Veru Inc. (VERU) Misled Investors Regarding the Viability and Efficacy of its COVID-19 Treatment
A shareholder filed a class action on behalf of all investors who purchased or otherwise acquired Veru Inc. (NASDAQ: VERU) common stock between May 11, 2022 and November 9, 2022, for violations of the Securities Exchange Act of 1934. Veru is primarily an oncology-based biopharmaceutical company that develops drugs for the management of breast and prostate cancers, and also develops medicines for COVID-19 and other diseases related to viral and acute respiratory distress syndrome (“ARDS”).
According to the complaint, Veru 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. Originally developed as a treatment for prostate cancer, in January 2022, 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.
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.
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 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.
What Now: Shareholders who purchased shares of Veru Inc. between May 11, 2022 and November 9, 2022, have until February 2, 2023, to seek appointment as lead plaintiff. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. You do not have to participate in the case to be eligible for a recovery.
All representation is on a contingency fee basis. Shareholders pay no fees or expenses.