Company Overview - Verrica Pharmaceuticals Inc. is a dermatology therapeutics company focused on developing medications for skin diseases that require medical interventions [3] - The company's product YCANTH® (VP-102) is the first and only FDA-approved treatment for molluscum contagiosum, a viral skin infection affecting approximately 6 million people in the U.S., primarily children [3] - YCANTH® (VP-102) is also being developed to address common warts, which represent a significant unmet need in medical dermatology [3] - Verrica has entered a worldwide license agreement with Lytix Biopharma AS to develop and commercialize VP-315 for non-melanoma skin cancers, including basal cell carcinoma and squamous cell carcinoma [3] Upcoming Events - Jayson Rieger, PhD, MBA, President and CEO of Verrica, will present at the Jefferies Global Healthcare Conference in New York City [1] - The event is scheduled for June 4, 2025, at 4:20 pm ET [1] - Participants can access a live webcast of the event through the provided link or via the Investors/Presentations & Events section of the Verrica website [2]

Group 1 - Verrica Pharmaceuticals held its Q1 2025 Corporate Update Conference Call on May 13, 2025, with key participants including the CEO, CFO, and COO [1][3] - The call included discussions on the commercialization of YCANTH for treating molluscum contagiosum in the U.S., revenue growth, regulatory developments, and the company's product candidates [4][5] - Management emphasized the importance of forward-looking statements regarding the company's business strategy and operations, highlighting potential risks and uncertainties [4][5]

Over the last four quarters, the company has surpassed consensus EPS estimates three times. Verrica Pharmaceuticals Inc. (VRCA) came out with a quarterly loss of $0.10 per share versus the Zacks Consensus Estimate of a loss of $0.14. This compares to loss of $0.38 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 28.57%. A quarter ago, it was expected that this company would post a loss of $0.25 per share when it actually produ ...

Financial Data and Key Metrics Changes - In Q1 2025, total revenues were reported at $3.4 million, primarily from WICANT sales, reflecting a significant increase in demand [6][16] - The GAAP net loss for Q1 2025 was $9.7 million, or $0.10 per share, a reduction from a net loss of $20.3 million, or $0.44 per share in Q1 2024 [17] - Non-GAAP net loss for Q1 2025 was $7.8 million, or $0.08 per share, compared to a loss of $17.8 million, or $0.38 per share in the same period last year [17] Business Line Data and Key Metrics Changes - WICANT's dispensed applicator units increased by 16.7% over Q4 2024, surpassing 10,000 units for the first time since its launch [6][7] - Gross product margins for Q1 2025 were approximately 88%, with product revenue costs amounting to $400,000, including $47,000 in obsolete inventory costs [16][17] - Research and development expenses decreased to $2.3 million in Q1 2025, down from $4.9 million in Q1 2024, primarily due to reduced clinical trial expenses [17] Market Data and Key Metrics Changes - The company is focusing on territories with high prevalence of molluscum contagiosum and has established strong insurance coverage, leading to improved sales force productivity [8][9] - The company is expanding its distribution network by adding local independent pharmacies alongside national specialty pharmacy partners [9] Company Strategy and Development Direction - The company is executing a focused commercialization strategy aimed at driving demand for WICANT, which is expected to become the standard of care for molluscum contagiosum [19] - The clinical pipeline includes advancing the phase three program for WICANT in treating common warts and the development of BP315 for basal cell carcinoma, which has shown promising results [7][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory, citing positive feedback from healthcare professionals and improved patient access [19] - The company is exploring opportunities to strengthen its balance sheet while continuing to advance its commercial and clinical development efforts [18] Other Important Information - The company appointed Dr. Noah Rosenberg as Chief Medical Officer and Dr. Gavin Corcoran to the Board of Directors, enhancing its leadership team [13][14] - As of March 31, 2025, the company had cash and cash equivalents of $29.6 million, which may not be sufficient for one year of operations unless certain milestone payments are received [17][18] Q&A Session Summary Question: Could you discuss your success in targeting pediatricians and the current split of pediatric dermatologists versus pediatricians writing WICANT? - Management noted an increasing number of pediatricians prescribing WICANT, with strong advocacy from dermatologists as well [21][23] Question: What preparations are ongoing to capture potential summer patient demand for WICANT? - Management indicated marketing efforts are in place to build awareness of molluscum contagiosum and the availability of WICANT, anticipating a potential seasonal uptick in demand [24][25] Question: How is the conversion time between accounts receivable and top-line revenue for WICANT trending? - Management stated that with normalized inventory levels and smaller, more frequent orders, they expect stabilization in cash conversion from receivables [30][31] Question: What is the current split between commercial and Medicaid coverage for molluscum? - Management indicated a higher percentage of pediatric patients are covered under Medicaid, while dermatology patients tend to have more commercial coverage [36][37] Question: What trends are being observed in reordering and the number of applicators per patient? - Management reported solid growth and retention in customer reorders, indicating positive clinician experiences with the product [42][43]

Financial Data and Key Metrics Changes - In Q1 2025, the company reported total revenues of $3,400,000, primarily from WICANT, with gross product margins around 88% [16][17] - The GAAP net loss was $9,700,000 or $0.10 per share, a significant improvement from a net loss of $20,300,000 or $0.44 per share in Q1 2024 [17] - Non-GAAP net loss for Q1 2025 was $7,800,000 or $0.08 per share, compared to $17,800,000 or $0.38 per share in the same period last year [17][18] Business Line Data and Key Metrics Changes - WICANT's dispensed applicator units increased by 16.7% over Q4 2024, surpassing 10,000 units for the first time since its launch [6][7] - Collaboration revenues totaled $17,000 in Q1 2025, related to the supply of applicators to Torii Pharmaceutical [16] Market Data and Key Metrics Changes - The company is focusing on territories with high prevalence of molluscum and has established strong insurance coverage, leading to improved sales force productivity [8][9] - The company is expanding its distribution network by adding local independent pharmacies alongside national specialty pharmacy partners [9] Company Strategy and Development Direction - The company is executing a focused commercialization strategy aimed at driving demand for WICANT, which is expected to become the standard of care for molluscum contagiosum [19] - The clinical pipeline includes advancing the phase three program for WICANT in treating common warts and the development of BP315 for basal cell carcinoma [7][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory, citing positive feedback from healthcare professionals and improved patient access [19] - The company is exploring opportunities to strengthen its balance sheet while advancing commercial and clinical development efforts [18] Other Important Information - The company appointed Dr. Noah Rosenberg as Chief Medical Officer and Dr. Gavin Corcoran to the Board of Directors, enhancing its leadership team [13][14] Q&A Session Summary Question: Discussion on targeting pediatricians and summer demand - Management noted an increasing number of pediatricians prescribing WICANT, with marketing efforts aimed at building awareness for the treatment [22][25] Question: Conversion time between accounts receivable and revenue - The company offers sixty-day payment terms to distributors, expecting stabilization in cash conversion as inventory levels normalize [31][32] Question: Overall TAM for molluscum and coverage split - Management indicated a significant percentage of pediatric patients are covered under Medicaid, while dermatologists have a higher percentage of commercial pay [36] Question: Trends in reordering and applicators per patient - The company is seeing solid growth in customer retention and reordering, indicating positive clinician experiences with the product [42][43]

Product Approval and Launch - YCANTH (VP-102) was approved by the FDA in July 2023 for the treatment of molluscum contagiosum in patients aged two years and older [125]. - The commercial launch of YCANTH (VP-102) occurred in August 2023, supported by a specialized sales team of 35 representatives [126]. - The FDA approved YCANTH (VP-102) for the treatment of molluscum contagiosum on July 21, 2023, with the first commercial sale occurring in August 2023 [165]. Financial Performance - Total revenue for the three months ended March 31, 2025, was $3.4 million, a decrease of 10.1% from $3.8 million in the same period of 2024 [154]. - Product revenue, net increased to $3.4 million for the three months ended March 31, 2025, compared to $3.2 million for the same period in 2024, reflecting a growth of 5.9% [155]. - Collaboration revenue significantly decreased to $17,000 for the three months ended March 31, 2025, from $594,000 in the same period of 2024, a decline of 97.1% [156]. - Total operating expenses decreased to $11.6 million for the three months ended March 31, 2025, down 48.4% from $22.4 million in 2024 [154]. - Net loss narrowed to $9.7 million for the three months ended March 31, 2025, compared to a net loss of $20.3 million in the same period of 2024, an improvement of 52.3% [154]. - Cash and cash equivalents as of March 31, 2025, were $29.6 million, following a net decrease in cash and cash equivalents of $16.7 million during the quarter [165][169]. - Operating activities used $12.7 million of cash during the three months ended March 31, 2025, compared to $19.9 million in the same period of 2024, a reduction of 36.1% [170][171]. Funding and Financial Obligations - The company raised $39.6 million in net proceeds from an underwritten offering of 45,518,243 shares of common stock in November 2024 [133]. - The company is obligated to start making principal payments on a $50 million loan beginning January 1, 2025, due to not meeting specified revenue thresholds [131]. - The Credit Agreement requires the company to maintain a liquidity of at least $10 million and has a waiver for the "going concern" qualification for recent financial statements [132]. - The company anticipates needing substantial additional financing to fund ongoing research and development activities and commercialization efforts [174]. - The company plans to address its going concern issues by obtaining additional funding through equity offerings, debt financing, collaborations, and licensing arrangements [176]. - A milestone payment of $8.0 million is due from Torii upon the first patient dosed in Japan, which may provide additional liquidity in 2025 [176]. - The company relies solely on sales of YCANTH (VP-102) for near-term commercial revenues, with ongoing needs for additional financing [177]. - Future capital requirements will depend on various factors, including clinical trial outcomes and regulatory reviews [178]. - The company may experience dilution of existing stockholders' interests if additional capital is raised through equity or convertible debt securities [179]. - If unable to raise funds, the company may need to delay or terminate product development efforts [180]. Research and Development - The company plans to advance YCANTH (VP-102) for common warts through a global phase three program, potentially starting in mid-2025 [127]. - Research and development expenses are anticipated to increase as the company conducts clinical trials for YCANTH (VP-102) and VP-315 for BCC [148]. - The company is developing VP-315 for the treatment of basal cell carcinoma and expects to report additional data in mid-2025 [129]. Market Risks and Uncertainties - The company faces substantial uncertainty regarding the commercialization of YCANTH (VP-102) and may not achieve necessary data for marketing approval [177]. - As of March 31, 2025, the company had an accumulated deficit of $316.8 million and cash, and cash equivalents of $29.6 million, expected to last until Q3 2025 [175]. - There have been no material changes to the company's disclosures about market risks since the last annual report [182]. - As of March 31, 2025, there have been no material changes to the company's contractual obligations and commitments [181].

Revenue Performance - Verrica reported $3.4 million in YCANTH revenue for Q1 2025, reflecting a 16.7% growth over Q4 2024, with over 10,000 applicator units dispensed[1][3][10] - Collaboration revenue decreased to $17, down from $594 in Q1 2024, contributing to a total revenue of $3.4 million for Q1 2025[10][18] Expenses and Cost Management - The company experienced a decrease in selling, general, and administrative expenses to $8.8 million in Q1 2025, down from $16.3 million in Q1 2024, a reduction of $7.5 million[10][13] - Research and development expenses were $2.3 million in Q1 2025, compared to $4.9 million in Q1 2024, a decrease of $2.6 million primarily due to reduced clinical trial expenses for VP-315[10][13] - Costs of product revenue were $0.4 million for Q1 2025, compared to $0.5 million for Q1 2024, reflecting a decrease due to obsolete inventory write-offs[10][13] - Total operating expenses for Q1 2025 were $11.6 million, down from $22.4 million in Q1 2024[10][13] - Stock-based compensation for selling, general, and administrative expenses in Q1 2025 was $784 million, down from $1,622 million in Q1 2024[22] - Research and development stock-based compensation decreased from $450 million in Q1 2024 to $241 million in Q1 2025, indicating a reduction in R&D costs[22] Financial Losses - The net loss for Q1 2025 was $9.7 million, or $0.10 per share, compared to a net loss of $20.3 million, or $0.44 per share, for the same period in 2024[10][13] - For the three months ended March 31, 2025, the GAAP net loss was $9,742 million, compared to $20,331 million for the same period in 2024, indicating a significant reduction in losses[22] - The adjusted net loss for Q1 2025 was $7,795 million, an improvement from $17,776 million in Q1 2024, reflecting a decrease of approximately 56% year-over-year[22] - The net loss per share for Q1 2025 was $(0.10), compared to $(0.44) in Q1 2024, showing a notable improvement in per-share performance[22] Cash Position - As of March 31, 2025, Verrica had $29.6 million in cash and cash equivalents, down from $46.3 million at the end of 2024[10][13][20] Future Plans - The company plans to provide an update on the global development program for VP-315, including the design of the Phase 3 clinical program, in mid-2025[9][10] Interest Expenses - Non-cash interest expense for Q1 2025 was $668 million, compared to $483 million in Q1 2024, reflecting an increase in interest-related costs[22] Financial Clarity - The company believes that excluding non-cash stock-based compensation and interest charges provides a clearer understanding of its financial performance and liquidity[23]

Core Insights - Verrica Pharmaceuticals reported $3.4 million in revenue from YCANTH, driven by a record dispensing of over 10,000 applicator units in Q1 2025, marking a 16.7% increase from Q4 2024 [1][3][8] - The company is advancing its late-stage pipeline, including the completion of an end-of-Phase 2 meeting with the FDA for VP-315, a candidate for basal cell carcinoma, and progressing towards a global Phase 3 program for common warts (VP-102/YCANTH) in collaboration with Torii Pharmaceutical [1][3][9] Financial Performance - For Q1 2025, Verrica recognized product revenue of $3.4 million, with costs of product revenue at $0.4 million, leading to a net loss of $9.7 million or $0.10 per share, compared to a net loss of $20.3 million or $0.44 per share in Q1 2024 [12][20] - Selling, general, and administrative expenses decreased to $8.8 million from $16.3 million year-over-year, primarily due to reduced commercial activity costs [12][20] - Research and development expenses were $2.3 million in Q1 2025, down from $4.9 million in the same period last year, reflecting a decrease in clinical trial expenses for VP-315 [12][20] Business Developments - The company appointed Noah L. Rosenberg, M.D., as Chief Medical Officer, bringing extensive experience in clinical development and product launches [6][7] - Dr. Gavin Corcoran was appointed to the Board of Directors, contributing significant R&D leadership experience [7] Product Insights - YCANTH (VP-102) is the first FDA-approved treatment for molluscum contagiosum, with a strong demand reflected in the dispensing of 10,102 applicator units in Q1 2025 [8][14] - The company plans to provide additional genomic and immune response data for VP-315 in mid-2025, following a positive end-of-Phase 2 meeting with the FDA [9]

Financial Data and Key Metrics Changes - The company reported cash and cash equivalents of $46 million at the end of the previous year [6] - A financing round in November raised $42 million, solidifying the company's balance sheet [7][33] - Cost reductions were implemented, resulting in a decrease of more than half in expenses [10] - The company achieved a quarter-over-quarter growth of 12% in Q4 of the previous year and 16% in Q1 of the current year based on dispensed applicators [11][33] Business Line Data and Key Metrics Changes - The FDA-approved product, Wycanth, targets a market of approximately 6 million patients, predominantly children [5] - The company is expanding its market penetration with additional indications for common warts, potentially reaching an additional 20 million patients [5] - The company has a robust pipeline, including a phase three program for basal cell carcinoma, addressing an additional 3.6 million patients [5] Market Data and Key Metrics Changes - The company has expanded its target population to include pediatricians, in addition to dermatologists, to better address the 6 million target patient population [24] - The covered lives for the product have increased to approximately 225 million as of Q1 [24] Company Strategy and Development Direction - The company is focused on a new commercial strategy for Wycanth, emphasizing HCP-administered products [6] - The management team has been restructured to enhance execution and operational focus [8] - The company aims to drive sales through a tactical sales team that targets pediatricians and primary care practitioners [11][12] Management's Comments on Operating Environment and Future Outlook - Management highlighted the importance of building brand awareness for Wycanth and the operational efficiency achieved through cost reductions [9][10] - The company is optimistic about its growth trajectory, citing a robust pipeline and minimal cash needs to support ongoing programs [33] Other Important Information - The company has a strong intellectual property portfolio with patents extending into the 1940s [6] - The product Wycanth is the only FDA-approved treatment for molluscum, addressing a significantly underserved patient population [19][18] Q&A Session Summary Question: What feedback is being received from pediatricians regarding treatment versus referrals? - Feedback has been mixed, with a notable increase in pediatricians treating patients directly, especially with the introduction of specialty pharmacy distribution [35][36] Question: Is there a benefit if pediatricians are less willing to treat but still pre-educate parents? - Yes, many pediatricians are now sending patients to dermatologists with a diagnosis, which facilitates quicker treatment [37][38] Question: How far along is the company in specialty pharmacy distribution and reimbursement coverage? - More than half of the business is now through specialty pharmacy, with the sales team effectively addressing insurance plan needs [40] Question: What is the commercial overlap for the common warts indication? - The same call points will be targeted, including primary care, pediatricians, and dermatologists, facilitating a seamless integration into existing relationships [41] Question: What is the competitive landscape for common warts treatment? - Current treatments are limited to liquid nitrogen or curettage, presenting a robust opportunity for the company's product [42] Question: What proportion of physicians are still comfortable with compounded products? - There has been a shift towards acceptance of the FDA-approved product as insurance coverage improves, particularly among younger clinicians [44]

Company Overview - Verrica Pharmaceuticals Inc. is a dermatology therapeutics company focused on developing medications for skin diseases that require medical interventions [3] - The company's product YCANTH (VP-102) is the first and only FDA-approved treatment for molluscum contagiosum, a viral skin infection affecting approximately 6 million people in the U.S., primarily children [3] - YCANTH (VP-102) is also being developed to address common warts, which represent a significant unmet need in medical dermatology [3] - Verrica has entered a worldwide license agreement with Lytix Biopharma AS to develop and commercialize VP-315 for non-melanoma skin cancers, including basal cell carcinoma and squamous cell carcinoma [3] Upcoming Events - The company will host a conference call and live webcast on May 13, 2025, at 4:30 p.m. ET to discuss its financial results for Q1 2025 and provide a corporate update [1] - Participants can join the call via telephone or through a live audio webcast available on the company's investor relations website [2]