Verrica Pharmaceuticals(VRCA) - 2025 Q2 - Quarterly Results

Executive Summary Verrica achieved strong Q2 2025 financial results with significant revenue growth from YCANTH® and a Torii milestone, advancing its pipeline and seeking non-dilutive funding Q2 2025 Highlights Verrica reported strong Q2 2025 financial results, with $12.7 million total revenue driven by YCANTH® growth and a Torii milestone payment Q2 2025 Financial Highlights (Millions) | Metric | Q2 2025 (Millions) | | :----------------------- | :------------------- | | Total Revenue | $12.7 | | YCANTH® Revenue, net | $4.5 | | Torii Milestone Revenue | $8.0 | - YCANTH® revenue, net, showed sequential growth of 32.5% over Q1 2025[2] - Completed a successful End of Phase 2 Meeting for VP-315 for Basal Cell Carcinoma, preparing for Phase 3[2] CEO's Business Outlook The CEO noted YCANTH's strong sequential growth, advanced global Phase 3 programs for common warts and VP-315, and is exploring non-dilutive financing - YCANTH's dispensed applicator units grew 32.8% sequentially in Q2 2025, reaching 13,434 units[4] - Anticipates an additional $10 million in non-dilutive funding from Torii upon Japanese regulatory approval of YCANTH for molluscum contagiosum, expected by year-end[4] - VP-315 is advancing into a pivotal Phase 3 program for basal cell carcinoma, with plans to explore strategic, non-dilutive partnerships for funding[5] Business Highlights and Recent Developments Verrica advanced its pipeline with global Phase 3 for common warts and VP-315, saw strong YCANTH® commercial growth, and completed a 1-for-10 reverse stock split Corporate Updates Verrica amended its Torii agreement, accelerating an $8 million milestone for YCANTH's global Phase 3 and converting a $10 million Japanese approval milestone to cash - Initiated global Phase 3 program of VP-102/TO-208 (YCANTH) for common warts on July 1, 2025[9] - Received an accelerated $8 million milestone payment from Torii in July 2025 for the Phase 3 program initiation[9] - Torii agreed to pay a $10 million cash milestone for Japanese approval of YCANTH for molluscum, expected by end of 2025[9] YCANTH® (VP-102) Developments YCANTH® showed strong commercial adoption with a record 13,434 dispensed applicator units in Q2 2025, a significant sequential increase YCANTH® Dispensed Applicator Units | Metric | Q2 2025 (Units) | | :-------------------------- | :------ | | Dispensed Applicator Units | 13,434 | | Sequential Growth (over Q1) | 32.8% | VP-315 Program Updates The company had a positive End-of-Phase 2 meeting for VP-315, with the first patient in global Phase 3 expected in Q4 2025 - Positive outcome from End-of-Phase 2 meeting with the FDA for VP-315[11] - First patient in global Phase 3 program for VP-315 expected to be dosed in Q4 2025 in the United States[12] - Torii will split global Phase 3 program costs 50/50 with Verrica, paying the first $40 million (approx. 90% of current budget)[12] Reverse Stock Split Verrica effected a 1-for-10 reverse stock split on July 24, 2025, proportionally reducing common shares without altering stockholder ownership - A 1-for-10 reverse stock split was effected on July 24, 2025[12] - Reduced issued common shares from 92,650,404 to 9,265,034[12] - Reduced outstanding common shares from 92,545,260 to 9,254,520[12] Financial Results Verrica reported significantly increased Q2 2025 total revenue and net income, driven by milestone payments and reduced operating expenses, alongside improved year-to-date performance Second Quarter 2025 Financial Performance In Q2 2025, Verrica reported significantly increased total revenue from a Torii milestone, achieving net income versus a prior-year loss, driven by reduced operating expenses Q2 2025 vs Q2 2024 Financial Highlights (in thousands) | Metric | Q2 2025 (Thousands) | Q2 2024 (Thousands) | Change (YoY) | | :--------------------------------- | :------ | :------ | :----------- | | Product revenue, net | $4,534 | $4,892 | -7.3% | | License and collaboration revenue | $8,168 | $285 | +2766% | | Total revenue | $12,702 | $5,177 | +145.3% | | Selling, general and admin. expenses | $8,852 | $16,522 | -46.5% | | Research and development expenses | $1,846 | $3,319 | -44.4% | | Net income (loss) | $204 | $(17,186)| N/A | | Net income (loss) per share, basic | $0.02 | $(3.70) | N/A | - Product revenue, net, decreased by $0.4 million, as Q2 2024 included a one-time stock-in related to distribution network expansion[13] - Selling, general and administrative expenses decreased by $7.7 million, primarily due to lower commercial activities for YCANTH, including reduced sales force compensation and marketing costs[13] Year-to-Date Financial Performance For YTD June 30, 2025, Verrica significantly reduced its net loss year-over-year, driven by increased license revenue and considerable reductions in operating expenses YTD 2025 vs YTD 2024 Financial Highlights (in thousands) | Metric | YTD 2025 (Thousands) | YTD 2024 (Thousands) | Change (YoY) | | :--------------------------------- | :------- | :------- | :----------- | | Product revenue, net | $7,956 | $8,124 | -2.1% | | License and collaboration revenue | $8,185 | $879 | +831.2% | | Total revenue | $16,141 | $9,003 | +79.3% | | Selling, general and admin. expenses | $17,700 | $32,861 | -46.2% | | Research and development expenses | $4,130 | $8,267 | -50.0% | | Net loss | $(9,538) | $(37,517)| -74.6% | | Net loss per share | $(1.01) | $(8.07) | -87.5% | - Selling, general and administrative expenses decreased by $15.2 million, primarily due to lower compensation, stock compensation, benefits, and travel costs from a reduced sales force[14] - Research and development expenses decreased by $4.1 million, mainly due to decreased clinical trial costs for VP-315[14] Selected Balance Sheet Data As of June 30, 2025, Verrica's cash and cash equivalents decreased significantly year-over-year, leading to reduced total assets and an increased stockholders' deficit Selected Balance Sheet Data (in thousands) | Metric | June 30, 2025 (Thousands) | June 30, 2024 (Thousands) | | :-------------------------- | :------------ | :------------ | | Cash and cash equivalents | $15,396 | $46,329 | | Total current assets | $36,781 | $51,179 | | Total assets | $39,107 | $54,134 | | Total liabilities | $56,591 | $63,994 | | Total stockholders' equity | $(17,484) | $(9,860) | - Cash and cash equivalents decreased by $30.9 million year-over-year[13][25] Non-GAAP Financial Measures Verrica utilizes non-GAAP financial measures, excluding stock-based compensation and non-cash interest, to provide a clearer view of operational performance and facilitate peer comparisons - Non-GAAP measures exclude stock-based compensation expense and non-cash interest expense[15] - For Q2 2025, non-GAAP net income was $2.4 million ($0.25 per share), compared to a non-GAAP net loss of $14.4 million ($3.11 per share) in Q2 2024[13][27] - For YTD 2025, non-GAAP net loss was $5.4 million ($0.57 per share), compared to a non-GAAP net loss of $32.2 million ($6.93 per share) in YTD 2024[14][31] Company and Product Information This section details YCANTH® as the first FDA-approved molluscum contagiosum treatment, outlines Verrica's dermatology focus, and defines dispensed applicator units About YCANTH® (VP-102) YCANTH® (VP-102) is Verrica's proprietary FDA-approved drug-device for molluscum contagiosum in patients two years and older, also in development for common warts - YCANTH® is the first and only FDA-approved product for molluscum contagiosum in patients two years and older[16] - Molluscum contagiosum affects an estimated six million people in the U.S., primarily children[16] - Approximately 225 million lives are eligible for YCANTH® coverage by insurance[16] About Verrica Pharmaceuticals Inc. Verrica Pharmaceuticals is a dermatology therapeutics company developing medications for skin diseases, with YCANTH® for molluscum contagiosum and pipeline assets for common warts and non-melanoma skin cancers - Verrica is a dermatology therapeutics company developing medications for skin diseases requiring medical interventions[17] - Key products/pipeline: YCANTH® (VP-102) for molluscum contagiosum and common warts, and VP-315 for non-melanoma skin cancers (basal cell carcinoma and squamous cell carcinoma)[17] About Dispensed Applicator Units Dispensed applicator units refer to YCANTH® applicators shipped to healthcare professionals from pharmacy partners, sold by distributors to pharmacies, or directly to physician offices and clinics - Dispensed applicator units include applicators shipped to healthcare professionals from contracted pharmacy partners for fulfillment[18] - Also includes units sold by distribution partners to independent and regional pharmacies[18] - Encompasses units sold to physician offices, hospitals, and other clinics on a buy and bill basis[18] Additional Information This section provides Q2 2025 conference call details, outlines forward-looking statements and risks, and lists investor contact information Conference Call and Webcast Information Verrica Pharmaceuticals hosted a conference call and webcast on August 12, 2025, at 4:30 pm ET to discuss Q2 2025 financial results and provide a business update - Conference call held on August 12, 2025, at 4:30 pm ET[6] - Webcast accessible via https://viavid.webcasts.com/starthere.jsp?ei=1725073&tp_key=4eb16e1992 and www.verrica.com[7](index=7&type=chunk) - Replay available for one month on the Company's website in the Investors section[8] Forward-Looking Statements This press release contains forward-looking statements about future funding, commercialization, and clinical development, based on current beliefs and involving inherent risks and uncertainties - Statements about receipt of additional non-dilutive capital from Torii and timing of regulatory decisions are forward-looking[19] - Statements regarding the commercialization of YCANTH and clinical development of product candidates (YCANTH, VP-315) are forward-looking[19] - These statements involve risks and uncertainties, as described in Verrica's Annual Report on Form 10-K and other SEC filings[19] Investor Contact Contact information for investor relations is provided for inquiries - Investors can contact John Kirby, Chief Financial Officer, or Kevin Gardner of LifeSci Advisors[33]