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On Thursday, H.C. Wainwright reaffirmed their optimistic stance on Veru Inc. (NASDAQ:VERU), maintaining a Buy rating and a price target of $3.00. Currently trading at $0.65 with a market capitalization of $95 million, Veru has received a consensus Buy recommendation from analysts, with price targets ranging from $1 to $5. According to InvestingPro analysis, the stock currently appears fairly valued based on its proprietary Fair Value model.
The decision follows Veru's recent business transaction, which involved the sale of its FC2 Female Condom division to clients of Riva Ridge Capital Management LP for a total of $18 million. This strategic move has provided Veru with non-dilutive funds that are earmarked for advancing the clinical development of enobosarm, the company's leading drug candidate. InvestingPro data reveals that while Veru holds more cash than debt on its balance sheet, the company is quickly burning through its cash reserves, with a current ratio of 2.97x.
Earlier in the week, Veru had announced the divestiture of the FC2 business. The sale also included the transfer of Veru's subsidiaries in the United Kingdom (TADAWUL:4280) and Malaysia. As a result of these changes, the company's management has indicated that Veru's workforce will be significantly reduced by approximately 90%, dropping from 210 employees to just 22.
This streamlining of operations is occurring as Veru continues to progress with its clinical trials. The ongoing Phase 2b QUALITY trial of enobosarm, used in conjunction with Wegovy (semaglutide), is aimed at treating sarcopenic obesity. The company anticipates releasing topline data from this trial in January 2025. Additionally, Veru expects to publish results from a separate blinded Phase 2b extension trial within the second quarter of 2025.
The analyst from H.C. Wainwright has noted that positive outcomes from the QUALITY trial could be instrumental for Veru in securing a partnership. This would be a critical step before moving enobosarm into a pivotal stage of development for obesity treatment.
The reiterated Buy rating and price target reflect the firm's confidence in Veru's strategic direction and the potential of its lead drug candidate. InvestingPro subscribers have access to 12 additional ProTips and comprehensive analysis through the Pro Research Report, offering deeper insights into Veru's financial health, valuation metrics, and growth prospects.
In other recent news, Veru Inc. has witnessed significant developments. The company reported net revenues of $16.9 million for the fiscal year ending September 30, 2024, a 4% year-over-year growth that surpassed analyst projections. The net loss was $37.8 million, more favorable than the estimated loss of $40.6 million. H.C. Wainwright maintained its Buy rating on Veru shares, reflecting confidence in the company's financial outcomes and clinical developments.
The company's ongoing Phase 2b trial of enobosarm, aimed at preventing muscle loss and promoting fat loss, is progressing as planned. Veru management expects to release topline data for the primary endpoint of lean body mass in January 2025. Additionally, results from a separate blinded Phase 2b extension trial are anticipated in the second quarter of 2025.
Veru has made notable strides in its corporate developments. The company amended the forbearance and payment terms of its loan agreements with Onconetix, Inc., and added Loren Mark Katzovitz to its Board of Directors. However, the company has been notified of potential delisting from Nasdaq due to non-compliance with the exchange's minimum bid price rule. Analysts from Oppenheimer maintain a positive outlook for Veru, while Jefferies revised its price target for the company, maintaining a Hold rating.
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