Veru Sells FC2 Condom Business For $18 Million, Focuses On Biopharma Pipeline

Veru Inc. (NASDAQ:VERU) shares jumped on Tuesday after the company disclosed the sale of its FC2 Female Condom (Internal Condom) business to clients managed by Riva Ridge Capital Management LP and co-investors for $18 million.

As a result of the FC2 business sale, Veru’s workforce will be reduced by approximately 90%, from 210 employees to 22.

After deducting the change of control premium to SWK Funding LLC under the company's Residual Royalty Agreement, along with customary transaction fees, Veru expects net proceeds of about $12.5 million, subject to post-closing adjustments.

Upon payment of the change of control premium, the Royalty Agreement, dated March 5, 2018, will terminate, and its liabilities, totaling $9.9 million as of September 30, 2024, will be eliminated.

Mitchell Steiner, Chairman, President, and Chief Executive Officer, said, “The monetization of the FC2 business allows Veru to be a pure biopharmaceutical company focusing its additional nondilutive resources on the execution and development of its promising late-stage clinical drug pipeline.”

“We are excited about the Company’s successful strategic evolution to the treatment of cardiometabolic diseases with a fully enrolled Phase 2b QUALITY clinical trial evaluating enobosarm to preserve muscle and augment fat loss for a higher quality weight loss in patients receiving WEGOVY, a GLP-1 receptor agonist. We are expecting topline clinical results for this study in January 2025.”

The company’s drug development program includes two late-stage novel small molecules, enobosarm and sabizabulin.

Sabizabulin, a microtubule disruptor, is being developed as a Phase 3 clinical trial for treating hospitalized patients with viral-induced ARDS. Meanwhile, the company does not intend to develop sabizabulin further to treat viral-induced ARDS until it obtains funding from government grants, partnerships, or external third-party sources.

As of June 30, 2024, VERU’s cash and equivalents stood at $29.2 million.

Price Action: VERU shares are up 29% at $0.8201 at the last check Tuesday.

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