Cases
Veru Inc.
Corporate Governance / Derivative
Overview
Overview
- Date:
- 12/14/2023
- Company Name:
- Veru Inc.
- Stock Symbol:
- VERU
- Class Period:
- FROM 5/11/2022 TO 11/9/2022
- Status:
- Filed
- Filing Date:
- 12/5/2022
- Court:
- U.S. District Court: Southern Florida
Bragar Eagel & Squire, P.C., a nationally recognized shareholder rights law firm, is investigating potential claims against Veru Inc. (NASDAQ: VERU) on behalf of long-term stockholders following a class action complaint that was filed against Veru on December 5, 2022 with a Class Period from May 11, 2022 to November 9, 2022. Our investigation concerns whether the board of directors of Veru have breached their fiduciary duties to the company.
Veru is primarily an oncology-based biopharmaceutical company that develops drugs for the management of breast and prostate cancers. Veru also develops medicines forCOVID-19 and other diseases related to viral and acute respiratory distress syndrome (“ARDS”), and has two FDA-approved products for sexual health.
Veru “opportunistically” developed sabizabulin (VERU-111), an orally administered “microtubule disruptor” – a drug that inhibits a virus’ ability to replicate itself – for the treatment of COVID-19 in hospitalized patients at high risk for ARDS. Veru had originally developed sabizabulin with the intention of using it as a treatment for prostate cancer. In January 2022, however, the FDA granted Veru’s COVID-19 program Fast Track designation. At the time, there was no authorized or approved treatment for hospitalized patients with severe COVID-19 infections.
According to the filed complaint, throughout the Class Period, Defendants made false and/or misleading statements, as well as failed to disclose material adverse facts about the data from the sabizabulin Phase 3 trial and the Company’s interactions with the FDA. Specifically, Veru misled its shareholders to believe that the data from the Phase 3 trial was sufficient to support Emergency Use Authorization (“EUA”) and even the submission of a New Drug Application (“NDA”) without any further studies. VERU’s filings therefore concealed the true risks faced by the Company in gaining approval for its EUA request.
Veru conducted a randomized, double-blind Phase 3 trial of sabizabulin’s effectiveness in treating hospitalized adults with moderate to severe COVID-19 at high risk for ARDS. The Phase 3 study sought to enroll 210 patients and evaluate mortality after 60 days of treatment.
On April 11, 2022, Veru issued a press release announcing that the company would be terminating sabizabulin’s Phase 3 trial early on the basis of positive interim data, after Veru’s Independent Data Safety Monitoring Committee conducted an interim analysis of the first 150 patients randomized into the study. Veru reported that sabizabulin “resulted in a clinically and statistically meaningful 55% relative reduction in deaths” relative to the placebo group (45% mortality at 60 days for the placebo group vs. 20% mortality for the sabizabulin-treated group).
On an investor call held that same day, Veru’s Chairman, President, and Chief Executive Officer Mitchell Steiner, M.D. (“Steiner”) told investors that Veru had been in “constant dialogue with FDA” since receiving the Fast Track designation and that the Company “plan[ned] to meet with FDA to discuss the next steps” including submitting an application for Emergency Use Authorization (“EUA”) on the strength of the positive Phase 3 interim results. Steiner also addressed the placebo group’s 45% mortality rate, stating that this death rate “underscores how sick these patients really are.”
During the call, an analyst from Cantor Fitzgerald asked Steiner to “elaborate” on any differences in the standard of care between the placebo group and the sabizabulin-treated group in the Phase 3 trial. Steiner responded: “So, there are no imbalances with males and females and with standard of care is exactly – I mean, the system works, so the randomization works. So, there are no imbalances.”
Veru’s share price more than doubled on April 11, 2022, from an opening price of $5.99 per share to a closing price of $12.28.
On May 2, 2022, Veru announced that the FDA had granted the Company a preEUA meeting to discuss sabizabulin’s Phase 3 results, to be held on May 10, 2022.
On May 11, 2022, Veru issued a press release announcing that in the May 10, 2022, pre-EUA meeting, the FDA “agreed that the efficacy and safety data from the completed Phase 3 clinical study in hospitalized COVID-19 patients at high risk for acute respiratory distress syndrome are sufficient to support the submission of a request for Emergency Use Authorization (EUA).” The press release quoted Steiner as saying “The discussion with FDA in the Pre-EUA meeting has established a direct path forward to expedite the availability of sabizabulin to the high risk hospitalized patients with COVID-19 . . . In the Phase 3 COVID-19 clinical study, sabizabulin demonstrated a clear mortality benefit in hospitalized moderate to severe COVID-19 patients on current standard of care with no significant safety signals.”
The May 11, 2022 press release further stated that the FDA had “agreed that the current safety data available for sabizabulin is sufficient to support the safety portion of a request for EUA submission,” and that “additional safety data that would be collected during the use of sabizabulin under the EUA, if granted, will be sufficient to support an NDA submission, and furthermore, that no additional safety clinical studies are required.” Veru’s stock price rose from its closing price of $7.79 per share on May 10, 2022, the day of the pre-EUA meeting with the FDA to close at $13 per share on May 13, 2022 the day after Veru filed its 2022 Second Quarter 10-Q in which it reported on the results of its pre-EUA meeting with the FDA.
On June 7, 2022, Veru submitted an EUA request with the FDA for use of sabizabulin to treat COVID-19.
On September 7, 2022, the FDA scheduled an October 6, 2022 meeting of the Pulmonary-Allergy Drugs Advisory Committee (“AdCom”) to vote on whether sabizabulin should be granted EUA. Although AdCom recommendations are not binding, the FDA ordinarily follows them.
On September 19, 2022, it was announced that the FDA had postponed the AdCom meeting to November 9, 2022.
On August 11, 2022, Veru filed its Quarterly Report for the second quarter of 2022 on Form 10-Q with the SEC, which stated that during the May 10, 2022 pre-EUA meeting, the FDA had “agreed that no additional efficacy studies were required to support an EUA application or a new drug application (NDA)” for sabizabulin, that “no additional safety data was required,” and that “[t]he FDA agreed that the request for the EUA is supported by efficacy and safety [data] from our positive Phase 3 COVID-19 study . . . and no additional clinical trials are required to support an NDA submission.”
On November 9, 2022, the AdCom voted against granting Veru’s EUA request by an 8-5 margin. One AdCom member who voted against approval explained that there was “no direct evidence to support [sabizabulin’s] antiviral activity.” Veru’s stock price plummeted on the news, falling from its closing price of $15.01 per share on November 8, 2022 to close at $6.97 per share on November 10, 2022, a 54% one-day drop, wiping out over $640 million in market capitalization.
As a result of Defendants’ wrongful acts and omissions, and the precipitous decline in the market value of the Company’s securities, Plaintiff and other Class Members have suffered significant losses and damages.
If you are a long-term stockholder of Veru, have information, would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Brandon Walker or Marion Passmore by email at investigations@bespc.com, by telephone at (212) 355-4648, or by filling out the form below. There is no cost or obligation to you.
Veru is primarily an oncology-based biopharmaceutical company that develops drugs for the management of breast and prostate cancers. Veru also develops medicines forCOVID-19 and other diseases related to viral and acute respiratory distress syndrome (“ARDS”), and has two FDA-approved products for sexual health.
Veru “opportunistically” developed sabizabulin (VERU-111), an orally administered “microtubule disruptor” – a drug that inhibits a virus’ ability to replicate itself – for the treatment of COVID-19 in hospitalized patients at high risk for ARDS. Veru had originally developed sabizabulin with the intention of using it as a treatment for prostate cancer. In January 2022, however, the FDA granted Veru’s COVID-19 program Fast Track designation. At the time, there was no authorized or approved treatment for hospitalized patients with severe COVID-19 infections.
According to the filed complaint, throughout the Class Period, Defendants made false and/or misleading statements, as well as failed to disclose material adverse facts about the data from the sabizabulin Phase 3 trial and the Company’s interactions with the FDA. Specifically, Veru misled its shareholders to believe that the data from the Phase 3 trial was sufficient to support Emergency Use Authorization (“EUA”) and even the submission of a New Drug Application (“NDA”) without any further studies. VERU’s filings therefore concealed the true risks faced by the Company in gaining approval for its EUA request.
Veru conducted a randomized, double-blind Phase 3 trial of sabizabulin’s effectiveness in treating hospitalized adults with moderate to severe COVID-19 at high risk for ARDS. The Phase 3 study sought to enroll 210 patients and evaluate mortality after 60 days of treatment.
On April 11, 2022, Veru issued a press release announcing that the company would be terminating sabizabulin’s Phase 3 trial early on the basis of positive interim data, after Veru’s Independent Data Safety Monitoring Committee conducted an interim analysis of the first 150 patients randomized into the study. Veru reported that sabizabulin “resulted in a clinically and statistically meaningful 55% relative reduction in deaths” relative to the placebo group (45% mortality at 60 days for the placebo group vs. 20% mortality for the sabizabulin-treated group).
On an investor call held that same day, Veru’s Chairman, President, and Chief Executive Officer Mitchell Steiner, M.D. (“Steiner”) told investors that Veru had been in “constant dialogue with FDA” since receiving the Fast Track designation and that the Company “plan[ned] to meet with FDA to discuss the next steps” including submitting an application for Emergency Use Authorization (“EUA”) on the strength of the positive Phase 3 interim results. Steiner also addressed the placebo group’s 45% mortality rate, stating that this death rate “underscores how sick these patients really are.”
During the call, an analyst from Cantor Fitzgerald asked Steiner to “elaborate” on any differences in the standard of care between the placebo group and the sabizabulin-treated group in the Phase 3 trial. Steiner responded: “So, there are no imbalances with males and females and with standard of care is exactly – I mean, the system works, so the randomization works. So, there are no imbalances.”
Veru’s share price more than doubled on April 11, 2022, from an opening price of $5.99 per share to a closing price of $12.28.
On May 2, 2022, Veru announced that the FDA had granted the Company a preEUA meeting to discuss sabizabulin’s Phase 3 results, to be held on May 10, 2022.
On May 11, 2022, Veru issued a press release announcing that in the May 10, 2022, pre-EUA meeting, the FDA “agreed that the efficacy and safety data from the completed Phase 3 clinical study in hospitalized COVID-19 patients at high risk for acute respiratory distress syndrome are sufficient to support the submission of a request for Emergency Use Authorization (EUA).” The press release quoted Steiner as saying “The discussion with FDA in the Pre-EUA meeting has established a direct path forward to expedite the availability of sabizabulin to the high risk hospitalized patients with COVID-19 . . . In the Phase 3 COVID-19 clinical study, sabizabulin demonstrated a clear mortality benefit in hospitalized moderate to severe COVID-19 patients on current standard of care with no significant safety signals.”
The May 11, 2022 press release further stated that the FDA had “agreed that the current safety data available for sabizabulin is sufficient to support the safety portion of a request for EUA submission,” and that “additional safety data that would be collected during the use of sabizabulin under the EUA, if granted, will be sufficient to support an NDA submission, and furthermore, that no additional safety clinical studies are required.” Veru’s stock price rose from its closing price of $7.79 per share on May 10, 2022, the day of the pre-EUA meeting with the FDA to close at $13 per share on May 13, 2022 the day after Veru filed its 2022 Second Quarter 10-Q in which it reported on the results of its pre-EUA meeting with the FDA.
On June 7, 2022, Veru submitted an EUA request with the FDA for use of sabizabulin to treat COVID-19.
On September 7, 2022, the FDA scheduled an October 6, 2022 meeting of the Pulmonary-Allergy Drugs Advisory Committee (“AdCom”) to vote on whether sabizabulin should be granted EUA. Although AdCom recommendations are not binding, the FDA ordinarily follows them.
On September 19, 2022, it was announced that the FDA had postponed the AdCom meeting to November 9, 2022.
On August 11, 2022, Veru filed its Quarterly Report for the second quarter of 2022 on Form 10-Q with the SEC, which stated that during the May 10, 2022 pre-EUA meeting, the FDA had “agreed that no additional efficacy studies were required to support an EUA application or a new drug application (NDA)” for sabizabulin, that “no additional safety data was required,” and that “[t]he FDA agreed that the request for the EUA is supported by efficacy and safety [data] from our positive Phase 3 COVID-19 study . . . and no additional clinical trials are required to support an NDA submission.”
On November 9, 2022, the AdCom voted against granting Veru’s EUA request by an 8-5 margin. One AdCom member who voted against approval explained that there was “no direct evidence to support [sabizabulin’s] antiviral activity.” Veru’s stock price plummeted on the news, falling from its closing price of $15.01 per share on November 8, 2022 to close at $6.97 per share on November 10, 2022, a 54% one-day drop, wiping out over $640 million in market capitalization.
As a result of Defendants’ wrongful acts and omissions, and the precipitous decline in the market value of the Company’s securities, Plaintiff and other Class Members have suffered significant losses and damages.
If you are a long-term stockholder of Veru, have information, would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Brandon Walker or Marion Passmore by email at investigations@bespc.com, by telephone at (212) 355-4648, or by filling out the form below. There is no cost or obligation to you.
The individual or institution below (“Plaintiff”) has reviewed and agrees to the Bragar Eagel & Squire, P.C. (“BESPC”) retainer agreement and authorizes BESPC to prosecute an action on Plaintiff’s behalf under the federal securities laws or applicable state laws to recover damages on behalf of investors in Veru Inc.. BESPC will prosecute the action on a full contingency basis and will forward all costs and expenses.
Case Updates
Retainer Agreement
This will confirm that you have retained Bragar Eagel & Squire, P.C. (“BESPC”) to represent you in connection with potential litigation against Veru Inc. (the “Company”) and its directors and officers. BESPC has conducted an investigation and believes that there is a valid basis to assert claims against the Company and its directors and/or officers for breach of fiduciary duties and other applicable laws.
In making this agreement, BESPC is relying upon your representation that you held the Company’s shares during the period from 5/11/2022 to 11/9/2022 (the “Relevant Period”) and that you continue to hold Company shares. Please provide us with documentation of your trading history in the Company’s stock by emailing a relevant copies of your brokerage statements to investigations@bespc.com. If you have any questions or need assistance, please call us at (212) 308-5858.
The terms under which we will represent you and your responsibilities as a potential representative plaintiff are set forth below.
You will have an obligation to remain knowledgeable about the litigation and participate in decisions concerning the progress of the litigation. If BESPC is appointed as lead counsel or in a similar capacity in the action, we will provide you with copies of all pleadings in the litigation for your review and approval, circumstances permitting, before they are filed with the court. BESPC will also promptly advise you of any significant developments in the litigation.
As a representative plaintiff, you cannot have any interest antagonistic to or in conflict with other shareholders or the Company concerning the claims we are pursuing or any relationships with any of the named defendants that would in any way impair your ability or incentive to obtain the best possible result. You agree that neither you nor any of your affiliates or agents will trade stocks while in the possession of any material non-public information you may receive in connection with the litigation. In addition, as a representative plaintiff, you may be required to continue holding Company shares. Please contact us before buying or selling Company shares.
BESPC will prosecute this litigation on a contingency basis. You will not be responsible for paying any legal fees, costs, or out-of-pocket expenses arising out of or related to the prosecution of this litigation, regardless of the outcome of the matter. If there is a monetary recovery in this action, BESPC will, at the conclusion of the litigation or any segment thereof, apply to the court for approval of an award of attorneys’ fees and reimbursement of expenses. BESPC may also seek a fee if we obtain substantial non-monetary relief for the Class or the Company. The court will then award fees and disbursements (if any) from the proceeds of any judgment or settlement obtained in this litigation, based on factors considered relevant by the court. Such fees, costs, and disbursements will be paid from the entire settlement amount and not only from your share of the settlement amount.
BESPC may associate with other counsel to assist in the prosecution of this litigation. Any recovery of fees and costs will be shared with such counsel, determined on a percentage basis or based upon the time spent on the matter, as approved by the court if applicable. The division of work and or fees among co-counsel will not affect the amount of fees received upon a successful completion of the litigation. From time to time, BESPC may utilize contract attorneys to supplement the work of its own employed attorneys. BESPC will supervise the work of all contract attorneys and adopt their work product as its own. You authorize BESPC, as we deem appropriate, to associate with other counsel and to hire experts and consultants to assist in the handling of your claims.
It is possible that you will not be appointed as a lead plaintiff in the action. However, we may wish to represent you in other litigation related to the wrongful acts giving rise to this case. In such event, we will contact you to discuss the scope of such representation and obtain your approval before moving forward. You also agree that we may contact you with respect to other potential matters on your behalf.
BESPC will consult with you regarding any settlement negotiations and seek to obtain your approval for any proposed resolution of this litigation before entering into a final settlement agreement with defendants.
You expressly acknowledge that we have not made any representation to you, express or implied, concerning the outcome of any litigation or other matter in which we represent you.
If you are not chosen as a representative plaintiff and we do not choose to pursue other related litigation on your behalf, we will provide you with notification and this Agreement shall terminate. Otherwise, this Agreement shall remain in effect until the conclusion of the relevant litigation. However, you may terminate this Agreement at any time.
Upon termination, BESPC’s files and papers compiled in connection with its investigation and prosecution of this matter constitute the work product and property of BESPC over which it has complete control with respect to its use and/or disclosure.
This agreement sets forth the entire agreement between the parties and supersedes all other oral or written communications.
Please feel free to contact us at any time should you have any questions or comments in this regard.
In making this agreement, BESPC is relying upon your representation that you held the Company’s shares during the period from 5/11/2022 to 11/9/2022 (the “Relevant Period”) and that you continue to hold Company shares. Please provide us with documentation of your trading history in the Company’s stock by emailing a relevant copies of your brokerage statements to investigations@bespc.com. If you have any questions or need assistance, please call us at (212) 308-5858.
The terms under which we will represent you and your responsibilities as a potential representative plaintiff are set forth below.
Your Responsibilities as a Representative Plaintiff
As a representative plaintiff, you will have a duty to represent the interests of similarly situated shareholders and to participate in the prosecution of this litigation. You may also be asked to provide documents concerning your trading in Company stock and may be asked to sit for a deposition. Accordingly, you should preserve all documents that relate to this case until it has concluded or we inform you otherwise. Relevant documents include any information you have about the Company or your trading in Company stock, no matter how it is recorded or who is keeping it for you. If you have any questions about whether information should be retained, please contact us.You will have an obligation to remain knowledgeable about the litigation and participate in decisions concerning the progress of the litigation. If BESPC is appointed as lead counsel or in a similar capacity in the action, we will provide you with copies of all pleadings in the litigation for your review and approval, circumstances permitting, before they are filed with the court. BESPC will also promptly advise you of any significant developments in the litigation.
As a representative plaintiff, you cannot have any interest antagonistic to or in conflict with other shareholders or the Company concerning the claims we are pursuing or any relationships with any of the named defendants that would in any way impair your ability or incentive to obtain the best possible result. You agree that neither you nor any of your affiliates or agents will trade stocks while in the possession of any material non-public information you may receive in connection with the litigation. In addition, as a representative plaintiff, you may be required to continue holding Company shares. Please contact us before buying or selling Company shares.
Contingency Fee and Advancement of Expenses
BESPC will prosecute this litigation on a contingency basis. You will not be responsible for paying any legal fees, costs, or out-of-pocket expenses arising out of or related to the prosecution of this litigation, regardless of the outcome of the matter. If there is a monetary recovery in this action, BESPC will, at the conclusion of the litigation or any segment thereof, apply to the court for approval of an award of attorneys’ fees and reimbursement of expenses. BESPC may also seek a fee if we obtain substantial non-monetary relief for the Class or the Company. The court will then award fees and disbursements (if any) from the proceeds of any judgment or settlement obtained in this litigation, based on factors considered relevant by the court. Such fees, costs, and disbursements will be paid from the entire settlement amount and not only from your share of the settlement amount.
Association with Counsel
BESPC may associate with other counsel to assist in the prosecution of this litigation. Any recovery of fees and costs will be shared with such counsel, determined on a percentage basis or based upon the time spent on the matter, as approved by the court if applicable. The division of work and or fees among co-counsel will not affect the amount of fees received upon a successful completion of the litigation. From time to time, BESPC may utilize contract attorneys to supplement the work of its own employed attorneys. BESPC will supervise the work of all contract attorneys and adopt their work product as its own. You authorize BESPC, as we deem appropriate, to associate with other counsel and to hire experts and consultants to assist in the handling of your claims.
Other Actions
It is possible that you will not be appointed as a lead plaintiff in the action. However, we may wish to represent you in other litigation related to the wrongful acts giving rise to this case. In such event, we will contact you to discuss the scope of such representation and obtain your approval before moving forward. You also agree that we may contact you with respect to other potential matters on your behalf.No Special Treatment
You understand that in the event we secure a recovery, you will not receive any special treatment or receive a greater share of any recovery based on your service as a named plaintiff. However, we may ask the Court to approve an additional award to you to compensate you for the time and effort you expend on this matter. Any such award is solely within the discretion of the Court.
Settlement
BESPC will consult with you regarding any settlement negotiations and seek to obtain your approval for any proposed resolution of this litigation before entering into a final settlement agreement with defendants.
No Guarantee of Success
You expressly acknowledge that we have not made any representation to you, express or implied, concerning the outcome of any litigation or other matter in which we represent you.
Termination of This Agreement
If you are not chosen as a representative plaintiff and we do not choose to pursue other related litigation on your behalf, we will provide you with notification and this Agreement shall terminate. Otherwise, this Agreement shall remain in effect until the conclusion of the relevant litigation. However, you may terminate this Agreement at any time. Upon termination, BESPC’s files and papers compiled in connection with its investigation and prosecution of this matter constitute the work product and property of BESPC over which it has complete control with respect to its use and/or disclosure.
This agreement sets forth the entire agreement between the parties and supersedes all other oral or written communications.
Please feel free to contact us at any time should you have any questions or comments in this regard.