Veru Inc.
Q2 2021 Earnings Call Transcript

Published: 12 May 2021

[Operator:]

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

[Samuel Fisch:]

Good morning. The statements made on this conference call may be forward-looking statements. Forward-looking statements may include, but are not necessarily limited to, statements of the company's plans, objectives, expectations, or intentions regarding its business operations, finances, development and product portfolio. Such forward-looking statements are subject to known and unknown risks and uncertainties. And actual results may differ significantly from those projected, suggested, or included in any forward-looking statements. Risks that may cause actual results or developments to differ materially are contained in our 10-Q and 10-K SEC filings.

[Mitchell Steiner:]

Thank you, Sam. And good morning. With me on this morning's call are Michele Greco, CFO and CAO; Michael Purvis, EVP, General Counsel and Corporate Strategy; and Sam Fisch, Director of Investor Relations. Thank you for joining our call. Veru is a late clinical-stage oncology biopharmaceutical company focused on developing novel medicines for the management of two of the most prevalent cancers, prostate cancer and breast cancer. We continue to invest cash generated from our sexual health commercial business into the clinical development of our potentially high-value oncology drug candidates, so that our shareholders might realize the maximum value of our oncology biopharmaceutical company. This morning, we will discuss the progress of our late clinical stage prostate cancer, breast cancer drug pipelines, as well as the sabizabulin, the new name for VERU-111 Phase III study for the treatment of COVID-19. We'll then provide financial highlights for our second quarter fiscal year 2021. In oncology, we're focused on providing new and novel oral therapies with unique mechanisms of action and favorable safety profiles for both advanced prostate and breast cancers. Veru anticipates registration clinical trials for up to four oncology indications and the additional registration Phase III clinical trial for sabizabulin for COVID-19, makes a total of five potentially registration-enabling clinical trials to commence in calendar year 2021. Prostate cancer, the company continues to make strong clinical progress, advancing sabizabulin as a treatment for metastatic castration and androgen receptor targeting agent with resistant prostate cancer, and VERU-100 for androgen deprivation therapy for metastatic prostate cancer. Sabizabulin, which as I mentioned is the new name for VERU-111, is an oral first-in-class new chemical entity that targets crosslinks and disrupts alpha and beta tubulin subunits of microtubules to disrupt the cytoskeleton. And in prostate cancer, this also results in the disruption of the androgen receptor transport from the cytoplasm into the nucleus. Sabizabulin is being evaluated in open label Phase Ib study in men with metastatic castration and androgen receptor targeting agent resistant prostate cancer. The Phase Ib clinical study enrolled 39 men in the Phase I portion and 41 men in the Phase II portion. The Phase II portion is completely enrolled and still ongoing. The safety of sabizabulin appears to be similar to an AR targeting agent like abiraterone and enzalutamide based on what has been reported in literature.

[Michele Greco:]

Thank you, Dr. Steiner. As Dr. Steiner indicated, we're having a great year. In December, the company sold PREBOOST for $20 million. And in February, the company completed an equity raise, which resulted in $107.9 million in net proceeds after deducting underwriting commissions and costs. And to give you a sense of the continuation of our revenue growth trajectory, in the US prescription channel, we sold 171,900 units year-to-date in fiscal 2020 compared to 247,200 units year-to-date in fiscal 2021, an increase of 44%. Let's start our highlights with the second quarter results for the three months ended March 31, 2021. Overall net revenues were up 34% to $13.3 million from $9.9 million in the prior-year second quarter. The company reported record quarterly sales for its US prescription business of $10.3 million, an increase of 48% from $7 million in the prior-year second quarter. Overall, gross profit was $10.9 million or 82% of net revenue compared to $7.4 million or 75% of net revenues in the prior-year quarter. The increase in gross profit and gross margin is driven primarily by increased sales in the US FC2 prescription business. Operating expenses for the quarter increased to $12.4 million compared to the prior-year quarter of $7.7 million. Research and development costs were $7.6 million compared to $3.9 million in the prior-year quarter. The operating loss for the quarter was $1.5 million compared to $300,000 in the prior-year quarter. Non-operating expenses were $1.4 million compared to $644,000 in the prior-year second quarter, and primarily consisted of interest expense and the change in the fair value of the derivative liabilities related to the synthetic royalty financing. We entered the synthetic royalty financing during March of 2018. For the quarter, we recorded a tax expense of $22,000 compared to a tax benefit of $133,000 in the prior-year second quarter. The bottom line results for the second quarter fiscal 2021 was a net loss of $2.8 million or $0.04 per diluted common share compared to a net loss of $811,000 or $0.01 per diluted common share in the prior-year second quarter. Now turning to highlights for the results for the six months ended March 31, 2021. For the first six months of fiscal 2021, total net revenues were up 36% to $28 million from $20.5 million in the prior-year period, a record high for the six month period ended March 31. Company reported growth in the FC2 sales in the US prescription business and in the global public sector business. Net revenue from the US prescription business was up 49% to $19.4 million from $13 million in the prior-year period. The global public sector business was up 11% to $7.7 million. Overall, gross profit was $21.7 million or 78% of net revenues compared to $14.7 million or 72% of net revenues in the prior year period. The increase in profit and gross margin is due primarily to the increase in the US prescription business. Operating expenses increased by $5.6 million to $22.4 million compared to the prior-year period of $16.8 million. The increase is primarily driven by research and development costs, which increased by $4 million to $13.3 million from $9.2 million in the prior-year period. Operating income for the period was $17.7 million compared to an operating loss of $2.1 million in the prior-year period, an increase of $19.8 million. The increase is primarily due the gain on the sale of PREBOOST of $18.4 million. Excluding this gain, we had operating loss of $694,000 for the period. Non-operating expenses were $3.2 million compared to $2.2 million in the prior-year period, and primarily consisted of interest expense and the change in the fair value of the derivative liabilities related to the synthetic royalty financing. For the six month period, we recorded a tax expense of $100,000 compared to a tax benefit of $210,000 in the prior-year period. The company has net operating loss carryforwards for US federal tax purposes of $41.7 million, with $13.5 million expiring in years through 2038 and $28.2 million which has been carried forward indefinitely. Our UK subsidiary has net operating loss carryforwards of $61.3 million, which do not expire. The bottom line results of the first six months of fiscal 2021 was net income of $14.4 million or $0.18 per diluted common share compared to a net loss of $4.1 million or $0.06 per diluted common share in the prior period. Excluding the gain on sale of PREBOOST, the adjusted net loss was $4 million or $0.06 per diluted common share in the current period. Turning to our balance sheet. As of March 31, 2021, our cash balance was $136.7 million. Our accounts receivable were $5.1 million. Due to our sale of PREBOOST, we added $15 million in cash during December and $5 million in notes receivable, which will be collected over the next 15 months. In February, we completed an underwritten public offering of 7,419,354 shares of our common stock at a public offering price of $15.50 per share. Net proceeds were $107.9 million. Our net working capital was $137.2 million at March 31, 2021 compared to $12.3 million at September 30, 2020. During the six months ended March 31, 2021, we used cash of $1.9 million for operating activities compared with $4.9 million used for operating activities in the prior period. Overall, we're delighted to see the continued increases in sales in the US prescription business and look forward to increasing sales in the global public sector business in the third quarter. These revenue sources, together with our strong balance sheet, continue to be a source of funds we use to invest in our promising pharmaceutical clinical development programs, as we continue to transform our company into an oncology biopharmaceutical company with a focus on developing novel medicines for the management of prostate and breast cancers. Now, I'd like to turn the call back to Dr. Steiner.

[Mitchell Steiner:]

Thank you, Michelle. Our company's fundamentals are strong. We've enjoyed another strong financial quarter with record US FC2 prescription net revenues, which has allowed us to significantly advance our clinical programs. Based on year-to-date performance, we expect to have a record year in revenue. With the robust performance of the sexual health business, plus the prospect of additional future revenue from TADFIN, coupled with our strong cash position, we believe that we'll be able to substantially invest in the continuous clinical development of our prostate and breast cancer drug product candidates, as well as with sabizabulin COVID-19 Phase III clinical study. We plan to continue to generate robust growing revenues for the sexual health business. As previously announced, the company also continues to explore strategic alternatives regarding its legacy female health company business, which markets the FC2 Female Condom/Internal Condom, including continuing to operate the business. It's been a very, very busy quarter as we have successfully continue to transform our company into a late clinical stage oncology biopharmaceutical company supported by growing revenue from our cash generating sexual health business. We plan to enroll potentially up to five registration studies and two Phase II studies this calendar year – more specifically, prostate cancer, sabizabulin in an open label Phase III VERACITY study in men with metastatic castration and androgen receptor targeted agent resistant prostate cancer; VERU-100 in an open label Phase II; and later in the year, an open label Phase III for hormone sensitive metastatic prostate cancer. For breast cancer, enobosarm in an open label Phase III ARTEST in AR positive, ER positive, HER2 metastatic breast cancer in a third line metastatic setting after failing a nonsteroidal AI fulvestrant and a CDK 4/6 inhibitor; and enobosarm plus abemaciclib combination in an open label Phase II study in AR positive, ER positive, HER2 negative metastatic breast cancer in a second line metastatic setting after failing palbociclib plus an ER blocking agent; sabizabulin, sabizabulin plus Trodelvy combination or Trodelvy alone in an open label Phase IIb study in metastatic triple negative breast cancer patients that have failed at least two systemic chemotherapies, including an IV taxane. And for COVID-19, sabizabulin 9 milligrams in Phase III trial, double blind, multicenter, multinational, randomized placebo controlled trial in hospitalized COVID-19 patients who are at high risk of ARDS. And if we do confirm the promising results that we observe in the completed Phase II clinical study, we expect to seek emergency use authorization for this indication. With that, I will now open the call to questions. Operator?

[Operator:]

. And the first question comes from Chris Howerton with Jefferies.

[Christopher Howerton:]

Congratulations on the very broad progress here. You mentioned the team. I guess for the two questions for me, first up with respect to sabizabulin, I guess could you give us just a little more color in terms of what the impetus was to reformulate the drug? It sounds like a more bioavailability dosage form. And then what additional kind of operational work may be required to have that formulation fully ready to go for the upcoming clinical trials and, of course, commercialization? The second question that I have is related to AR expression levels and the potential for a companion diagnostic. So, I guess, for that feature of the enobosarm development program, is the expectation that there will be some cut-off of AR expression? And if so, or if not, I guess, will we learn – what will we learn at the ASCO presentation with respect to that?

[Mitchell Steiner:]

The first question is on the reformulation. As you know, in drug development, you typically start with the cheapest way to do this study. And that is you take the drug and you pack it into a capsule, and that's what you give patients in their Phase Ib. So, what we've done is the to-be-marketed form – so I've got to be careful because the lawyers get mad when I say that – but the to-be-marketed form doesn't mean that we've got approved. It means that it's the form that we would use if approved. And typically, in your Phase III, you have to use the form that is to be marketed, so that you have your commercial form. So, to answer your question, there's no further work. Serendipitously, when they put in the excipient and created the formulation for the Phase III and we did the PK study in the Phase Ib/II, it turns out that the excipients allowed for better oral bioavailability. And so, that means that the 32 milligram dose is equivalent to the 63 milligram dose. And it raised the question that, in the Phase Ib/II, where did the 31 milligrams go? The answer is, the other 31 milligrams didn't disappear. It stays in the gut. And it may be responsible maybe for some of the diarrhea that we're seeing, for example, that's grade 1, grade 2. So, one potential benefit of the reformulation is that we may, in the Phase III setting, see fewer side effects that may be related to residual drug that was not absorbed. So, we don't have do any additional work. We have the to-be-marketed form. And that form is the one that we're going to be using, not only in the Phase III for prostate, we're using it in the 9 milligram version in the Phase III for COVID-19, which will start this week, and we're using it also in the triple negative breast cancer study that has sabizabulin going against Trodelvy and in combination with Trodelvy. Second question has to do with AR expression. This is exciting because, every so often, you'll find somebody say they have a biomarker or a targeted marker. But this is truly a targeted marker. And what we're going to be presenting in the June ASCO meeting are the data to support that. And as you would imagine, there is some expression level where you get better activity because, for something to be considered a targeted marker, for activity to happen, it has to happen through that marker. So, in this case, you wouldn't expect activity with enobosarm if the androgen receptor is not present. And the second thing is, the more of that marker that's being expressed, the better the result should be, at least from an anti-tumor activity. And we see all that. And so, we're going to be presenting in the ASCO paper – at ASCO presentation, is the data to support that, particularly as it relates to objective tumor responses, target tumor responses, clinical benefit rates, radiographic progression free survival, it all goes as you would expect if AR is truly the reason why enobosarm is working. And so, because of that, it becomes critical that you have a companion diagnostic that can be done. And its immunohistochemistry, so it's not complicated, which is a good thing for us because we don't want a complicated companion diagnostic. One that could be easily done, can be done across the world, we don't want that to be the bottleneck. But to be able to identify women that are most likely to respond means that we can actually stack the deck in our favor, in the sense that we're going to be putting in women that will have, hopefully, a robust response to enobosarm, so that we can blow away the active control. So, that's the intent. And so, we're not a companion diagnostic company. And so, for us to do something that's not in the wheelhouse doesn't make sense. And so, we are in discussions with companies that – once we announce those companies, you're going to say these guys know what the hell they're doing and they will be able to work with us in parallel, so the companion diagnostic and the drugs are both available at the same time. And they've done this over and over because we can do therapeutics, let them do the diagnostics. But by having a companion diagnostic, it also is an opportunity for laboratories – breast cancer is one of those cancers that when a woman is diagnosed, she's automatically molecularly characterized, meaning that they look for the estrogen receptor, the progesterone receptor, HER2 expression, in some cases BRCA1 and BRCA2. So, the androgen receptor can be added in that very select group of initial molecular characterizations of the breast cancer. And the report says – oh, by the way, enobosarm is available. You can't ask for a better marketing than that because then that – we'll be the only one available for it. So, yes, you'll be learning at the ASCO meeting, you'll be seeing the cut off, the correlations and all that stuff. Again, we're excited because this just helps us enrich our patient population for those patients. Now, the last question somebody may ask is, well, if you do that, are you reducing the number of patients so much that you've really reduced the number of patients in your market. Refresh your memory, 85% of women are going to be AR positive. And of those women, even if we had half those, that's a huge population of women that will still be eligible for our AR targeted population. Now, compared to BRCA1 and BRCA2, you're at 5% to 10%. So, I think from the standpoint of having a drug that works majority of the time in a good number of patients would make sense.

[Christopher Howerton:]

I look forward to that presentation at ASCO.

[Operator:]

And the next question comes from Brandon Folkes with Cantor Fitzgerald.

[Brandon Folkes:]

Congratulations on all the progress. Maybe, firstly, just what is your degree of urgency to sell the female condom business? Obviously, continues to do well and you're well capitalized now. So, just any color there? And then secondly, sorry, if I missed this, but on the enobosarm Phase II combination study that starts next quarter, will this be a registration study?

[Mitchell Steiner:]

Your first question is kind of where we are with the female health company business. So, as we announced, we are in, again, another record year. We had a record year last year. This year looks like it's heading that way again. And you can see from the numbers, it looks like these – any math you do, we're on a growth trajectory that is high growth. And the other thing that's important to realize is the margins that we're receiving because we've changed the business from a public sector business to a US prescription business, is, as you would imagine, is more like a prescription product. And as a result, it allows us to have – and let me make one more comment. And because we're not selling the prescription product using a marketing and selling sales force of 70 people or 100 people, which is eating your profits, we spend almost no money on marketing and selling. So, essentially, all of that money can be reinvested into our projects. And so, that's why we're able to run all of these projects and our cash is strong. And so, I think the shareholders want us to be able to invest with multiple shots on goal in these multi-billion dollar opportunities and to be able to have this foundation, this platform to do that is wonderful. And so, we're very blessed and we're very excited that the team has been able to do this. With that said, the best time to look for a possible alternative strategy to monetize your business is when it's doing well and it's growing. The flip side of it is, when it's doing well and it's growing, it takes a lot of pressure off the company because you're not trying to do a fire sale. You want to get the best deal that you can get. Interestingly, by doing a successful fundraiser that we did back in February, it put enough resources in the bank that we're also in a position that we don't have to take any deal that comes in for the female health company because we have the resources to keep going. So, I think we've put ourselves in the best, best position to monetize this at the best, best price for shareholders and not put ourselves in any time strain or – we're in the driver's seat. So, from that standpoint, what I can tell you is, there's a lot of activity and we continue to explore all kinds of options. And because we're not stressed with time because we have the money and we're moving forward, we're going to do this in a way that's best for the shareholders. As it relates to your second question, which is enobosarm's second indication – it actually is the second indication. So, the FDA said you can do a combination therapy. There's a lot of things you have to do with combination therapies. First is to make sure that there's safety in the combination therapies. And so, that's really a separate program. And so, we decided that, based on the FDA's response, that the easiest thing to do is enobosarm monotherapy in a third line setting, we have the data. We treated heavily pretreated women that have failed estrogen receptor blocking agents and 12% failed CDK 4/6 inhibitors, we see good activity, preclinical data. So, we're good to go with ARTEST Phase III. But, boy, wouldn't it be nice to move in earlier in a second line setting. So that means if 83% of patients are coming in with ER positive breast cancer and they're getting treated with a CDK 4/6 inhibitor, which almost predominantly is palbociclib and an estrogen receptor targeted agent, whether it's the non-steroidal AI or fulvestrant, what do you do after they fail? So, initially, we were told this is a crowded space. There's a lot of drugs trying to get into the space. But, literally overnight, because of CDK 4/6 inhibitors, that crowded space has become less crowded because of the fact that after first line therapy, the majority women are looking for something that has not been proven. So, the Phase II that we're doing, we're not thinking of it as a registration trial. We're thinking of the Phase II in a second line setting, is to provide us the information we need to confirm it in a Phase III study.

[Brandon Folkes:]

Congrats again on all the progress.

[Operator:]

And the next question comes from Leland Gershell with Oppenheimer.

[Leland Gershell:]

Thanks for the comprehensive update on all your plans. Just a quick question, just really a clarification. So, the exploratory arm with CDK 4/6 inhibitor that you had contemplated for that ARTEST study is no longer going to be included in ARTEST, correct? Your CDK 4/6 combination will be restricted only to the Phase II? Or will you be keeping that exploratory in the Phase III as well?

[Mitchell Steiner:]

No, no. So, we moved the exploratory arm out of the Phase III, so that the Phase III then becomes simpler, easier. And as you know, every time we add an additional arm, it's another statistical hurdle. So, the idea was just make it clean, do enobosarm monotherapy versus another estrogen blocking agent, which these women that failed . And so, it's a good control for us to go up against. And third line setting, these women would have exhausted all of these things. And it's pre-chemo and our side effect profile looks pretty good. It looks like an endocrine therapy. It's not a chemotherapy. There's no diarrhea, vomiting, and hair loss and all that stuff. And so, we feel like that's a great spot for us to be. But to move in earlier, that was our thinking. If we're going to do combination therapy – because one of the things the agency asked for is that if you can do combination therapy, you just can't say I'm going to do CDK 4/6 inhibitor and an estrogen receptor blocking agent. They want you to specifically name CDK 4/6 inhibitor. That kind of makes sense, right? Because if you look at the CDK 4/6 inhibitors, palbociclib has a different safety profile than, for example, ribociclib. And so, one of the reasons why palbo is used so much and is the leader is because of its safety profile and because it was first to market. So, that's why in the Phase II – in the combination program, which in the Phase II were very specific, since palbo is being used 80% of the time in first line, then we're going to come in with ademaciclib plus enobosarm and go up against what's standard right now, which is another estrogen receptor blocking agent. And my God, can you imagine if we're in a second line setting and moving enobosarm earlier. So, they're very separate programs, a Phase III program for third line setting, Phase II program to go in earlier. And I think we'll get a lot of credit for good Phase II data because then, at that point, you're just kind of confirming your Phase III. So, essentially, what we've done is we just increased the depth and breadth of the enobosarm program. And there'll be other indications that we'll be able to go into the we'll announce later. But when you're the only game going after the androgen receptor, which is there, in some cases, more prevalent than an estrogen receptor in breast cancer, then we have to continue to explore how we're going to build the indications for the drug.

[Leland Gershell:]

That makes sense. And then just to follow up, with the tolerability of enobosarm, any thoughts kind of on a maintenance type use pattern down the line, patients who may get through sort of an initial treatment period and then they can stay on it, kind of those at maintenance? Any thoughts there?

[Mitchell Steiner:]

So you're talking about in the trial or are you talking about in real life?

[Leland Gershell:]

No, no, no. Real world.

[Mitchell Steiner:]

In the real world, since we're using radiographic progression free survival as the endpoint, then the patient gets to stay on until they progress. So, it won't be like induction chemotherapy followed by maintenance chemotherapy because it's an endocrine therapy. How's it any different than tamoxifen being used for five years or an aromatase inhibitor being used for three to five years? So, if we're fortunate, the treatment would be alongside the patient for as long as the patient is stable or benefiting from it. And so, we don't have to do any maintenance studies. They'll continue to take it until – it's almost similar to some of the cytostatic drugs like the tyrosine kinase inhibitors where patients are on it for a while even in lung cancer.

[Operator:]

And the next question comes from Kumar Raja with Brookline Capital Markets.

[Kumar Raja:]

Congratulations. With regard to COVID-19 trials and given the variability in standard of care with regard to different regions, how do you think that is going to impact the results? And also, looks like you're going with a 60-day endpoint in the Phase III compared to the 29 day, what are the factors driving this?

[Mitchell Steiner:]

The first question has to do with recruitment, I guess, geography and potential effect on result? It's a very good question. And so, from that standpoint, in the United States, we still have several sites in US that we're opening up. You know it is weird, it's become almost like a checkerboard, where some areas look fine and some areas are not fine. And so, even though we're thinking we're getting out of it in the US, if you look at it, it was still between 39,000 and 50,000 cases a day and you still have a death rate that is significant. And so, I don't know how long that's going to go. But we're in position given the Phase II to take advantage of that in the US. Now, one of the reasons why we picked – instead of ICU days and all that stuff which we're going to measure, we picked mortality. Why did you pick mortality? We picked mortality because you can't fake a death. So, if a patient dies, you can count that pretty easily. If a patient has respiratory failure, is it respiratory failure because of standard of care, is it respiratory failure because they couldn't get oxygen. Is it days in the hospital because they needed that bed because they were sicker patients? There's too many other variables that go into some of these other endpoints that people use in the COVID-19 studies. Since we're going after hospitalized patients with a WHO score of 5 or greater, by definition, these are the sickest patients. And death is a pretty good endpoint to determine whether your medicine is working or not. So, even if we go into other geographic locations, like Brazil, Mexico, Argentina and Colombia, as I mentioned, and hospitals, by the way, in those countries are good enough and we think that – and again, of course, the FDA will always make you look at each region and how it contributes, but we think we'll be okay. We have to back up in Europe. As you know, Europe is about to go through another surge. And so, we do have backups if we need to. We're going to be incredibly aggressive and making sure we fill this trial by year-end. And so, I think we're going to be fine because, at the end point, in terms of different geographies, but we will look at each geography and their contribution to the final answer at the end of the study. As it relates to 60 days versus the 29 days, looking at a mortality endpoint, we picked 29 days because the FDA picked 29 days. And if you look at almost every study that was done contemporarily, it was 29 days. It turns out that we want to capture as much good information as we can. And what we've learned in our study is if patients were not doing well, you're going to capture most of them by day 29. But, boy oh boy, it would be nice to see whether or not we have a benefit beyond that. And so, day 60 is really what was in our previous study, our safety window. So, the idea is, if you capture it for 60 days and death is an endpoint and the patient is in respiratory failure and they're able to keep them alive a little bit longer past day 29, but then he dies at day 35 or day 40 and he's in the placebo group, you want to capture that. And so, I think what it will do is it will mortality data more robust.

[Operator:]

The next question comes from Yi Chen with H.C. Wainwright.

[Yi Chen:]

Just to clarify, is this the first time for 9 milligrams, 32 milligram dose formulation of sabizabulin to be used in their respective patient groups?

[Mitchell Steiner:]

Yeah. So, it'll be the first time for those formulations. But those formulations were bridged with a PK study that we did in the Phase II study in prostate where we looked at the 63 milligram dose blood levels compared to the to-be-marketed Phase III dose forms. And based on those data, which showed bioavailability was 100% better than what it was before, then we went to the agency and the agency reviewed the formulations and agreed that the doses that we picked for the Phase IIIs were acceptable, given what we've learned in the PK study in the Phase II. So, the answer is, yeah, it's the first time we're using those formulations, but we know what the drug levels are going to be and the drug level is going to be consistent with what we did in the Phase IIs. So, the 9 milligram will be similar to the 18 milligram for COVID-19 and the 32 milligram is similar to the 63 milligram dose that we use in the Phase Ib/II prostate.

[Yi Chen:]

My second question is, how are the operating expenses going to trend with multiple trial initiations throughout the year?

[Mitchell Steiner:]

I lost the first part of your question. Say it again, please.

[Yi Chen:]

How are the operating expenses going to trend with multiple trial initiations?

[Mitchell Steiner:]

Michelle, you want to answer that question?

[Michele Greco:]

We've indicated that our drug expenses increased for this period. Let me just pull those numbers there. Our R&D expense went – on a quarter from $3.9 million last year to $7.5 million. And for the six months from $9.2 million to $13.5 million. They're going to continue to increase. Again, this quarter, we were at $7.5 million. We're going to continue to increase those as we continue to add all these trials that Dr. Steiner just went over on the call that will going on and being added over this calendar year. So they're going to continue to slowly increase.

[Operator:]

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

[Mitchell Steiner:]

Thank you. I appreciate you joining us on today's call. I look forward to updating you on all our progress at the next investors' call. Thank you again.

[Operator:]

Thank you. The digital replay of the conference call will be available beginning approximately noon Eastern Time today, May 12, by dialing 1-877-344-7529 in the US and 1-412-317-0088 internationally. You'll be prompted to enter the replay access code, which will be 10154431. Please record your name and company when joining. The conference has now concluded. Thank you for attending today's discussion.