Staff reviewers said the data did not help in clearly identifying a relevant patient population and remained unclear about the mortality rate in the placebo group.
Veru has applied for emergency use authorization for its drug, sabizabulin, as a treatment for hospitalized moderate-to-severe COVID patients at high risk of developing an acute respiratory distress syndrome.
The application is based on data from a study involving 210 patients that showed sabizabulin led to a 55.2% reduction in death rates versus placebo.
A panel of FDA's outside experts is scheduled to discuss approval of the drug later this week.
Shares of Veru rose 16.6% in early trading.
(Reporting by Bhanvi Satija and Raghav Mahobe in Bengaluru; Editing by Shinjini Ganguli)