Veru (VERU 3.05%), a biopharmaceutical company that specializes in oncology therapies, had a wild swing on Tuesday, with its shares falling 21.8% on the same day after they started out the morning 12.9% higher. The stock closed at $12.28 on Monday, then opened sharply higher on Tuesday at $13.61, but then tumbled the rest of the day, falling to $9.60 in the late afternoon. The company has a 52-week low of $4.54 but was coming off its 52-week high on Monday, when it hit $14.57.
On Monday, the stock had soared on the company's announcement that it planned to seek Emergency Use Authorization (EUA) from the Food and Drug Administration for Sabizabulin, as a COVID-19 therapy. In its release Monday, the company said that the drug, in a Phase 3 clinical trial, produced a 55% reduction in deaths from COVID-19 compared to a placebo in patients with moderate to severe risk of acute respiratory distress syndrome, regardless of the variant. The study's Independent Data Safety Monitoring Committee unanimously recommended that the study be halted due to efficacy, adding there were no identified safety concerns.
What happened Tuesday was simply profit-taking by investors, who were selling on the news. The stock on Monday had jumped more than three times its $4.55 closing price on Friday and investors saw an opportunity to cash in.
This is still big news for Veru, so expect to see more stock swings as it anticipates a decision by the FDA. The company already received Fast Track designation from the FDA for Sabizabulin in January, so that may streamline the process for the drug's approval.
Interestingly, the biotech company's development of Sabizabulin was just an example of it looking at an opportunity. The drug was being developed as a therapy for two of the most common forms of cancer, breast cancer and prostate cancer, but the oral cytoskeleton disruptor's antiviral and anti-inflammatory capabilities made it a good drug to fight COVID-19 as well. The company's other lead drug, Enobosarm, is in two Phase 3 trials as a therapy to fight breast cancer.
The news regarding Sabizabulin comes at a good time. The company has been steadily increasing revenue, but just came through a rough fourth quarter. In its fourth-quarter report, Veru said it had revenue of $14.14, down 3.2% year over year. It also reported it lost $6.4 million, or an earnings per share (EPS) loss of $0.08, compared to a gain of $17.2 million and $0.23 EPS in the same period last year.
That Sabizabulin was found safe and effective against COVID-19 only helps its chances as a multi-cancer therapy, and whatever money the company can gain from it will help the development of its other late-stage candidates.