Reiterates expectation to resubmit NDA for VP-102 for Molluscum Contagiosum in Q1 2023
Part 1 of Phase 2 for VP-LTX-315 for Basal Cell Carcinoma on track to conclude Q1 2023
WEST CHESTER, PA – November 7, 2022 (GLOBE NEWSWIRE) – Verrica Pharmaceuticals Inc. (Verrica) (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, 2022.
“This quarter, we achieved significant progress in the transfer of our bulk material production to Piramal Pharma Solutions, and we are on track to resubmit our NDA for VP-102 for the treatment of molluscum contagiosum in the first quarter of 2023,” said Ted White, Verrica’s President and Chief Executive Officer. “We greatly appreciate the collaborative effort from the entire Piramal team, as well as their commitment to completing this technology transfer on an expedited basis. We continue to look forward to providing physicians and caregivers the potential first FDA-approved treatment option for molluscum, a disease impacting an estimated six million patients annually in the United States.”
Business Highlights and Recent Developments
VP-102
VP-LTX-315
Financial Results
Third Quarter 2022 Financial Results
Year-to-Date September 2022 Financial Results
Non-GAAP Financial Measures
In evaluating the operating performance of its business, Verrica’s management considers non-GAAP income (loss) from operations, non-GAAP net income (loss) and non-GAAP net income (loss) per share. These non-GAAP financial measures exclude stock-based compensation charges, non-cash interest expense and loss on debt extinguishment that are required by GAAP. Verrica believes that non-GAAP income (loss) from operations, non-GAAP net income (loss) and non-GAAP net income (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 income (loss) from operations, non-GAAP net income (loss) and non-GAAP net income (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 income (loss) from operations, non-GAAP net income (loss) and non-GAAP net income (loss) per share have been reconciled to the nearest GAAP measure in the tables following the financial statements in this press release.
About VP-102
Verrica’s lead product candidate, VP-102, is a proprietary drug-device combination product that contains a GMP-controlled formulation of cantharidin (0.7% w/v) delivered via a single-use applicator that allows for precise topical dosing and targeted administration. VP-102 could potentially be the first product approved by the FDA to treat molluscum contagiosum — a common, highly contagious skin disease that affects an estimated six million people in the United States, primarily children. Upon submission of the NDA for VP-102, Verrica intends to seek approval to market VP-102 in the United States under the brand name YCANTH™. 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.
About Molluscum Contagiosum (Molluscum)
There are currently no FDA-approved treatments for molluscum, a highly contagious viral skin disease that affects approximately six million people — primarily children — in the United States. Molluscum is caused by a pox virus that produces distinctive raised, skin-toned-to-pink-colored lesions that can cause pain, inflammation, itching and bacterial infection. It is easily transmitted through direct skin-to-skin contact or through fomites (objects that carry the disease like toys, towels or wet surfaces) and can spread to other parts of the body or to other people, including siblings. The lesions can be found on most areas of the body and may carry substantial social stigma. Without treatment, molluscum can last for an average of 13 months, and in some cases, up to several years.
About Verrica Pharmaceuticals Inc.
Verrica is a dermatology therapeutics company developing medications for skin diseases requiring medical interventions. Verrica’s late-stage product candidate, VP-102, is in development to treat molluscum, common warts and external genital warts, three of the largest unmet needs in medical dermatology. Verrica is also developing VP-103, its second cantharidin-based product candidate, for the treatment of plantar warts. The Company has also entered a worldwide license agreement with Lytix Biopharma AS to develop and commercialize LTX-315 for dermatologic oncology conditions. 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 Company’s expectations with regard to the satisfaction of the CRL for VP-102, the technology transfer to Piramal, the timing of the resubmission of the NDA for VP-102, the clinical development of VP-102 for additional indications, the timing of clinical trial completion for VP-LTX-315 and Verrica’s cash, cash equivalents, marketable securities and restricted cash being sufficient to support planned operations into the third quarter of 2023. 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, uncertainties related to the COVID-19 pandemic and other risks and uncertainties that are described in Verrica’s Annual Report on Form 10-K for the year ended December 31, 2021 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
(unaudited, in thousands except share and per share data)
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||
License revenues | $ 8,319 | $ – | $ 8,964 | $ 12,000 | |||||||
Operating expenses: | |||||||||||
Research and development | 2,946 | 3,763 | 9,833 | 12,572 | |||||||
General and administrative | 3,925 | 8,005 | 14,216 | 21,866 | |||||||
Total operating expenses | 6,871 | 11,768 | 24,049 | 34,438 | |||||||
Income (loss) from operations | 1,448 | (11,768) | (15,085) | (22,438) | |||||||
Interest income | 148 | 31 | 190 | 96 | |||||||
Interest expense | (81) | (1,092) | (2,172) | (3,198) | |||||||
Loss on extinguishment of debt | (1,437) | – | (1,437) | – | |||||||
Other income (expense) | 5 | – | (51) | – | |||||||
Net income (loss) | $ 83 | $ (12,829) | $ (18,555) | $ (25,540) | |||||||
Net income(loss) per share, basic and diluted | |||||||||||
Basic | $ 0.00 | $ (0.47) | $ (0.58) | $ (0.95) | |||||||
Diluted | $ 0.00 | $ (0.47) | $ (0.58) | $ (0.95) | |||||||
Weighted average common shares outstanding | |||||||||||
Basic | 40,304,923 | 27,516,477 | 31,827,844 | 26,884,527 | |||||||
Diluted | 44,656,172 | 27,516,477 | 31,827,844 | 26,884,527 | |||||||
VERRICA PHARMACEUTICALS INC.
Selected Balance Sheet Data
(unaudited, in thousands)
September 30, 2022 | December 31, 2021 | |||
Cash, cash equivalents and marketable securities | $ 39,454 | $ 70,354 | ||
Prepaid expenses and other assets | 3,941 | 3,974 | ||
Total current assets | 43,395 | 74,328 | ||
PP&E, lease right of use asset, other | 5,752 | 5,797 | ||
Total assets | $ 49,147 | $ 80,125 | ||
Total liabilities | 4,382 | 47,520 | ||
Total stockholders’ equity | 44,765 | 32,605 | ||
Total liabilities and stockholders’ equity | $ 49,147 | $ 80,125 |
VERRICA PHARMACEUTICALS INC.
Reconciliation of Non-GAAP Financial Measures (unaudited)
(in thousands except share and per share data)
Three Months Ended September 30, 2022 | |||||
Income from Operations | Net income | Net income per share (basic and diluted) | |||
GAAP | $ 1,448 | $ 83 | $ 0.00 | ||
Non-GAAP Adjustments: | |||||
Stock-based compensation – Selling, General & Admin (a) | 1,064 | 1,064 | |||
Stock-based compensation – Research & Development (a) | 349 | 349 | |||
Loss on debt extinguishment | _ | 1,437 | |||
Adjusted | $ 2,861 | $ 2,933 | $ 0.07 | ||
Three Months Ended September 30, 2021 | |||||
Loss from Operations | Net loss | Net loss per share | |||
GAAP | $ (11,768) | $ (12,829) | $ (0.47) | ||
Non-GAAP Adjustments: | |||||
Stock-based compensation – Selling, General & Admin (a) | 1,054 | 1,054 | |||
Stock-based compensation – Research & Development (a) | 427 | 427 | |||
Non-cash interest expense (b) | _ | 351 | |||
Adjusted | $ (10,287) | $ (10,997) | $ (0.40) |
VERRICA PHARMACEUTICALS INC.
Reconciliation of Non-GAAP Financial Measures (unaudited)
(in thousands except share and per share data)
Nine Months Ended September 30, 2022 | |||||
Loss from Operations | Net loss | Net loss per share | |||
GAAP | $ (15,085) | $ (18,555) | $ (0.58) | ||
Non-GAAP Adjustments: | |||||
Stock-based compensation – Selling, General & Admin (a) | 2,709 | 2,709 | |||
Stock-based compensation – Research & Development (a) | 1,105 | 1,105 | |||
Loss on debt extinguishment | _ | 1,437 | |||
Non-cash interest expense (b) | _ | 633 | |||
Adjusted | $ (11,271) | $ (12,671) | $ (0.40) | ||
Nine Months Ended September 30, 2021 | |||||
Loss from Operations | Net loss | Net loss per share | |||
GAAP | $ (22,438) | $ (25,540) | $ (0.95) | ||
Non-GAAP Adjustments: | |||||
Stock-based compensation – Selling, General & Admin (a) | 3,582 | 3,582 | |||
Stock-based compensation – Research & Development (a) | 1,150 | 1,150 | |||
Non-cash interest expense (b) | _ | 1,058 | |||
Adjusted | $ (17,706) | $ (19,750) | $ (0.73) |
(a) The effects of non-cash stock-based compensation are excluded because of varying available valuation methodologies and subjective assumptions. We believe this is a useful measure for investors because such exclusion facilitates comparison to peer companies who also provide similar non-GAAP disclosures and is reflective of how management internally manages the business.
(b) The effects of non-cash interest charges are excluded. We believe such exclusion facilitates an understanding of the effects of the debt service obligations on the Company’s liquidity and comparisons to peer group companies and is reflective of how management internally manages the business.
Investors:
Kevin Gardner
LifeSci Advisors
kgardner@lifesciadvisors.com
Chris Calabrese
LifeSci Advisors
ccalabrese@lifesciadvisors.com