Good morning, ladies and gentlemen and welcome to Veru Inc.’s Investor Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After this morning’s discussion, there will be an opportunity to ask questions. Please note that this event is being recorded. I would now like to turn the conference over to Mr. Sam Fisch, Veru Inc.'s Director of Investor Relations. Please go ahead.

Good morning. The statements made on this conference call that are not historical in nature are forward-looking statements. Such forward-looking statements reflect the company’s current assessment of the risks and uncertainties related to our businesses. Our actual results and future developments could differ materially from the results or developments in such forward-looking statements. Factors that may cause actual results or developments to differ materially include such things as the risks related to the development of the company’s product portfolio, risks related to the ability of the company to obtain sufficient financing on acceptable terms when needed to fund development and company operations, risks related to competition, government contracting risks and other risks detailed in the company’s press releases, shareholder communications and Securities and Exchange Commission filings. For additional information regarding such risks, the company urges you to review its 10-Q and 10-K SEC filings. I would now like to turn the conference over to Dr. Mitchell Steiner, Veru Inc.’s Chairman, CEO and President.

Thank you, Sam and good morning. With me in this morning’s call are Michele Greco, the CFO and CAO; Phil Greenberg, Executive Vice President, Legal; and Sam Fisch, Director of Investor Relations. Thank you for joining our call. Veru is an oncology and urology biopharmaceutical company with a focus on developing novel medicines for the management of prostate cancer. Today, we will update you on the clinical development of our drug pipeline and the commercialization of our products as well as provide financial highlights for the first quarter fiscal year 2020. It is estimated by the American Cancer Society that in 2020 there will be about 191,930 men with newly diagnosed prostate cancer which is a 10% increase from 2019. There will be an estimated 33,330 deaths from prostate cancer in 2020, a 13% increase from 2018. After following for two decades, this is the second year in a row that we have seen an increase in deaths from prostate cancer suggesting that men with advanced prostate cancer are progressing through current treatments and new effective treatments are urgently needed. We are delivering on our strategy to be the prostate cancer company. We are responding to this call to action and are dedicated to the development and commercialization of products to address unmet medical needs for the management of prostate cancer. The markets for prostate cancer management are well established as multi-billion dollar markets and given our core expertise and the number and type of drugs in our pipeline, we are uniquely positioned to understand, develop and commercialize medicines for these unmet medical needs of prostate cancer patients. Here is a brief update on the advancement of the prostate cancer drug pipeline. We have made significant progress with our open-label Phase 1b/2 clinical trial for VERU-111, a novel proprietary first-in-class…

Thank you, Dr. Steiner. As Dr. Steiner indicated, we started off the year with a great first quarter. FC2 unit sales totaled $10.1 million, up 36% over the prior year first quarter of $7.4 million. FC2 net revenues for the quarter totaled $10.4 million, an increase of 65% from the prior year quarter of $6.3 million. In the U.S., FC2 prescription channel net revenues were $6.1 million, an increase of 148% over the prior year quarter of $2.4 million. Net revenue for the public sector business also increased to $4.4 million from $3.9 million in the prior year quarter. Net revenues for PREBOOST/Roman Swipes were $153,000 compared to $47,000 in the prior year quarter. Gross profit increased $2.7 million to $7.3 million for a gross margin of 69% compared with $4.6 million for a gross margin of 73% in the prior year quarter. The reduction in the gross margin is due to an increase in labor transportation and equipment maintenance costs. FC2 net revenue per unit was $1.04 compared to $0.86 in the prior year quarter. The increase in U.S. prescription volumes resulted in the increase in our net revenue per unit and the increase in our gross profit. This increase in revenue provided the company with cash to continue funding its research and development projects. Research and development costs were $5.3 million compared to $2.4 million in the prior year quarter, an increase of $2.9 million. Operating expenses increased $3.4 million to $9.1 million from the prior year quarter of $5.7 million. The increase in operating expenses is primarily due to the increase in research and development expenses for our multiple advancing drug product candidates. The operating loss for the quarter was $1.8 million compared to $1 million in the prior year quarter. During the quarter, non-operating expenses increased…

Thank you, Michele. We have enjoyed yet another strong financial quarter which has allowed us to significantly advance our clinical programs. In fact, we have now had nine strong quarters of growth in our FC2 U.S. prescription business. Looking forward to the rest of fiscal year 2020, we expect our revenues to continue to be strong and growing towards a record year. With the improving performance of commercial products and a strengthening of the balance sheet, we believe that we will be able to substantially invest in the continued development of our prostate cancer and other cancer drug product candidates as well as submit NDAs and if approved commercially launch TADFIN, which would provide either more revenue to the already growing revenues from FC2 and PREBOOST/Roman Swipes. We anticipate a steady flow of important positive news for Veru over the next few months to 1 year. For VERU-111, our oral anti-selective antitubulin, we will report open label efficacy and safety clinical results with the Phase 1b and the Phase 2 clinical trials for VERU-111 for the pre-chemo metastatic castration and novel androgen blocking agent resistant prostate cancer. We will initiate new open-label Phase 2 clinical studies in other indications and tumor types. For VERU-100, our novel peptide GnRH antagonist 3-month depot formulation, we will complete GMP manufacturing of the clinical supply of VERU-100 submit the IND and complete the Phase 2 clinical trial. For VERU – excuse me, for zuclomiphene, our oral estrogen receptor agonist, we will have an end of Phase 2 meeting with FDA and initiate a pivotal Phase 3 clinical trial evaluating zuclomiphene for the treatment of hot flashes in men with advanced prostate cancer in androgen deprivation therapy. We will submit the NDA for TADFIN who have secured partnerships with some of our drug products and we will continue to demonstrate robust growing revenues for our commercial products, FC2 and PREBOOST/Roman Swipes. We are committed to driving shareholder value by becoming the prostate cancer company. We are also committed to providing substantial benefits to prostate cancer patients by developing commercializing products to address unmet medical needs in the management of this disease. With that, I will now open the call to questions. Operator?

[Operator Instructions] The first question today comes from Brandon Folkes of Cantor Fitzgerald. Please go ahead.

Hi, thanks for taking my questions and congratulations on all the progress during the quarter. Firstly, is there any additional color perhaps on the baseline characteristics of the 4 men on VERU-111 that you callout that have responded very well? And then secondly, can you just talk – I know it’s jumping a bit ahead, but about the competitive environment you would expect for VERU-111 when it comes to market within prostate cancer? Thank you.

Thank you. Alright. So the first question can I give you some more color on the baseline characteristics of the four men that have shown good I guess imaging progression free survival meaning they have not progressed and you are clearly well beyond what you would have expected for the patients of this type. I can’t provide color on the individual patients, but I will give you some color about the patients in general that have entered the study. In that, in prostate cancer, the most common place that prostate cancer spreads is lymph nodes and to bone and when it spreads to visual disease like the liver and that kind of stuff, that’s called visual disease. So, in this study, almost all the patients either bone metastasis nodes or both and that’s why I commented on a node in one patient for example, shrinking and with confirmed with the follow-up CT scan and the bone scan that got that improved. And so that kind of gives you a flavor of a typical patient that a urologist sees. Now when the patient starts getting visual disease meaning it goes into the liver and the adrenal glands and that kind of stuff and those patients are further along in the disease and most likely will be followed by the medical oncologists. As it relates to the question about the competitive market, right now, this is the fastest segment that’s growing and the best way to kind of layout the competitive market is to think about kind of the treatment modalities that are coming in. At this point, just to be very, very clear, there are no drugs approved for patients that fail ADT and fail one of these androgen blocking agents. And I will also say that almost every patient is…

Right guys. Thank you very much. Could I may be just sneak in one more just housekeeping how should we think about the spend for the rest of the year going forward?

You broke up say that one more time.

How should we think about operating expenditure for the rest of the year going forward? Thank you.

So the way I would look at it is now having to show comment as well the way that we have the Phase 3 in the budget the Phase 2 is in the budget the VERU-100 the way we are planning our budget for the year it looks like our revenues and gross profits in the cash coming off the business will meet our needs and so we feel pretty good about that and as we guided last year, we did not do a raise. This year, we are feeling pretty good next year possibly but I think right now it is a balance between making the money match versus accelerating programs that have promising good news and so that’s the fine line that we walk so, right now we are fine but then I hope to keep accelerating because that gets us to the patient’s sooner than later.

Thank you very much.

The next question today comes from Leland Gershell of Oppenheimer. Please go ahead.

Hey, good morning Mitch. Thanks for taking my questions. Just a question on 111, two questions, if you could remind us the two to three indications that you are looking at in addition to your current focus and also when might we see the first presentation of data, perhaps at a medical meeting this year? And then just a quick follow up? Thanks.

Yes. So for the two to three indications you have heard me mention on the previous call that we were looking at pancreatic cancer and breast cancer and post taxane prostate cancer. And so where we are right now is those are all still on the table and what we are trying to do right now is say lets just focus on getting the prostate one done and this will answer your second question as well, and I'll come back and tell you the other indications the idea is for us for the other indication if you look in the literature either at VERU111 you will see that we have had activity in pancreas we have activity in ovarian, cervical, breast, triple negative breast, of course, prostate is in different flavors, taxane and non taxane cell lines. It doesn't matter. We work in taxane so want to become resistant taxane so we have a lot of flexibility so what we want to do first is get going we have got the answer to your second question when we are going to present the information as scientific meeting it is maturing very, very nicely the Phase Ib. And we're finishing up the last cohort, which means that we can quickly initiate the Phase 2 because it is all part of the same plan in other words the IOB’s and everything approved the Phase 1b/2 so going to the Phase 2 just literally requires getting your sides which we already have and starting to study so that’s what I said in the call that we reach an important milestone we are closing one chapter and opening another the other important thing to understand is even though we are closing the first chapter those patients that are on our drug and they are…

Okay, great. And then with the Phase 3 in zuclomiphene set to start after you end of Phase 2 with FDA, if you can remind us the size, the sample size you would expect based on powering assumptions from the data you have and then when might we see the Phase 3 from that program? Thanks.

Yes. So the way we are thinking about it now is after the end of the Phase 2 meeting, we will be able to layout the exact assumptions, effect size and the size of the study. But we are thinking we are looking at about 120 patients per arm, so the study will be about a 240 patient study, something like that, 240 to 260. And as you know, it’s a 12-week treatment period. So that’s going to be pretty consistent. And so I think that gives you sort of sense of the trial. We believe it will take us 6 to 9 months to enroll that study, if not a little bit longer. And then you have to have 12 weeks that goes by. We will be able to talk about the efficacy part and then the patients will then roll into safety, longer term safety piece of it. So if we meet with the FDA and then start the study sort of by summer, then we are looking at data coming in approximately a year and some change.

Well, great progress. Thanks very much.

[Operator Instructions] And the next question comes from Kumar Raja of Brookline Capital Markets. Please go ahead.

Thanks for taking my questions. So Mitch, on VERU-111, I just wanted to get a sense with regard to as you are dose-escalating, what kind of correlations are you seeing in terms of the efficacy versus the side effect profile? And also how this can be leveraged in terms of the follow-on trials with the other indications?

To make sure, I answer the second question. The second question is based on what we learned from the Phase 1b, how was that relevant to the other tumor types, is that what you are asking?

Yes, that and also like how you can leverage, yes, yes, I think yes, that’s what I am asking, yes?

Yes, I’ve got you. Okay. So let me answer the second question first and the answer is that in our animal models, it turns out that the concentrations that we saw of almost every tumor type whether its pancreatic lung cancer, triple negative breast, it was always in the same human equivalent dose and was dose-dependent, which means if you were low, you got less of a tumor response in the animals. If your concentration in the blood was higher, you get a better response. So you definitely had the dose response and our doses that we are treating 54 and beyond are in that range. And so we have reached as I said in the call, prepared comments in the call that we have reached the concentration there. So we stay in that concentration range. It will get a broad spectrum of different tumor types, if the animal model translates into the human model. As it relates to what we are seeing, we are seeing interestingly that we are changing two levers, one is dose, so we went from 4.5 up to 81 and the other thing we are changing schedule. Patients get treated 1 week on, 2 weeks off, 2 weeks on, 1 week off, 3 weeks continuous. And so we have two levers that we are pulling. What I can tell you is that using PSA as a biomarker, there's no question that the higher the dose and the more it is given so continuous is better than two weeks on and one week off and two weeks on and continue is a better than taking one week on and two weeks off so we are seeing dose and schedule changes consistent with a dose response with the product with VERU-111 As it relates to the side effects, there appears to be a window in which we are in the concentration required to see anti cancer effects that we have seen in the preclinical model. Now we're seeing in the human model, where the side effects profile looks pretty good so well tolerated as you go to the highest, highest doses that’s is when we start seeing what you expect for a cytotoxic agent on the GI tract. Because as you know, the GI tract is where the cells divide pretty rapidly and so that’s when we're starting to see the nausea, vomiting and the diarrhea all manageable but the highest doses you see more of this so even that side effect is dosed dependent as it relates to as I said we are not seeing neurotoxicity, so I can't comment on that as it relates to relates to effects on neutrophils. I'm telling you, unless we keep pushing this drug I mean the effects on neutrophils are going to be mild so it is already a different side effect profile than a taxane.

Okay, thank you. And one more question with regard to the female condom looks likes the business in the U.S. is doing well what I am trying to get here is like obviously we are seeing decent growth but in terms of the potential where do we stand there like in terms of continued growth how long do you expect to see them and in terms of the potential where do we stand like what are your expectations in terms of long term growth?

Great question and I think I don’t want to be this is going to sound little corny but it’s a blue ocean out there right and this is what we have been able to do is tap into a very interesting way to sell interesting sales channel for FC2 so by using sales channel called telemedicine, it's allowed our company not spend any money on marketing and selling I mean that is an important point so we have this kind of revenue coming in without a sales person and without a marketing budget and you said, well, Mitch, how can that be? Well, it turns out that these telemedicine groups are using their resources to market products and market people to come to their website and then in their website is when they interact with the physician whatever mechanism in that website does that and then some of these websites also play role in filling the prescription sending the product to the patient and following-up the patient over time, just like traditional CVS or Walgreens would do if we came in with a prescription in a brick and mortar place for some reason and I think it has to do with the fact that women’s health is such an important issue particularly contraception there are so many of these telemedicine sites that are opening up literally once a week we hear about a new one You've heard of Feraheme, it's in the pill club and others like that and you have heard are not going to get Roman for men, so Ferahemes for men. So these websites are growing rapidly and we are just literally taking advantage of this in the sense that that’s the patient’s that are accessing our product and those numbers are just slackening in terms of…

Okay, great. Thank you so much.

The next question today comes from Peter McMullin, a Consultant.

Can you hear me, Mitch?

I hear you, Peter. How are you doing?

Good. Thank you. Mine is more of a marketing question, I believe you are going to ASCO over the next few days, what are you doing there, how much of the odd ends to Veru? What’s the opportunity to kind of like expand your fan club?

Great question. So as you know we have taken the approach that it’s better to show then to tell. And so we now have information that’s coming out of our cancer programs where we can show. And so that’s allowing us now to – and this has been a record year to begin to get a new fan club, a base. And as you know Dr. Harry Fisch and myself, both urologists and particularly in our history with urology community and particularly in prostate cancer, we have a big footprint. And so we are beginning to engage with these thought leaders to get them on board. That’s how come I know, for example that they are very excited about VERU-111, because urologists want to maintain these patients. And just by way of how this is going now and when I was a resident, if somebody was diagnosed with advanced prostate cancer they had 18 months to live, in some cases today, its 20 years or more. And so these advanced – and because of all these new drugs, these advanced prostate clinics are opening up across the country. They demand mostly by urologists. They have their own pharmacies. And this is what they do. They manage these patients effectively so that we can get as much time and quality as we can. And so now there is a new renewed interest in new drugs, because before we had nothing and now with these clinics that are opened around ADT that opened around novel androgen-blocking agents and now the patients are starting to fail these agents, what’s the next thing? What else can we do to keep these patients? So this is where we are coming in. So this new meeting comes up GU ASCO, I am going to hop on…

When is the dates covered and when do you actually present? Does it go through the weekend or is it Thursday, Friday and people go home….

Yes. I think it’s going to be like Thursday, Friday exactly. It’s what it is and one each day. And if you look on the GU ASCO or the [indiscernible] oncology ASCO meetings, it will have – I think it can actually get into the schedule and see. And do we have a press release coming? Yes. So we have a press release. Somebody in the room was telling me that we will put a press release out. We will tell you the dates, the times and we’ll give you summary of each abstract. And it’s already out. It’s on the website. Can we put – are we going to do a press release or not?

It already went out.

Went out. Okay, alright. So, good, so it’s already gone out. So, you go to our website evidently, it’s already out.

Well, good luck on that and take your trumpet.

Thank you. Appreciate it.

Ladies and gentlemen, this concludes our question-and-answer session. I would like to turn the conference back over to Dr. Mitchell Steiner for any closing remarks.

Thank you, operator. I appreciate you joining us on today’s call and I look forward to updating all of you on our progress at our next investors call. Thank you.

The digital replay of the conference will be available beginning approximately noon Eastern Time today, February 12 by dialing 1877-344-7529 in the U.S. and 1412-317-0088 internationally. You will be prompted to enter the replay access code, which will be 10138979. Please record your name and company when joining. The conference has now concluded. Thank you for attending today’s discussion. You may now disconnect your lines.