- Veru (VERU) stock recently released eye-opening fiscal results and achieved a clinical milestone.
- The investing community responded with a forceful share-price rally.
- Investors should let the trend be their friend and stay on the long side of the trade.
Miami-headquartered Veru (NASDAQ:VERU) is a biopharmaceutical company that develops medicines for the management of cancers and infectious diseases like Covid-19. Midday on May 13, VERU stock was shooting up like a rocket — and investors can hitch a ride after discovering what the excitement’s all about.
As recent lockdowns in China have reminded us, the global battle against Covid-19 isn’t over yet. There are still scientific strides to be made, and Veru is proud to offer assistance on this front.
The company has a diverse clinical pipeline. However, at the moment, financial market traders seem to be focusing on one of Veru’s products. That’s not necessarily a bad thing, though, since recent developments point to Veru’s progress in advancing an important Covid-19 drug.
What’s Happening with VERU Stock?
Going back to on May 13, VERU stock was up 45% in the middle of the day. Sure, biopharmaceutical stocks can move fast, but this was quite a price jump.
Suffice it to say, then, that short-selling Veru shares would be a dangerous proposition. It’s probably better to abide by the “trend is your friend” principle and either go long, or just stay out of the way.
By the time you read this, VERU stock may already be above the prior high of $17.50. If so, then the sky is truly the limit for this stock.
Still, you probably won’t want to invest in Veru just because the bulls are in control. It’s important to know why the stock shot higher. To get us all on the same page, first we have to delve into Veru’s Covid-19 drug, sabizabulin.
A 9-milligram dose of sabizabulin is being clinically evaluated for the treatment of hospitalized moderate-to-severe Covid-19 patients at high risk for acute respiratory distress syndrome. On May 2, the U.S. Food and Drug Administration (FDA) granted Veru a pre-Emergency Use Authorization (EUA) meeting on May 10 for the positive Phase 3 Covid-19 study for sabizabulin.
An Unusual Milestone Moment
Fast-forward to May 11, and Veru announced that in the pre-EUA meeting, the FDA encouraged/allowed Veru to submit its EUA request. This, already, marked a moment of significance in the advancement of sabizabulin.
Then, on May 13, Veru released its second-quarter 2022 fiscal results. The same press release also included an update on sabizabulin.
On the financial side, Veru posted $27.2 million in total net revenue for Q2 2022 — not too shabby. Yet, this wasn’t really the headline news of the day.
Here’s what got people’s attention. Reportedly, the Phase 3 clinical trial of sabizabulin went so well, that the Independent Data Monitoring Committee (IDMC) halted the trial.
That might sound counterintuitive, but there’s a logical explanation for this. As it turned out, the IDMC “unanimously voted to halt the Phase 3 because of overwhelming efficacy.”
So, the clinical trial halt was, oddly enough, actually good news and a milestone moment for Veru. Impressively, sabizabulin treatment “resulted in a clinically meaningful and statistically significant 55.2% relative reduction in deaths compared to placebo” for the selected patient population.
What You Can Do Now
As with many biopharmaceutical stocks, VERU stock is volatile and it’s not a great idea to pour your entire account into it. However, a small allocation could potentially produce substantial returns.
No matter how you slice it, Veru is showing remarkable progress in developing sabizabulin into a successful Covid-19 treatment for selected patients. It might be strange to consider the halting of a clinical trial to be a good thing. Yet, in Veru’s case, it could be the watershed moment that the investors were waiting for.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.