EFTA00810576.pdf

BROOKLINE A Division of CIM Securities Equity Research CAPITAL MARKETS Member FINRA and SI PC April 05. 2018 Veru, Inc. Healthcare Potential to Create More Value Than Meets the Eye, Initiating Buy $10 TP VERU Buy • Conclusions — We are initiating coverage with a Buy rating and $10 TP. In Initiation of Coverage our view. Tamsulosin DRS. slow release granules, and Tamsulosin XR capsules have potential to be value drivers for the stock based on their Current Price differentiated profile including lack of food effect and use in patients with $1.80 dysphagia. We model substantial revenues in benign prostatic hyperplasia (BPH) patients with dysphagia. We believe that the stock has significant Target Price upside potential with modest pipeline success, despite our conservative $10.00 financial estimates. Our $10 TP is based on probability adjusted sum of parts valuation of Tamsulosin and 25% premium for rest of the pipeline. Market Capitalization 96.32M • Tamsulosin XR and DRS differentiated profile should drive uptake — Shares Outstanding Tamsulosin XR and DRS would be addressing a well-defined indication with 53.51M an established market and a medical need, and we conservatively model 33% probability of approval and expect launch in 2020. We model peak Float sales of $886M in 2036. 28.52M • VERU-944 Phase 2 expected to begin in Q318 - Phase 2 trial to study Institutional Holdings another 505(b)(2) candidate VERU-944 (cis-clomiphene) to treat hot flashes 4.28% in advanced prostate cancer patients on hormone therapy is expected to begin in Q318 with data in O119. 12-month Low/High $0.90f$3.00 • VERU-111 significant potential in oncology — Veru is also preparing to Average 90-day Volume start a Phase 1/2 open label trial to study VERU-111, a novel, taxane-like 129,981 oral therapy for metastatic castration resistant prostate cancer (MCRPC) that targets both alpha and beta tubulin. Investigational New Drug (IND) Fiscal Year End application for VERU-111 is expected to be filed in O218 and the clinical September 30 trial, expected to be done in Johns Hopkins as the lead site is anticipated to have data in early 2019. Revenues (SM) • Multiple Catalysts in next 12 months — We foresee multiple catalysts in next twelve months, including NDA filing for Tamsulosin, VERU-944 Phase Period 2017A 2018E 2019E O1 2 initiation and data, and VERU-111 IND filing and data. Solifenacin DRG and TadalafillFinasteride combo capsules NDA filing is expected in 2019. O2 O3 O4 $13.7 16.1E 25.6E Equity Research Kmr I' ll' PhD Dir or nior Bi hnology Analyst EPS ($) Period 2017A 2018E 2019E O1 Brookline Capital Markets O2 Trading: (646) 807-4124 Institutional Sales: (646) 807-4125 O3 www.Brooklinecapitalmarkets.com O4 ($0.25) ($0.271E ($0.261E Refer to Page 25 for Analyst Certification & Disclosures EFTA00810576 BROOKLINE A Division of CIM Securities CAPITAL MARKETS Veru, Inc. (VERWI April 05, 2018 Portfolio Manager's Summary Focus on Developing Urology and Oncology Products Leveraging 505(b)(2) Veru is a biopharmaceutical company with a focus on developing products in Urology (including a female sexual health division) and Oncology. It has two products in the market generating revenues, a female condom and a male penile desensitizing wipe for premature ejaculation. These products have potentially large niche markets and would continue to generate revenues. Growth in established markets and entry into newer geographical markets in South America and Africa and increasing sales would ensure sustained revenue growth and a source of capital/expertise for portfolio products under development. Veru is now focusing on development of differentiated products for urology and cancer indications and is advancing its efforts to have a pipeline of potential products that can be approved by 505(b)(2) regulatory pathway for commercializing successful products. Figure 1. Pipeline focus on therapeutics targeting urology and oncology Product Indication Target Proclinical Phase t Phase 2 Phase 3 Filing Marketed rc2 tonal* Data Barns Aqaba, STD (JdsIll apical dowel <alba:444am arta Parana, I Iwnwlood DAS at study only MonalaolOtoolill monad Odirgand Sups, Weans a s• I ElPal 6 dithata 505110 2) ore *woman) mance taxis swallowing was Dr solution st 'an Tama/can Xll Caguas ,p,rarittrict super Seadmay why axionali 5050021 dinaddis i 01 no rod:loom i Sol/demon ORG I BE study Dan Osman Koala. Saab.* M3 (_wa= tram muicata.c 505(12X2) unnatIng 100 often OrsaaVesaa Ordafteall TatianaWistaria BE study only combo *Spada BAa (woo tx ru cum. raw — (Sars 0—ron 505(bX2) as. Inheaon 1.01Nina from postale War 50ald2) lairdeffISM) tw• at*, atm* Palmas 11 veRdall swat prtstill• Soldtword a • 6 Md.. aelaa 01001.• inromor Source: Veru The most advanced products in its pipeline for 505(b)(2) approval are Tamsulosin DRS granules (soluble powder) and Tamsulosin XR (extended release capsules) for benign prostate hyperplasia (BPH) that the company is planning to file NDAs for in 2018. Solifenacin DRG granules are being developed for the indication of overactive bladder, and combination TadalafillFinasteride capsules for enlarged prostate and erectile dysfunction (ED), with NDA being EFTA00810577 BROOKLINE A Division of CIM Securities CAPITAL MARKETS Veru, Inc. (VERWI April 05, 2018 planned for these two products in 2019. All these products are well positioned for approval only after relatively straightforward pivotal bioequivalence (BE) studies. Veru is also initiating a Phase 2 trial to study another 505(b)(2) candidate VERU- 944 (cis-clomiphene) to treat hot flashes in advanced prostate cancer patients on hormone therapy with an eye for NDA in 2020. In addition, Veru is also preparing to start a Phase 1/2 open label trial to study VERU-111, a novel. taxane-like oral therapy for metastatic castration resistant prostate cancer (MCRPC) that targets both alpha and beta tubulin. An Investigational New Drug (IND) application for VERU-111 is expected to be filed in O218 and the clinical trial - expected to be done in Johns Hopkins as the lead site - is anticipated to have data in early 2019. The company has interest in Urology products that can be approved by the 505 (b) (2) regulatory pathway. These drugs are already approved for other indications, and therefore are overall safe and efficacious with existing clinical data. These are good candidates for label expansion, with new formulations as approvals are potentially low risk and lower cost with faster path to pivotal trials. Tamsulosin DRS formulations to overcome disadvantages of current SOC for BPI-I Tamsulosin DRS (XR oral suspension) is 505(b)(2) candidate in an extended (slow) release soluble powder form for prostate gland enlargement (BPH) patients who have difficulties in swallowing pills due to dysphagia. BPH is a common old-age related condition affecting men. Based on census data there are '-42M men in U.S over that are age 55 and over. Based on a study published by Guess et. al in The Prostate Journal, the prevalence of histologically diagnosed BPH is 40 to 50 percent in men aged 51 to 60 and is over 80 percent in men older than age 80. Branded/generic Tamsulosin is approved (brand name as FLOMAX; available as Tamsulosin hydrochloride pills) and available for treatment of BPH. FLOMAX was developed by Astellas Pharma. However, many elderly patients, or those with neuropsychological disorders or those living with consequences of stroke often have dysphagia or swallowing difficulties. Up to 50% of more of those afflicted with Parkinson's disease, Alzheimer's disease, stroke, or those living in long term care centers suffer from dysphagia and cannot therefore be treated for BPH even when an approved treatment is available. EFTA00810578 BROOKLINE A Division of CIM Securities CAPITAL MARKETS Veru, Inc. (VERWI April 05, 2018 Tamsulosin is a selective alpha 1- adrenergic blocker for alpha 1 receptors in prostate gland. Enlarged prostate may push against the urinary bladder and affect the musculature around the bladder or urethra that passes urine for excretion, thus resulting in reduced capacity of the bladder, pinching/constriction of the urethra and other mechanical issues. Tamsulosin acts by relaxing the smooth musculature around the bladder/prostate neck area. This helps improving urine flow and reducing BPH symptoms. Although FLOMAX is the choice alpha-blocker treatment for BPH in the elderly, there are several issues with the current state of treatment. FLOMAX is only available as a capsule and must be taken 30 minutes after meals to ensure optimal absorption. Fasting levels of absorption, or disintegration of the capsule can result from accident or nonconformance (chewing, crushing, opening of the capsule cover) in patients who have difficulties with instructions, and this results in very high absorption in a small amount of time which can have undesirable side effects. Since this relaxes musculature, reduction of blood flow could happen resulting in low blood pressure, dizziness, fainting. -15% of patients with BPH may also suffer from dysphagia (often resulting from neurological damage in conditions like Parkinson's disease, stroke) as perhaps unrelated but associated conditions and such patients get precluded and cannot benefit fully from the standard of care regimen. In these patients that cannot take capsule form of Tamsulosin, BPH can lead to bladder infection, sepsis and may have to be treated with more invasive methods like catheterization to empty the bladder and/or surgery. Tamsulosin-DRS can address a substantial market for BPH in dysphagic patients Veru's Tamsulosin-DRS is its Tamsulosin-XR (extended release formulation) in an oral suspension form. XR slows the release of Tamsulosin, thus reducing the chances of overdose related side effects. Tamsulosin XR, made into dry granules in a powder form that can be suspended in water (DRS formulation) and taken orally would allow for the medication to be taken as a liquid instead of a capsule. This can therefore bring in the currently underserved population of BPH + dysphagia patients into the fold of pharmacological intervention. This leads to better conformance of the patients, is more comfortable and an affordable solution. This would be a long-awaited solution and Veru is well positioned to serve the space and take advantage of this substantial market opportunity. EFTA00810579 BROOKLINE A Division of CIM Securities CAPITAL MARKETS Veru, Inc. (VERWI April 05, 2018 Bioequivalence (BE) studies show DRS to be acceptable and safe The XR version itself is the safer (no food effect) capsule version of Tamsulosin hydrochloride and should be able to gain traction in the existing BPH market that is served by FLOMAX capsules. Tamsulosin-DRS would extend the market for the first time to those who also have dysphagia. Two bioequivalence studies have been completed to show that the new DRS formulation (extended release as suspension granules) leads to similar exposure as FLOMAX. In a stage 1 completed study on 12 patients, single dose FLOMAX (given after food) was compared with Tamsulosin DRS (after food and in fasting conditions) and the PK pharmacokinetics analysis showed that the absorbed amounts of Tamsulosin DRS given without food was equivalent to FLOMAX with food. This means that the DRS, even when administered as an oral suspension liquid (which provides with conformance benefits, but also should be slowly released, and therefore slowly absorbed) is able to achieve a slower, optimal absorption because of the XR formulation equivalent to FLOMAX with food, essentially showing that this formulation has no food effect. Results of a stage 2 BE study on 36 patients for 21 days also reported bioequivalence between single dose Tamsulosin DRS (fed and fasted) and FLOMAX (fed) for measures of AUC (area under curve) but not for Cmax (maximum concentration in blood/plasma). AUC measures total drug exposure over time and is a function of absorption and elimination. Cmax is the maximum concentration of a drug in serum and depends on rate and extent of absorption. The ratio of these two measures gives a measure of absorption. The results here reiterate that, whereas the body gets the equivalent total amount of exposure to the Tamsulosin as DRS or capsule (FLOMAX), the maximum absorption (rate, extent) is lower for DRS suggesting a slower absorption rate or lower sustained exposure compared to FLOMAX capsules with food. Another bioequivalence study, the final one, is ongoing now (1Q18) to confirm that Tamsulosin XR has no food effect with an in vitro dissolution study and validation of stability of GMP manufactured batches. The Cmax would also be tested to see if there is equivalence with FLOMAX. These bioequivalence studies are relatively straightforward and have shown acceptable profiles compared with FLOMAX. Added with the definite advantages of the XR/DRS formulation (removal/reduction of food requirement, ease of administration and lack of side EFTA00810580 BROOKLINE A Division of CU Securities CAPITAL MARKETS Veru, Inc. (VERWI April 05, 2018 effects), this should lead to better acceptability and therefore better market potential than FLOMAX capsules. Veru anticipates filing an NDA application in 2018 based on these results. Veru has recently reported that it has received a waiver of $2.4M for NDA fees as a small business and it would free up resources for further development of pipeline programs Major clinical and market need for BPH patients FLOMAX and related generics of the alpha-blacker class enjoy a multibillion dollar market for BPH in US. The initial target for Tamsulosin DRS would be dysphagic men with BPH in long-term facilities. About 13% of FLOMAX and other generic markets are represented by long-term facilities. Around 3.6M new prescriptions are written annually for BPH patients with dysphagia. It is estimated that about 68% of men placed in long-term care facilities have dysphagia. In the US, three leading group purchasing organizations (GPOs) that manage FLOMAX purchasing supply for long-term facilities could be approached for Tamsulosin DRS to give access to this crucial patient population. Veru also plans to maintain pricing parity with FLOMAX, the wholesale acquisition cost (WAC) for which is about $730 (for 100 tablets) to gain acceptance by the medical community, payers and the patients. That XR capsule (and therefore DRS powder) has no food effect is an attractive proposition for urologists to write prescriptions for Tamsulosin XR capsules over FLOMAX, the target prescriptions for which are over 22 million/year for men who do not have dysphagia and '-4M prescriptions a year for about -15% patients who have dysphagia. This represents a market (for FLOMAX and Tamsulosin generics) of $3.58 in US alone (-$4.18 for all alpha-blockers), besides the ROW opportunity that could be even bigger. The IP exclusivity could potentially be enjoyed by Veru up to 2036 from the Tamsulosin franchise that it licensed from Ariana Therapeutics. Ariana (now Camargo) would receive $10M over three years after the drug has been in market for one year. Tamsulosin XR and DRS would be addressing a well-defined indication with an established market and a medical need, and we conservatively model 33% probability of approval and expect launch in 2020. Solifenacin DRG granules for overactive bladder Veru's urology pipeline for 505(b)(2) pathway includes solifenacin DRG granules for the treatment of overactive bladder (OAB). Overactive bladder is experienced by a sixth to a fifth of the adult US population and has a higher prevalence with EFTA00810581 BROOKLINE A Division of CU Securities CAPITAL MARKETS Veru, Inc. (VEAL!) I April 05, 2018 increasing age where the prevalence can be from a third of short-term care patients to over 70% of population in long-term care facilities. This causes an increase in the frequency of urination, lack of bladder control and urge incontinence or involuntary emptying of the bladder. OAB affects both men and women with a wide variety of causes ranging from medications, infections, tumors or stones. The musculature around the urinary bladder controls the urine flow and contracts when the bladder is full, resulting in an urge to urinate which is aided by the contraction of the muscles and controlled constriction of the bladder. In OAB, the muscles may be affected resulting in involuntary contraction of the muscles, thus leading to incontinence. Solifenacin for treating OAB Solifenacin succinate (trade name Vesicare) tablets are given for managing OAB and represent the standard of care for overactive bladder. Vesicare is marketed by Astellas. Solifenacin is a small molecule urinary antispasmodic that helps by relaxing the musculature thereby reducing the urge to pass urine. Solifenacin is a selective M3 muscarinic receptor antagonist. These receptors are important for muscle contraction and solifenacin competes with acetylcholine to bind these receptors, thus resulting in reduced muscle tone in the bladder. This allows for reduction in the urge and better retention of urine in the bladder. Available solifenacin formulations suffer from similar disadvantages as Tamsulosin in that they are available only as capsules or tablets that are to be taken in whole and cannot be chewed or crushed. Consequently, people who suffer from dysphagia (inability to swallow) remain underserved for treatment for OAB. In these patients, compliance is very low, and interventions include catheterization and wearing diapers, or surgery. Solifenacin DRG oral solution to treat OAB in dysphagic patients Veru is developing Solifenacin DRG, as a novel slow release granule formulation of solifenacin succinate that can be taken as an oral suspension in dysphagic patients with OAB. This will increase compliance in these patients who will be the first target population. Although solifenacin is one of the lowest cost drugs to treat OAB in US with an average cost of $6.8k for one successful treatment, solifenacin has a $1.1B market worldwide. We expect that Solifenacin-DRG can capture a substantial portion of the market because of its advantages over the solifenacin capsules. DRG formulation would not only bring in revenues from EFTA00810582 BROOKLINE A Division of CIM Securities CAPITAL MARKETS Veru, Inc. (VEM.I) I April 05, 2018 treating the dysphagic OAB patients, it can be more attractive for urologists and patients because of improved compliance and ease of administration. The FDA has already confirmed one bioequivalence study as valid and Veru is conducting another bioequivalence study in 2018 and will use the results for making an NDA filing planned for early 2019. We feel that since the safety, indication in question and the pharmacologic solution are very well defined, and the market potential is not in question, solifenacin DRG has a great shot at approval and should lead to successful commercialization in 2020. We also note that since the initial target population is the same, i.e., the elderly population at long-term care facilities. Veru can leverage the same salesforce and marketing infrastructure for both of its Tamsulosin and Solifenacin product lines. Tadalafil/Finasteride for BPH. Tadalafil/Finasteride is another asset that Veru is developing for treatment of BPH and would utilize 505(b)(2) pathway for approval. Tadalafil and Finasteride are both used for BPH besides several other disease/disorder conditions. Tadalafil manufactured by Eli Lilly is marketed as Cialis for treatment of erectile dysfunction (ED) and as Adcirca for pulmonary arterial hypertension (PAH). The FDA approved Cialis for treating BPH in 2011. Finasteride (brand names: Proscar. Propecia) marketed by Merck is approved for treatment of enlarged prostate (>30 cc volume) as well as hair loss. Tadalafil can be used in combination with Finasteride can be used for BPH as well as to treat symptoms of UTI, ED in BPH patients. Tadalafil is a small molecule inhibitor for phosphodiesterase type 5 (PDE5) which blocks degradation of cyclic GMP by the enzyme. PDE5 is present in smooth muscles and therefore could be targeted for treating musculature/vasculature disorders. Finasteride is a small molecule inhibitor of 5 alpha-reductase enzyme and exerts its action by decreasing the production of dihydrotestosterone (DHT). Reduction of DHT hormone may discourage prostatic dysplasia. Tadalafil/finasteride combination approved for treating BPH Eli Lilly completed a Phase 3 clinical trial in 2013 to study the combination of Tadalafil and Finasteride in patients with BPH and related clinical symptoms which showed that 5mg each of Tadalafil and Finasteride (once daily) showed a reduction in symptoms (scored by total international prostate symptom score. IPSS) from baseline by >5 units (at 12 weeks) whereas the placebo arm (placebo with 5mg Finasteride only) gave a IPSS reduction by 3.76 units. Combination EFTA00810583 BROOKLINE A Division of OM Securities CAPITAL MARKETS Veru, Inc. (VEAL!) I April 05, 2018 also showed a greater reduction on IPSS at other time frames (4.12, 26 weeks) as well as improvement in quality of life (IPSS-QOL) index scores and several international index of erectile function (IIEF) measures. Co-administration of Tadalafil and finasteride is approved for treating initial symptoms of BPH for up to 26 weeks, but compliance is an issue which could lead to increased urological issues like urine retention, UTI and related toxinoses and even death. Veru's proposition is to formulate a combination capsule to target patients with enlarged prostate (>30cc volume) because of BPH to achieve increased convenience of taking 1 pill instead of two and achieve better compliance. As discussed earlier. BPH is a very common condition and affects up to 25% of men and 1.1B men worldwide would suffer from BPH in 2018. FDA has reviewed and validated a BE study in 3O17 and a final BE study is in the offing to support an NDA application that is anticipated for early 2019. Other than men with BPH (>30cc volume), those who experience partial or suboptimal response to finasteride alone or tamsulosin (alone or in combination with finasteride) can benefit from introduction of tadalafil in their treatment in form of a tadalafil + finasteride combination. Veru seems well positioned to take advantage of this generic combination and the barriers to entry are very low or even non-existent. It might help Veru to establish itself as a leader in generic BPH medication market with this and other products that it plans to offer. Ensuring better compliance with an approved combination is an achievable goal and makes good business sense. However, we also note that this is not a great differentiator and the competitive space could get busy if this combination capsule achieves better compliance and ease over co-administration. It would be important on Veru's part to maintain a price parity with current co-administration standards. VERU-944 for hot flashes. Veru is developing VERU-944 or cis-clomiphene for treating hot flashes in men who are on prostate cancer hormonal therapy. There are no drugs that are currently approved for this indication but there is a huge number of patients who suffer nonetheless and represent a market ready for a new solution. Prostate cancer is one of the most common cancers and androgen deprivation therapy (ADT) is an established treatment that reduces the increased male EFTA00810584 BROOKLINE A Division of OM Securities CAPITAL MARKETS Veru, Inc. (VERWI April 05, 2018 hormone (testosterone/dihydrotestosterone) levels so that they do not stimulate growth in prostate cancer cells. These androgens are produced in testicles, and reduction in their levels involves surgical or chemical/medical castration. Surgical castration, also called orchiectomy is done to remove testicles, whereas chemical castration involves administration of female hormone analogs/agonists which eventually results in reduction in androgens. While the exact cause is unclear, reduction/fluctuation in hormone levels is associated with hot flashes, or sensation of sudden intense warmth/heat, flushing and sweating, and '-80% of ADT patients are affected by episodes of hot flashes (30-40% of them moderate to severe) that can be uncomfortable and disruptive to normal physical wellbeing. Hot flashes continue to affect men even years after ADT (48% at 5 years, 40% at 8 years) and as mentioned above, has no approved therapy to manage the condition. Medications like Clomid, originally approved for female fertility in 1967 are often used off-label for hot flashes in men associated with ADT in prostate cancer. Clomid (cis-clomiphene) is an oral nonsteroidal estrogen agonist and has been used off label in men post ADT. This can raise testosterone levels and aid in hormonal imbalance and has been observed to help with hot flashes. Clomid is a mixture of cis-and trans-isomers of clomiphene, out of which cis- clomiphene is a better estrogen agonist than trans-clomiphene and may result in reducing testosterone levels (compared with clomiphene which has trans- clomiphene in majority which might raise testosterone levels). Since ADT works by removal of androgens, cis-clomiphene might be better than a trans- clomiphene heavy mixture at keeping testosterone levels low while still maintaining hormonal balance (and therefore help in managing hot flashes). An established drug and one that has proven safety and tolerability. Clomiphene has seen increase in its off-label use in men with over 88,000 men taking clomiphene in 2016. VERU-944 is a cis-clomiphene formulation that would be used to treat hot flashes. Clomid (Clomiphene) is a mixture of cis- and trans-clomiphene has already been in use for treating hot flashes in ADT men and VERU-944 should be better than Clomid because of its high estrogenic (because of cis-clomiphene content) lower androgenic (low amount of testosterone producing trans- clomiphene) potential. Besides, cis-clomiphene has a higher potency and slower clearance. making it the choice isomer for treating hot flashes. Consequently, 10 EFTA00810585 BROOKLINE A Division of CIM Securities CAPITAL MARKETS Veru, Inc. (VEM.1)1April 05, 2018 when commercially available, we believe that VERU-944 would be favored over Clomid by clinicians for its favorable properties. VERU-944 can tap into a substantial market We note that Clomid is one of the cheapest drugs in the market and is listed in WHO's List of Essential medicine list (as a female fertility drug) that gives it a credibility and a purposeful authority. The full treatment (for its intended use) runs to the tune of a few dollars. We believe that VERU-944 can benefit from the good name of Clomid and can establish a market in men with ADT from prostate cancer. On the other hand. we also feel that replacing Clomid, which has already been in off-label use, to become the new standard would take substantial efforts. Also, we feel that the differentiation from Clomid based on its isomer composition has not yet been proven without doubt to be of substantial advantage for the clinicians to take notice. The pricing would also have to be in line with Clomid to provide a worthy competition to it. Having said that, we are optimistic that VERU- 944 would find its place in the market for treating hot flashes in men, and that these hurdles would be dealt with well, with data and good commercialization efforts. This would be the first approved therapy for hot flashes in men on prostate cancer hormonal therapy. An IND is planned in 2018, followed by a Phase 2 trial dose finding study in 120 men. The planned 4 and 12-week endpoints to study efficacy should reveal dosing and clinical efficacy. We are hopeful that given the well-established background. VERU-944 would be successful in this regard. The market size for men with ADT is about 700.000 in US, and since hot flashes continue even after ADT for many years, VERU-944 would find chronic use. Even with a 30% penetration in the hormone-therapy related hot flashes, Veru estimates that VERU-944 could bring in -$600M annual revenues. The intellectual property should ensure exclusivity in US up to 2035. Other than hot flashes in prostate cancer related hormone therapy, VERU-944 can find use for other indications as well. Prostate cancer is associated with high bone metastases and results in bone loss and bone pain. Addition of estrogen or estrogen agonists like cis-clomiphene can stem/slow the loss, increase bone mineral density, and VERU-944 could potentially be used alone or with other therapies like bisphosphonate or radionuclide therapy. Bone metastases related bone pain occurs in over 40% of prostate cancer patients and is a significant market upwards of a billion dollars. 11 EFTA00810586 BROOKLINE A Division of CIM Securities CAPITAL MARKETS Veru, Inc. (VEAL)) I April 05, 2018 Analyzing conservatively, we expect the first indication to be most meaningful for Veru and it can possibly extract market value with its new cis-formulation. To be considered for other indications. Veru would need to conduct clinical trials, and the timelines could be significantly extended. We do not feel that there are any useful indicators as of now for the planned entry into the bone pain space. While bisphosphonate therapy is associated with ONJ (osteonecrosis of the jaw) and estrogen therapy might avoid causing such extreme side effects, VERU-944 is not differentiated well enough in terms of data sufficiently to stand alone. Without more conclusive studies, the hope for it in the bone indication is that it will be an effective product that would find use in conjunction with other therapies, which could be a significant market for VERU-944. We will keep a close eye on developments in this arena but realize that it could be some time before we see VERU-944 for bone remineralization. VERU-111 is one