Veru Stock Could Retrace Week's 45% Gain As FDA Panel Votes Against COVID-19 Drug

Veru Inc. VERU shares could gap-open lower on Thursday following a negative Food and Drug Administration Panel verdict for its COVID-19 treatment candidate.

What Happened: Miami, Florida-based Veru announced late on Wednesday that FDA’s Pulmonary-Allergy Drugs Advisory Committee voted 8-5 that the “known and potential benefits” of its sabizabulin in treating adult hospitalized COVID-19 patients at high risk of acute respiratory distress syndrome do not outweigh the “known and potential risks.”

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The FDA panel, however, held an additional discussion on the clinical trial design aspects of an additional clinical trial as a potential post-authorization requirement.

“We look forward to continuing to work with the FDA as we continue our efforts to ensure this product is available to patients in a timely manner,” said Mitchell Steiner, CEO of Veru.

The FDA will take into account Adcom's recommendation while considering the application for emergency use authorization, although its verdict is not binding on the agency.

Why It’s Important: Veru shares ran up sharply this week, partly benefiting from the positive broader market sentiment and partly from the release of the briefing documents prepared by the FDA staffers on Tuesday. Between Friday and Tuesday, the stock jumped 45%, settling Tuesday’s session at $15.01, according to Benzinga Pro. It was halted for trading on Wednesday, in anticipation of the Adcom verdict.

H.C. Wainwright analyst Yi Chen said in a late October note that he continues to believe that the existing clinical data of sabizabulin for COVID-19 could warrant the grant of EUA.

Incidentally, Swedish Orphan Biovitrum AB BIOVF on Tuesday received EUA for its Kineret for the treatment of COVID-19 in certain hospitalized patients.

Veru shares could give back all the gains it built up this week and may fall back to levels seen on Friday or lower.

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