WEST CHESTER, PA — Verrica Pharmaceuticals Inc. (Nasdaq: VRCA) this week announced financial results for the fourth quarter and year ended December 31, 2022.
“We continue to execute across all aspects of our business, highlighted by the FDA’s recent acceptance of the filing of the resubmission of our NDA for VP-102, which is being developed for the treatment of molluscum contagiosum,” said Ted White, Verrica’s President and Chief Executive Officer. “Our potentially first-in-class oncolytic peptide immunotherapy, VP-315, for the treatment of basal cell carcinoma also continues to advance, and we remain on track to dose patients in Part 2 of our ongoing Phase 2 trial in the second quarter.
“In parallel with our regulatory and clinical accomplishments, we continue to make progress in our pre-commercial activities as we prepare for a potential U.S. launch of what could potentially be the first FDA-approved therapy for molluscum – a condition afflicting millions of children each year in the U.S. Utilizing our innovative “Buy-and-Bill” commercial model, we believe shelf-stable products for in-office administration such as VP-102 can be efficiently distributed to reach this large and underserved patient population with minimal capital outlay for dermatology practices.”
Business Highlights and Recent Developments
- On February 27, 2023, the U.S. Food and Drug Administration (FDA) assigned a Prescription Drug User Fee Act (PDUFA) of July 23, 2023 for Verrica’s New Drug Application (NDA) for VP-102, which is being developed for the treatment of molluscum contagiosum (molluscum). In January, the Company announced that it resubmitted the NDA for VP-102 for the treatment of molluscum to the FDA.
- Verrica is seeking conditional approval to market VP-102 in the United States under the brand name YCANTH™. VP-102 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. If approved, VP-102 would be the first product approved by the FDA to treat molluscum — a common, highly contagious skin disease that affects an estimated six million people in the United States, primarily children.
- Verrica expects to initiate Part 2 of its ongoing Phase 2 study in basal cell carcinoma in the second quarter of 2023. Part 2 is designed to confirm the exploratory dose from Part 1 and identify the recommended dosing regimen for Part 3 of the study. Cohorts will be expanded, and dosing evaluated based upon safety and efficacy results. VP-315 is a potentially first-in-class oncolytic peptide immunotherapy in development as a non-surgical treatment option for non-melanoma skin cancers. The Phase 2 trial is a three-part, open-label, multicenter, dose-escalation, proof-of-concept study with a safety run-in designed to assess the safety, pharmacokinetics, and efficacy of VP-315 when administered intratumorally to adults with biopsy-proven basal cell carcinoma. The study is expected to enroll approximately 66 adult subjects with a histological diagnosis of basal cell carcinoma in at least one eligible target lesion.
Fourth Quarter 2022 Financial Results
- Verrica recognized collaboration revenues of $0.1 million for the three months ended December 31, 2022, which was related to the Collaboration and License Agreement (Torii Agreement) with Torii Pharmaceutical Col, Ltd (Torii). Verrica did not recognize any revenue for the same period in 2021.
- Verrica reported a net loss of $5.9 million for the fourth quarter of 2022, compared to a $9.5 million loss for the same period in 2021.
- Research and development expenses were $3.0 million in the fourth quarter of 2022, compared to $3.4 million for the same period in 2021. The decrease was primarily attributable to a decrease in CMC costs related to Verrica’s development of VP-102 for molluscum contagiosum, external genital warts and common warts in 2022.
- General and administrative expenses were $3.2 million in the fourth quarter of 2022, compared to $5.1 million for the same period in 2021. The decrease was primarily due to decreased headcount, a decrease in insurance, and other operating costs.
Full Year 2022 Financial Results
- Verrica recognized collaboration revenues related to the Torii Agreement of $9.0 million for the year ended December 31, 2022 compared to $12.0 million for 2021. The current period collaboration revenue was related to an $8.0 million milestone payment and $1.0 million related to Torii’s purchase of supplies and reimbursement for development activities while the 2021 collaboration revenue was driven by the Torii upfront license milestone payment of $12.0 million.
- Research and development expenses were $12.2 million for the year ended December 31, 2022, compared to $15.9 million for 2021. The decrease was primarily attributable decreased CMC and clinical costs related to Verrica’s development of VP-102 for molluscum contagiosum, external genital warts, and common warts in 2022, as well as a decrease of 1.3 million related to payments made to Lytix Biopharma AS (Lytix) upon the achievement of regulatory milestones for VP-315, during 2022 compared to 2021.
- General and administrative expenses were $17.4 million for the year ended December 31, 2022, compared to $27.0 million for the same period in 2021. The decrease of $9.6 million was primarily a result of a decrease in expenses related to pre-commercial activities for VP-102 and decreases in headcount, insurance, professional fees, and other operating costs.
- Costs of collaboration revenue were $0.7 million for the year ended December 31, 2022, compared to no costs for the year ended December 31, 2021. The costs of collaboration revenue during 2022 consisted of payments for manufacturing supply to support development and testing services pursuant to the clinical supply agreement with Torii.
- For the year ended December 31, 2022, net loss on a GAAP basis was $24.5 million, or $0.72 per share, compared to a net loss of $35.1 million, or $1.30 per share, for the same period in 2021.
- For the year ended December 31, 2022, non-GAAP net loss was $17.4 million, or $0.51 per share, compared to a non-GAAP net loss of $27.6 million, or $1.02 per share, for the same period in 2021.
- As of December 31, 2022, Verrica had aggregate cash and cash equivalents of $34.3 million. In February 2023, the Company raised gross proceeds of approximately $32.5 million in an underwritten offering of its common stock and pre-funded warrants. Including the net proceeds received from this offering and the Company’s existing cash and cash equivalents as of December 31, 2022, Verrica believes it has sufficient cash and cash equivalents to support planned operations into the first quarter of 2024.
Non-GAAP Financial Measures
In evaluating the operating performance of its business, Verrica states that it 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 charges, loss on debt extinguishment and non-cash interest expense that are required by GAAP. Verrica believes that non-GAAP loss from operations, non-GAAP net loss and non-GAAP net loss per share provides useful information to both management and investors by excluding the effect of certain non-cash expenses and items that Verrica believes may not be indicative of its operating performance, because either they are unusual and Verrica does not expect them to recur in the ordinary course of its business, or they are unrelated to the ongoing operation of the business in the ordinary course. 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 the Company’s original press release.
For more information, visit www.verrica.com.
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