What happened

Shares of Veru (NASDAQ:VERU) were vaulting 15.6% higher as of 11:22 a.m. EDT on Wednesday. The big jump came after the biopharmaceutical company provided its first-quarter update after the market closed on Tuesday. Veru also announced that it had received a green light from the FDA to begin a phase 2 clinical trial evaluating VERU-111 in treating COVID-19

So what

Veru reported that its Q1 revenue jumped 43% year over year to $9.9 million with climbing sales of its FC2 female condom. The company's gross profit soared 61% to $7.4 million. However, Veru posted a net loss in the first quarter of $0.01 per share.

Gloved hand in front of wood blocks that are standing with fallen blocks that spell COVID-19

Image source: Getty Images.

The bigger story for the company was its announcement about VERU-111. The experimental drug is already being evaluated in a phase 2 study targeting metastatic castration-resistant prostate cancer. Why would a prostate cancer drug potentially be effective in treating COVID-19? It's a little complicated.

VERU-111 targets microtubules that transport viruses. The idea is that the drug could disrupt the microtubule traffic that the novel coronavirus uses to cause infection. In addition, VERU-111 has anti-inflammatory effects that might be able to reduce the inflammation in COVID-19 patients that's caused by cytokine storms, an immune response whereby the body attacks its own cells. 

Now what

Today's surge for Veru could prove to be only a temporary one. However, the company plans to begin dosing patients within the next two weeks, with treatment to go on for 21 days. It shouldn't be long before data is available to show if there's significant potential for VERU-111 in treating COVID-19.

Veru is also seeking grant funding from the Biomedical Advanced Research and Development Authority (BARDA) and the Defense Advanced Research Projects Agency (DARPA). If the drugmaker obtains funding, its share price could enjoy another boost.