can be detrimental, such as causing poor balance, decreasing gait, functional limitations, falls, and fractures, higher hospitalization rates, and increased mortality. So we're trying to avoid that. How do you get the benefits, the cardiovascular benefits, without some of the problems? And the agent under investigation is a novus arm, previously called Osterine. It's a non-steroidal selective angio-receptor modulator. This has been one that has gone through 27 clinical trials. Six of the clinical trials had muscle endpoints, and without question, this is an agent that can be an agonist, a partial agonist, or antagonist, which means it has tissue selectivity. But what we know that's relative to the GLP-1 issue is that it improves muscle mass and physical function, independently breaks down fat, stops fat from forming, and also, again, again, from the name Osterine, increases bone mineral density, and I think that's pretty exciting given that's a problem with the GLP-1s, and it's well tolerated. The first study we did, again, in a backdrop, put it in context, there were no data in what happens when you combine an anabolic agent like an Obusarm with a GLP-1, and so we need to understand that first, and while we were trying to understand this, the agency also have made very clear, please focus on functional endpoints, not just whether you preserve muscle or burn more fat, but how does a patient feel, survives, and functions is what they're interested in. So the study was designed as a short study, 16 weeks, looking at GLP-1 starting for the first time with GLP-1, three milligrams of Novus arm, six milligrams of Novus arm. And we did that for 16 weeks. Why 16 weeks? Because in our previous muscle studies, we showed that we should be able will show functional benefit. And we did. So that was the appropriate time. And then we stopped at GLP-1 because one of the things we heard is you get this rapid weight regain. And the question, of course, is can we prevent that rapid weight gain? And we saw with the three milligram, we were able to. So this was a successful study. Again, I might spend most of the time on a new study, but suffice it to be, we preserved lean mass, we increased the fat loss, body weight change was similar in spite of the retention or preservation of lean mass. And the weight that was lost was 100% adiposity, which is important because 100% fat is what you want out of a weight loss drug. And as you think about new generation drugs in combination with GLP-1s, you want something that will complement the GLP-1, provide something that GLP-1 is either causing a problem that it's not addressing, and that's what makes Enobus Arma a great complement to GLP-1. Now, with that said, if you look at the patients with BMI greater than 35, which means they had a lot more weight to lose, we did see incremental weight loss, and a higher proportion of patients with Enobus Arma 3 achieved greater or equal to 5% weight loss, and this was done in the background of preservation of lean mass of 84%. So weight loss is possible if you'll retain muscle. Now, with that also said, function is important, and there's been a lot of, not controversy, but understudied, incompletely studied patient populations with the GLP-1. And if you focus on the older patients, again, remember, these are the patients who are going to show a problem. If there's a problem, we see a problem. And what we saw with somagletype plus placebo, if you were able to see that if you'd use a cutoff, a greater than 10% physical decline on stair climbing, which has implications because stair climbing power portends problems with falls and fractures and mortality. And we picked 10% because that represents about greater than seven years of power loss with aging. We're asking, can that happen in 16 weeks? And we saw about 44% of patients on somacritide alone had a greater than 10% decline and were able with the nobus arm to prevent that. And so that is a big step because, one, it shows we have a problem, and second, it shows that we have a solution to the problem. The drug is well-tolerated, as it has been in all the other clinical studies we've done. We do have a unique selective angio-receptor modulator that continues to show good safety. So we go to the FDA. You know, the FDA's mindset is evolving, particularly the obesity division. And they came back and said, basically, as you think about your next steps, incremental weight loss could be a primary endpoint for approval. And if you hit at least 5% or greater, that alone can serve for approval, for efficacy. Alternatively, if you have less than 5% incremental weight loss with a combination of a Novus I'm in a GLP-1 versus a GLP-1, then if you show clinically significant positive benefit, such as preservation of physical function, in combination with GLP-1, that could be approvable. So on the basis of that, we're very, very excited because that means the FDA has expanded their thinking in terms of how a body composition drug could be potentially approved through a regulatory pathway with regulatory clarity. Now, with that said, we also heard in December, and this is a general announcement by the FDA, that the FDA now considers total hip bone mineral density, which you measure by DEXA, as a surrogate endpoint for osteoporosis drug development. In other words, BMD, bone mineral density, 24 months, can be used instead of a fracture study, particularly in postmenopausal women with osteoporosis. So this opens up another avenue for us as a body composition drug, because both semagnotide to his appetite, have been reported to cause bone loss of the lumbar, spine, and hip. In fact, the Regovi label has highlighted, based on the SELECT trial, that in women, female patients, there was a five-fold increase in hip fractures and pelvic fractures. In patients over 75, it was a four-fold increase. So it matters. And as I mentioned, the Novus arm is a very unique agent. It's anabolic to cortical bone. It's anti-resorptive. So it's got a dual function of both stimulating osteoblasts and inhibiting osteoclasts. And in our published models, it shows it increases bone mineral density. So the question is now, where do you go? What are you going to do? So the thinking for us is there's still some major problems. The first problem, and this just came out again over the last 18 months or two years, is that GLP-1s work until they don't work. meaning that you take them and you hit what's called a weight loss plateau where you're not losing any additional weight. In this slide, this is a select study. At about a year, you hit about 10% weight loss. And for the next 3.25 years, you're still at 10% weight loss. And so there is a problem. And we believe the central reason for that problem is the fact that in addition to losing fat, you can lose all the fat in your body, but you can't lose muscle. And if you keep losing too much muscle, the body's going to respond to that by causing you to increase calories. And the only way you can keep it the same weight is to increase additional calories. And so is there a way to break through that plateau? And the answer is you can break through the plateau if you can hold on to muscle because muscle burns calories. And if you don't get signals from muscle telling your brain to eat because you depleted muscle, that could be interesting. Now, the plateau is not just the problem. The problem is when the plateau happens. So the plateau happens in about a year. Well, about a year, and this is a terseptide, you'll see about two-thirds of the patients still have what's classified as BMI of 30 or greater, which is just still obese. And in fact, if you look at patients that start with BMI of 35, almost all those patients on average are still obese and have a drug that won't lose any more weight. So this is a problem. So when you look at the, quote, problems that we can address with Novosarman combination with GLP-1 is you can address the non-selective weight loss, so you're losing only fat, muscle in older patients you want to preserve. The weight loss plateau, almost 90% of patients will hit. Unfortunately, if your BMI is greater than 35, you will have persistent obesity, from which the GLP-1 will not help, and it becomes an unmet need. So you need a therapy that with a combination of a GLP-1 can preserve muscle and function and cause you to lose only fat. So this is the study. This is the plateau study, clinical study. This will initiate this quarter, as I mentioned. It's a study that's designed to essentially match a phase three program so that when we're done at the end of it, we'll be able to understand what path to take forward, which I'll get to in a moment. With that said, the patient population is greater than 35 BMI, so the patients have more weight to lose. The non-diabetics, age is greater than 65. This is a big patient population. About 44 million Americans are a party of Medicare over the age of 65, and about half of them can benefit from weight loss drugs. This is a massive market. The plan is to randomize these patients to either semaglutide alone or semaglutide 3 milligrams, and this is a study that goes on for 68 weeks, 16 weeks to titrate up to the maintenance dose and 52 weeks at the maintenance dose. There'll be an interim look at 34 weeks, looking at lean body mass, which you almost always hit, and fat mass at 34 weeks. We chose semaglutide because, as you know, semaglutide has an oral form now, so semaglutide does not have an oral form. So we're using injectable semaglutide here, but the information that we learned from this study can bridge easily to an oral semacritide in a phase three setting. And the primary endpoint is total body weight, but we're going to be heavy on the functional endpoints, which we've de-risked from the previous program, the quality study. And that's stair climb tests, physical function PROs, mobility disability assessments, and of course, measuring body composition and bone mineral density. And we're very fortunate Dr. Stephen Himesfield, who was the PI for the quality study, has agreed to return to the PI for the PLATO study. And he's a very prominent and well-respected individual in the field. So this study will start this quarter, and we're on track for that to happen. What is the evidence that we have that we're going to see incremental weight loss? Let's put With that aside, in other words, I have to address that directly. Well, first of all, if you look at the BMI gradient 35, as I showed you, we do see incremental weight loss in patients that have the ability to lose more weight. And that's why in our study, we're picking patients with BMI gradient 35. And so that's number one. Number two, if you look at obese patients taking testosterone, which uses the same receptor that Enobus Arm uses, you don't see a plateau. What you see here in obese patients, even with a normal diet or whatever they want to eat, they'll lose weight on something that stimulates the angina receptor. And almost 5% of year one, 10% of year two. But what you notice is a straight line down. You don't see a plateau. So that tells you that if you preserve muscle, that may be the secret to breaking through the plateau So you can actually lose more weight in patients that have more weight to lose. So you have fewer patients that are still obese at the end of a year. But we've seen some of this in a phase three that was done in cancer patients. Why are you picking cancer patients? Cancer causes unintentional weight loss, kind of like a GLP-1. And you see in three months, lean body mass goes down tremendously in these patients. these are patients that present with obesity. You have to look at obese patients to see what's happening to weight loss. And then the total fat mass goes down. But what's most important is by five months, there's about minus 4.5% incremental weight loss. So we actually see with a nobosome monotherapy in obese patients in this population, weight loss. And interestingly, our competitors, Scalarock, Regeneron, and Lilly have also presented their data. And it's very instructive. These are my stat inhibitors, all injectables. We're in oral, and we believe that everything equal, oral will be better, but put that aside. And what you'll see is that we had 100% lean mass preservation, but if you go long enough, like the Regeneron and Scala Rock at six months didn't really show significant incremental weight loss, but the Vesana study, Lily's study, showed at 72 weeks, 6.4% greater weight loss. So the longer you leave muscle, metabolically active tissue that burns calories, the more weight you're going to see and lose. And plus, we saw with our own study, and this is the second part of the quality study, that if you stop the GLP-1 and you treat with an ozone monotherapy, what we saw is the first thing we saw is that it stopped the regain by about 46 percent. So if the patients lose about 11.88 pounds in the placebo GLP-1, and they stopped the GLP-1 for 12 weeks, that they gained five pounds. So they got 43 percent regain. And Inovus arm was able to stop that by 46 percent. But the weight that was gained in Inovus arm was muscle, and it continued to burn fat. In fact, it burned so much fat that when you look at the 28 weeks, which is the end of the study, you'll see that about 6.28 pounds was totally lost by placebo and 8.8 pounds by nose arm three and 10 pounds by nose arm six. So you do see incremental fat loss over time. So what does this all mean for this study and why am I excited about the study that we're doing? I think the study that we're doing to be incredibly informative because there's multiple ways to go forward. So we're starting out in the plateau study with obese patients with greater and equal BMI of 35, and they're non-diabetics, and their age is greater than 65, and they're starting at GLP-1 for the first time, this time it's the magnetite. And if you follow the regulatory discussions publicly and privately, you'll see that if your incremental weight loss is greater than 5%, then the Phase III study that we would do, it would be a primary endpoint of total body weight, probably all patients, with a secondary endpoint pre-specified in the older patients with physical function and sarcopenic obesity and mobility disability, in other words, function, and then BMI. Is the ergomental weight loss less than 5% in the Phase IIb study? Then we have two options. The first option is to do a primary endpoint of physical function. Just like the FDA said, physical function is a primary endpoint if it's clinically meaningful in the patient population. And we show that in sarcopenic obese patients greater than age of 65 with a mobility disability. They can benefit from a muscle preservation drug. More importantly, and much more importantly, they're at the highest risk of having trouble with absolute muscle loss. And then the secondary endpoint, which would be a pre-specified subgroup, would be BMD in postmenopausal women. Alternatively, an endpoint that has now become available with the FDA validating BMD as an endpoint, that's very interesting. If we see significant BMD changes in our phase 2b study, then one option is obesity and osteoporosis, where the primary endpoint is bone mineral density. Not a fracture study, which is a large, but it will potentially be a much smaller study looking at BMD as a new path forward for approval. So essentially, there's different ways to chip this patient population to get a body composition drug forward. Now, where do we stand on our balance sheet? With cash, we just announced we have $33 million of cash as of December 31st, 2025. And in terms of a timeline, we're right on track. So for the obesity program, the plateau study is set to start in first quarter. So, this quarter of 2026, expect enrollment to be completed by third quarter of 2026. The interim look will be in first quarter of 2027. And now I'm guiding that our Phase 2B Plateau study top-line data will be available Q4 2027. So, a busy year and a half coming up with the new flow. And we put this well ahead of our competitors in answering the critical questions on how a drug in combination with a GLP-1, such as a Novozarm, has multiple paths forward from a regulatory standpoint. So this concludes my prepared comments, and I'll be more than happy to answer any questions.

Leland Grishel, Analyst — Oppenheimer

Yeah, that's great. Thank you so much, Mitch, for the update and the overview. So, you know, interesting, one thing I caught during your prepared remarks was that kind of, you know, any of these muscle sparing agents will eventually lead to weight loss. But as a corollary to that, should we take that Anobis arm itself has, it's a separate weight loss promoting effect and therefore should be advantageous over the others in that domain? Is that a fair statement or, yeah?

Mitchell Steiner, CEO

statement. I think it makes sense that we're going to see incremental weight loss. And the reason it makes sense is because we're holding on to the muscle. People say, oh, muscle, muscle weighs more than fat. By the way, muscle is only 12% difference in fat. So it's a 2% difference. So it's not a lot. So they're very comparable. But with that said, in this setting, With 84% preservation of lean, you have incremental weight loss, and you have 47% of your placebo somatic type group hitting a greater than 5% weight loss at 16 weeks. And you see 65% with the Novosar. Point being is you held on the muscle, and you're still burning more fat and losing more weight. And that makes sense. So if you think of muscle as being that pivotal tissue that's going to determine not only how you feel and function, but also could play a role in the weight loss and maybe can play and should play a role in stopping the mixed messages that the brain is getting to cause the plateau, the weight loss plateau. You got a GLP-1 that's very effective to shut down appetite, but that's getting overridden by whatever they call the metabolic set point. I think one of those things that contribute to the metabolic standpoint are myokines, things that are made by the muscles that I'm not going to let you starve me to death so you have to eat. Take care of the muscle problem, one less signal, and potentially you can see multiple ways where incremental weight loss could happen. With that said, the combination with incremental weight loss just allows us to also bring in the physical function. and that's why we're spending a lot of time in physical function in BMD, because then what you can envision is your primary endpoint being incremental weight loss, but your secondary endpoints being very, very important, because you can't claim muscle preservation without showing what it means. So we have a function endpoint or functional limitation benefit, and then a bone benefit. This can be very interesting. Got it. Okay, that's very helpful. And if you wouldn't

Leland Grishel, Analyst — Oppenheimer

mind skipping back down to one of the more recent last slides, which had the kind of the tripartite kind of options, you know, kind of plus or minus 5% weight loss. You had to like the BMD boxes and the, there we go. Yeah, yeah, yeah. So this is everything. So just to be clear, have you finalized your primary endpoint analysis for the plateau study, right? That's right.

Mitchell Steiner, CEO

And we've also analyzed the analysis for these other endpoints as well. So these endpoints are all going to be measured. And the whole idea is, again, be able to use these to help us understand what's the patient population. Let me pause a moment because this is a very important point. I'm going to let you in a little secret. We went to the FDA. They told us, I fit in this category. being over 60 years of age, it's not a disease. 60 years older, it's not a disease. The point being is that you can't pick an older patient population and say that's your population. Your population will be older patients with obesity and muscle loss and functional loss, bone loss. So if you look at how we're laying out our program is we're trying to pre-specify, if you look at the regs, for the obesity rates. You're allowed to treat everybody, but if you want a special claim, then the claim has to be in a patient population that's at risk and that has a disease. So, for example, a patient population that has sarcopenic obesity is a patient population with a mobility disability, meaning they've already demonstrated they're having trouble with function. a postmenopausal woman with osteoporosis and obese, knowing that they're going to be taken. A medicine that will confound their obesity and a select trial showing a five-fold increase in hip and pelvic fractures. That's your patient populations that could come out of this study. And if I had to predict, it's not going to be one, it's going to be many of these. Because as a body composition drug, we affect muscle, we affect fat, we affect bone, affect weight. then we're going to be able to, in a phase three setting, pre-specify these patient populations

Leland Grishel, Analyst — Oppenheimer

with phase two data. Yeah. Okay. So I guess, you know, so when you come to the top line readout from plateau, right, I guess the market will sort of have to, you know, because one might say that, you know, the market could be disappointed if you don't show 5% weight loss. However, However, I think people need to keep in mind that you have optionality as to your registration program.

Mitchell Steiner, CEO

I think that's what you have to look at. In other words, you have to say to yourself, we're not another Incretan. We're just not. I mean, look what happened to Karji Sema. Karji Sema was two Incretans, an Amalyn and a GLP-1. They add them together. They get incremental weight loss, and they're playing the game of quantity. And we're not a quantity game. This is a quality game. And if we hit quantity, I mean, I would argue that if we have another situation where 25 percent, Lily's at 25 percent, everybody's at 25 percent, that's not going to distinguish you in the marketplace. What's going to distinguish you in the marketplace, I'm 25 percent, but I build bone. 25 percent, I preserve muscle. I'm 25 percent, I improve physical limitations to prevent physical issues. issues. So I think when you think of the next generation of drugs, just like in any area of medicine, I like to use the example of hypertension. If you have hypertension, you give somebody a calcium blocker, and at the end of the year, the good news is the blood pressure is down, but the bad news is they still have hypertension. You don't come back and say, okay, I'm going to give them another calcium blocker and make a combination of a calcium blocker with a calcium blocker. You pick an asymptote. You pick something with a different mechanism. So The combination therapy has to be thought through more on the quality side than the quantity side, because that's why we're spending so much time understanding what could be the secondary claims, because the secondary claims is what's going to be – you can only claim one primary point, right? So the primary point is your obesity product, you're going to handle obesity. Got it. But if you can preserve function and you can preserve bone and address some of the safety issues that happen in this special population being older patients, that could be interesting.

Leland Grishel, Analyst — Oppenheimer

So this should begin enrollment very soon. Are there any gating factors to getting the first patient in?

Mitchell Steiner, CEO

Nope, everything's on track.

Leland Grishel, Analyst — Oppenheimer

All right, very good. And just, you know, to review on the IP side, because, you know, people sometimes ask, you know, this compound's been around for some time. If you could remind us of your protections for exclusivity for an opazone.

Mitchell Steiner, CEO

The protection is we have multiple layers of protection. The first one is a new chemical entity. It's never been approved for anything before, so there's not something on the market that you can just grab and substitute. And so with that saying, you get five years of market exclusivity from your approval. We do have Composition Matter runs out in 2029, but you can add five years of patent protection and patent extension. into the case of 2034, but we have about four or five method of fuse patents, and these method of fuse patents will begin to start reading out, meaning we should start hearing from the patent office, and once we start hearing from the patent office with the combination of a Novosarm with any of the GLP-1s, that'll take us to 2044, but as you know, we also decided to, for the phase three program, a commercial, use a novel formulation of a Novosarm And this novel 3D-printed formulation has potential protection to 2046. So I think we have enough picket fences around this compound. And I think it's a good thing it hasn't been approved for anything else because now it's a clean way forward for what I think is an indication it didn't even exist when we first started thinking about frailty. And now we have accelerated frailty with the GLP-1s causing accelerated frailty. So it's a perfect indication for a perfect drug.

Leland Grishel, Analyst — Oppenheimer

Yeah, excellent, good. We look forward to seeing your progress with Plateau, hearing on, you know, how enrollment there moves along, top line, I think you said the interim is going to be in Q1 of 27, is that right? And then, yeah.

Mitchell Steiner, CEO

2027, and full data set should be available Q4 of 2027.

Leland Grishel, Analyst — Oppenheimer

End of 27, perfect. Okay, well, thanks again, Mitch, and thank you all for joining us in this session. Please enjoy the rest of the conference.

Mitchell Steiner, CEO

Thank you. Thank you.