What happened
Veru (VERU -8.33%), a somewhat under-the-radar coronavirus stock, landed on the radars on many investors at the start of the trading week. An analyst tapped the stock as one of his choice selections, and the market collectively responded by trading the biotech's shares nearly 15% higher on the day.
So what
The attention Veru has gotten is due to sabizabulin, an experimental drug that treats Covid. Monday morning, Oppenheimer prognosticator Leland Gershell reiterated his bullish view on the stock, which he currently recommends as an outperform (i.e., buy) at a $36 per share price target.
Gershell's latest take on Veru is based on an interim analysis on sabizabulin published by the company last week.
He wrote in a fresh analyst note that this "leaves little doubt, in our view, that the drug will be granted EUA by the FDA," referring to the Emergency Use Authorization designation by the U.S. Food and Drug Administration.
Now what
That interim analysis provided plenty of scope for optimism. The company said that the experimental drug demonstrated high reduction in fatalities for high-risk patients hospitalized with the disease, and was well tolerated, for the most part.
There is some doubt hanging over those results, however. On Friday, a short-seller called Culper Research published a stinging report on Veru's claims. Among other accusations, Culper said that the placebo group in the trial were sicker and more high-risk than the patients actually administered the sabizabulin.
All will depend, of course, on the FDA's response to Veru's EUA application for the treatment. Hopefully for the biotech company's shareholders, Culper's concerns will prove to be at least somewhat unfounded.
