Full Press Release Details
Verrica Pharmaceuticals Reports Third Quarter 2024 Financial Results
and Announces Leadership Transition
Company reported $0 in product shipments in the third quarter of 2024 and recognized negative net product revenue of
$1.9 million, including a provision for product returns of $1.7 million
Company expects existing distributor
inventory to support most demand for dispensed applicator units into the first quarter of 2025
to look for ways to manage expenses and expand access to YCANTH for the treatment of molluscum contagiosum
Company announces new senior leadership with appointments of Dr. Jayson Rieger as Chief Executive Officer and John Kirby as
Interim Chief Financial Officer
Company is exploring strategies to strengthen balance sheet
Company has engaged Jefferies as financial advisor
WEST CHESTER, PA November 4, 2024 (GLOBE NEWSWIRE) Verrica Pharmaceuticals Inc. ( Verrica or the Company ) (Nasdaq:
VRCA), a dermatology therapeutics company developing medications for skin diseases requiring medical interventions, today announced financial results for the third quarter ended September 30, 2024, and provided an update on its restructuring
efforts to lower expenses and implementation of its commercial strategy for expanding market access to YCANTH.
Following the close of the third
quarter, we took decisive steps to significantly lower our operating expenses, and these actions are expected to materially reduce Verrica s cash burn rate in the coming year. We are also exploring strategies to strengthen our balance
sheet, said Paul B. Manning, Chairman of the Board of Directors of Verrica. Importantly, we expect that this leaner and more efficient operating structure will better complement our refined commercial strategy for YCANTH which, as
previously announced, will now focus on driving demand for YCANTH across a set of more targeted territories that have a high prevalence of pediatric molluscum and strong reimbursement. As we focus our efforts on a refined commercial strategy, we
continue to receive positive feedback on YCANTH from both patients and healthcare professionals.
As Verrica is now through the first year of sales
of YCANTH since its commercial launch in September 2023, the Company has decided to announce dispensed applicator units in addition
to previous financial disclosures. Dispensed applicator units totaled 7,706 in the third quarter of 2024, compared with 5,975 in the second quarter of 2024. The Company expects existing
distributor inventory levels to support most demand for dispensed applicator units into the first quarter of 2025. The Company will continue to assess appropriate metrics for continued transparency of its business.
To oversee and implement these operational changes, the Company announced the appointments of Dr. Jayson Rieger as President and Chief Executive Officer
and as a director, and John Kirby as interim Chief Financial Officer, effective November 5, 2024.
Dr. Rieger is a Managing Partner with PBM
Capital and has over 20 years of experience in leadership roles spanning business development, operations, drug discovery and product development in the life sciences industry. Mr. Kirby has over 25 years of public company accounting and
finance experience, including working with several small to mid-sized public pharmaceutical companies. Prior to joining Verrica, Mr. Kirby served as Aceragen s Chief Financial Officer, having held
the same role at Idera Pharmaceuticals since 2019 after transitioning to the Aceragen team as part of the 2022 merger between the two companies.
Mr. Manning added, I d also like to thank Ted White for his service to Verrica. During his tenure with the Company, YCANTH became the first
therapy approved by the FDA for the treatment of molluscum contagiosum. We wish him well in his future endeavors.
Business Highlights and Recent
Third Quarter 2024 Financial Results
Year-to-Date September 2024 Financial Results
Non-GAAP Financial Measures
In evaluating the operating performance of its business, Verrica s management considers non-GAAP loss from
operations, non-GAAP net loss and non-GAAP net loss per share. These non-GAAP financial measures exclude stock-based compensation
expense and non-cash interest expense that are required by GAAP. Verrica excludes non-cash stock-based compensation expense from these
non-GAAP measures to facilitate comparison to peer companies who also provide similar non-GAAP disclosures and because it reflects how management internally manages the
business. In addition, Verrica excludes non-cash interest expense from these non-GAAP measures to facilitate an understanding of the effects of the debt service
obligations on the Company s liquidity and comparisons to peer group companies who also provide similar non-GAAP disclosures and because it is reflective of how management internally manages the business.
Non-GAAP loss from operations, non-GAAP net loss and non-GAAP net loss per share should be considered in addition to results
prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results. Non-GAAP loss from operations, non-GAAP net loss and non-GAAP net loss per share have been reconciled to the nearest GAAP measure in the tables following the financial statements in this press release.
In connection with the appointment of
Dr. Rieger as President and Chief Executive Officer, on November 1, 2024, the independent members of the Company s Board of Directors granted Dr. Rieger a stock option award to purchase 2,000,000 shares of Verrica s common stock under the
Verrica Inducement Plan, effective as of November 6, 2024. The stock options are being granted as an inducement material to the Dr. Rieger s becoming an employee of Verrica in accordance with Nasdaq Listing Rule 5635(c)(4).
The Inducement Plan is used exclusively for the grant of equity awards to individuals who were not previously an employee or
non-employee director of Verrica (or following a bona fide period of non-employment), as an inducement material to such individual s entering into employment with
Verrica, pursuant to Rule 5635(c)(4) of the NASDAQ Listing Rules.
The option award will have an exercise price equal to the closing price of
Verrica s common stock on November 6, 2024. The option award will vest, and become exercisable (as applicable), as to 1/8th of the shares on the date that is six months following Dr. Rieger s start date, and 1/48th of the shares each month
thereafter on the same day of the month as the start date, subject to Dr. Rieger s continuous service with Verrica on such vesting dates. The option award is subject to the terms and conditions of the Inducement Plan, and the terms and
conditions of a stock option agreement covering the grant.
YCANTH is a proprietary drug-device
combination product that contains a GMP-controlled formulation of cantharidin delivered via a single-use applicator that allows for precise topical dosing and targeted
administration for the treatment of molluscum. YCANTH is the first and only commercially available product approved by the FDA to treat adult and pediatric patients two years of age and older
with molluscum contagiosum a common, highly contagious skin disease that affects an estimated six million people in the United States, primarily children. Approval of YCANTH was based
upon the positive results from two Phase 3 clinical trials in approximately 500 patients which demonstrated that YCANTH was a safe and effective therapy for the treatment of molluscum.
Approximately 228 million lives are eligible to receive YCANTH covered by insurance. YCANTH is available to all patients with and
without insurance coverage for $25 per treatment, and further financial assistance is available for patients in need. Please visit YCANTHPro.com for additional information.
In addition, Verrica has successfully completed a Phase 2 study of VP-102 for the treatment of common warts and a
Phase 2 study of VP-102 for the treatment of external genital warts.
YCANTH should only be administered by a trained healthcare professional. YCANTH is not for home use.
About Verrica Pharmaceuticals Inc.
dermatology therapeutics company developing medications for skin diseases requiring medical interventions. Verrica s product YCANTH (VP-102)
(cantharidin), is the first and only commercially available treatment approved by the FDA to treat adult and pediatric patients two years of age and older with molluscum contagiosum, a highly contagious viral skin infection affecting approximately 6
million people in the United States, primarily children. YCANTH (VP-102) is also in development to treat common warts and external genital warts, two
of the largest remaining unmet needs in medical dermatology. Verrica is developing VP-103, its second cantharidin-based product candidate, for the treatment of plantar warts. Verrica has also entered a
worldwide license agreement with Lytix Biopharma AS to develop and commercialize VP-315 (formerly LTX-315 and VP-LTX-315) for non-melanoma skin cancers including basal cell carcinoma and squamous cell carcinoma. For more information, visit www.verrica.com.
Forward-Looking Statements
Any statements contained in
this press release that do not describe historical facts may constitute forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements may be identified by words such as
believe, expect, may, plan, potential, will, and similar expressions, and are based on Verrica s current beliefs and expectations. These forward-looking statements include
expectations regarding the continuing commercial launch of YCANTH , the clinical development and potential benefits of Verrica s product candidates, including the timing of reporting
data from clinical trials, expected material reductions in Verrica s cash burn, Verrica s expectation that existing distributor
inventory will support most demand for dispensed applicator units into the first quarter of 2025 and Verrica s ability to fund its operations into the first quarter of 2025. These statements
involve risks and uncertainties that could cause actual results to differ materially from those reflected in such statements. Risks and uncertainties that may cause actual results to differ materially include uncertainties inherent in the drug
development process and the regulatory approval process, Verrica s reliance on third parties over which it may not always have full control and uncertainties that are described in Verrica s Annual Report on
Form 10-K for the year ended December 31, 2023, Quarterly Report on Form 10-Q for the quarter ended September 30, 2024 and other filings
Verrica makes with the U.S. Securities and Exchange Commission. Any forward-looking statements speak only as of the date of this press release and are based on information available to Verrica as of the date of this release, and Verrica assumes no
obligation to, and does not intend to, update any forward-looking statements, whether as a result of new information, future events or otherwise.
VERRICA PHARMACEUTICALS INC.
Statements of Operations
(in thousands except share and per share data)
| Three Months Ended September 30, | ||||||||
| 2024 | 2023 | |||||||
| Product revenue, net | $ | (1,865 | ) | $ | 2792 | |||
| Collaboration revenue | 84 | 125 | ||||||
| Total revenue | (1,781 | ) | 2,917 | |||||
| Operating expenses: | ||||||||
| Selling, general and administrative | 16,083 | 20,054 | ||||||
| Research and development | 2,405 | 6,510 | ||||||
| Cost of product revenue | 351 | 145 | ||||||
| Cost of collaboration revenue | 84 | 125 | ||||||
| Total operating expenses | 18,923 | 26,834 | ||||||
| Loss from operations | (20,704 | ) | (23,917 | ) | ||||
| Interest income | 221 | 822 | ||||||
| Interest expense | (2,376 | ) | (1,657 | ) | ||||
| Other expense | (1 | ) | (50 | ) | ||||
| Net loss | $ | (22,860 | ) | $ | (24,802 | ) | ||
| Net loss per share, basic and diluted | $ | (0.49 | ) | $ | (0.54 | ) | ||
| Weighted-average common shares outstanding, basic and diluted | 46,805,427 | 46,073,932 |
VERRICA PHARMACEUTICALS INC.
Statements of Operations
(in thousands except share and per share data)
| Nine Months Ended September 30, | ||||||||
| 2024 | 2023 | |||||||
| Product revenue, net | $ | 6,259 | $ | 2792 | ||||
| Collaboration revenue | 963 | 344 | ||||||
| Total revenue | 7,222 | 3,136 | ||||||
| Operating expenses: | ||||||||
| Selling, general and administrative | 48,943 | 30,310 | ||||||
| Research and development | 10,673 | 14,975 | ||||||
| Cost of product revenue | 1,257 | 145 | ||||||
| Cost of collaboration revenue | 858 | 329 | ||||||
| Total operating expenses | 61,731 | 45,759 | ||||||
| Loss from operations | (54,509 | ) | (42,623 | ) | ||||
| Interest income | 1,212 | 1,948 | ||||||
| Interest expense | (7,063 | ) | (1,657 | ) | ||||
| Other expense | (17 | ) | (49 | ) | ||||
| Net loss | $ | (60,377 | ) | $ | (42,381 | ) | ||
| Net loss per share, basic and diluted | $ | (1.30 | ) | $ | (0.94 | ) | ||
| Weighted-average common shares outstanding, basic and diluted | 46,597,883 | 45,015,900 |
VERRICA PHARMACEUTICALS INC.
Selected Balance Sheet Data
| September 30, 2024 | December 31, 2023 | |||||||
| Cash and cash equivalents | $ | 22,959 | $ | 69,547 | ||||
| Accts rec., prepaid expenses and inventory | 5,228 | 7,983 | ||||||
| Total current assets | 28,187 | 77,530 | ||||||
| PP&E, lease right of use asset, other | 4,740 | 4,067 | ||||||
| Total assets | $ | 32,927 | $ | 81,597 | ||||
| Total liabilities | $ | 66,978 | $ | 61,834 | ||||
| Total stockholders equity | (34,051 | ) | 19,763 | |||||
| Total liabilities and stockholders equity | $ | 32,927 | $ | 81,597 |
VERRICA PHARMACEUTICAS INC.
Reconciliation of Non-GAAP Financial Measures (unaudited)
(in thousands except per share data)
| Three Months Ended September 30, 2024 | ||||||||||||
| Loss from operations | Net loss | Net loss per share | ||||||||||
| GAAP | $ | (20,704 | ) | $ | (22,860 | ) | $ | (0.49 | ) | |||
| Non-GAAP Adjustments: | ||||||||||||
| Stock-based compensation Selling, general and admin (a) | 1,503 | 1,503 | ||||||||||
| Stock-based compensation Research and development (a) | 605 | 605 | ||||||||||
| Non-cash interest expense (b) | 571 | |||||||||||
| Adjusted | $ | (18,596 | ) | $ | (20,181 | ) | $ | (0.43 | ) |
| Three Months Ended September 30, 2023 | ||||||||||||
| Loss from operations | Net loss | Net loss per share | ||||||||||
| GAAP | $ | (23,917 | ) | $ | (24,802 | ) | $ | (0.54 | ) | |||
| Non-GAAP Adjustments: | ||||||||||||
| Stock-based compensation Selling, general & admin (a) | 8,438 | 8,438 | ||||||||||
| Stock-based compensation Research & development (a) | 1,225 | 1,225 | ||||||||||
| Non-cash interest expense (b) | 338 | |||||||||||
| Adjusted | $ | (14,254 | ) | $ | (14,801 | ) | $ | (0.32 | ) |
| Nine Months Ended September 30, 2024 | ||||||||||||
| Loss from operations | Net loss | Net loss per share | ||||||||||
| GAAP | $ | (54,509 | ) | $ | (60,377 | ) | $ | (1.30 | ) | |||
| Non-GAAP Adjustments: | ||||||||||||
| Stock-based compensation Selling, general and admin (a) | 4,841 | 4,841 | ||||||||||
| Stock-based compensation Research and development (a) | 1,567 | 1,567 | ||||||||||
| Non-cash interest expense (b) | 1,571 | |||||||||||
| Adjusted | $ | (48,101 | ) | $ | (52,398 | ) | $ | (1.12 | ) |
| Nine Months Ended September 30, 2023 | ||||||||||||
| Loss from operations | Net loss | Net loss per share | ||||||||||
| GAAP | $ | (42,623 | ) | $ | (42,381 | ) | $ | (0.94 | ) | |||
| Non-GAAP Adjustments: | ||||||||||||
| Stock-based compensation Selling, general & admin (a) | 10,223 | 10,223 | ||||||||||
| Stock-based compensation Research & development (a) | 2,078 | 2,078 | ||||||||||
| Non-cash interest expense (b) | 338 | |||||||||||
| Adjusted | $ | (30,322 | ) | $ | (29,742 | ) | $ | (0.66 | ) |
FOR MORE INFORMATION, PLEASE CONTACT: