UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
☒ |
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended September 30, 2019
OR
☐ |
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number: 001-38529
Verrica Pharmaceuticals Inc.
(Exact Name of Registrant as Specified in its Charter)
Delaware |
46-3137900 |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer |
10 North High Street, Suite 200 West Chester, PA |
19380 |
(Address of principal executive offices) |
(Zip Code) |
Registrant’s telephone number, including area code: (484) 453-3300
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
|
Trading Symbol(s) |
|
Name of each exchange on which registered |
Common Stock |
|
VRCA |
|
The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
|
☐ |
|
Accelerated filer |
|
☐ |
|
|
|
|
|||
Non-accelerated filer |
|
☒ |
|
Smaller reporting company |
|
☒ |
|
|
|
|
|
|
|
Emerging growth company |
|
☒ |
|
|
|
|
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of November 1, 2019, the registrant had 25,775,164 shares of common stock, $0.0001 par value per share, outstanding.
VERRICA PHARMACEUTICALS INC.
QUARTERLY REPORT ON FORM 10-Q
TABLE OF CONTENTS
|
|
|||
|
|
|
|
|
Item 1. |
|
|
1 |
|
|
|
|
|
|
Item 2. |
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
|
11 |
|
|
|
|
|
Item 3. |
|
|
18 |
|
|
|
|
|
|
Item 4. |
|
|
18 |
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
Item 1. |
|
|
19 |
|
|
|
|
|
|
Item 1A |
|
|
19 |
|
|
|
|
|
|
Item 2. |
|
|
19 |
|
|
|
|
|
|
Item 3. |
|
|
19 |
|
|
|
|
|
|
Item 4. |
|
|
19 |
|
|
|
|
|
|
Item 5. |
|
|
19 |
|
|
|
|
|
|
Item 6. |
|
|
19 |
|
|
|
|
|
|
|
21 |
VERRICA PHARMACEUTICALS INC.
(in thousands, except share and per share amounts)
(Unaudited)
|
|
September 30, |
|
|
December 31, |
|
||
|
|
2019 |
|
|
2018 |
|
||
ASSETS |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
10,600 |
|
|
$ |
10,271 |
|
Marketable securities |
|
|
60,478 |
|
|
|
79,538 |
|
Prepaid expenses and other assets |
|
|
2,962 |
|
|
|
1,343 |
|
Total current assets |
|
|
74,040 |
|
|
|
91,152 |
|
Property, plant and equipment, net |
|
|
1,822 |
|
|
|
255 |
|
Operating lease right-of-use asset |
|
|
178 |
|
|
|
— |
|
Deposits |
|
|
34 |
|
|
|
499 |
|
Total assets |
|
$ |
76,074 |
|
|
$ |
91,906 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
1,010 |
|
|
$ |
922 |
|
Accrued expenses |
|
|
3,193 |
|
|
|
1,517 |
|
Due to related party |
|
|
— |
|
|
|
38 |
|
Operating lease liability |
|
|
127 |
|
|
|
— |
|
Total current liabilities |
|
|
4,330 |
|
|
|
2,477 |
|
Operating lease liability |
|
|
91 |
|
|
|
— |
|
Total liabilities |
|
|
4,421 |
|
|
|
2,477 |
|
Commitments and Contingencies |
|
|
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
|
|
|
|
Preferred stock, $0.0001 par value; 10,000,000 shares authorized; no shares issued and outstanding as of September 30, 2019 and December 31, 2018 |
|
|
— |
|
|
|
— |
|
Common stock, $0.0001 par value; 200,000,000 authorized as of September 30, 2019 and December 31, 2018; 25,849,941 shares issued and 25,744,797 shares outstanding as of September 30, 2019 and 25,809,900 shares issued and 25,704,756 shares outstanding as of December 31, 2018 |
|
|
3 |
|
|
|
3 |
|
Treasury stock, at cost, 105,144 shares as of September 30, 2019 and December 31, 2018 |
|
|
— |
|
|
|
— |
|
Additional paid-in capital |
|
|
125,178 |
|
|
|
122,526 |
|
Accumulated deficit |
|
|
(53,555 |
) |
|
|
(33,083 |
) |
Accumulated other comprehensive gain (loss) |
|
|
27 |
|
|
|
(17 |
) |
Total stockholders’ equity |
|
|
71,653 |
|
|
|
89,429 |
|
Total liabilities and stockholders’ equity |
|
$ |
76,074 |
|
|
$ |
91,906 |
|
The accompanying notes are an integral part of these condensed financial statements.
1
CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(in thousands, except share and per share amounts)
(Unaudited)
|
|
For the Three Months Ended September 30, |
|
|
For the Nine Months Ended September 30, |
|
||||||||||
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
||||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
$ |
3,049 |
|
|
$ |
3,467 |
|
|
$ |
11,464 |
|
|
$ |
7,909 |
|
General and administrative |
|
|
3,494 |
|
|
|
2,865 |
|
|
|
10,626 |
|
|
|
5,781 |
|
Total operating expenses |
|
|
6,543 |
|
|
|
6,332 |
|
|
|
22,090 |
|
|
|
13,690 |
|
Loss from operations |
|
|
(6,543 |
) |
|
|
(6,332 |
) |
|
|
(22,090 |
) |
|
|
(13,690 |
) |
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
453 |
|
|
|
427 |
|
|
|
1,523 |
|
|
|
621 |
|
Other expense |
|
|
— |
|
|
|
(1 |
) |
|
|
(3 |
) |
|
|
(1 |
) |
Total other income (expense) |
|
|
453 |
|
|
|
426 |
|
|
|
1,520 |
|
|
|
620 |
|
Net loss |
|
$ |
(6,090 |
) |
|
$ |
(5,906 |
) |
|
$ |
(20,570 |
) |
|
$ |
(13,070 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share, basic and diluted |
|
$ |
(0.24 |
) |
|
$ |
(0.24 |
) |
|
$ |
(0.83 |
) |
|
$ |
(1.16 |
) |
Weighted average common shares outstanding, basic and diluted |
|
|
24,893,036 |
|
|
|
24,847,512 |
|
|
|
24,875,589 |
|
|
|
11,230,401 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(6,090 |
) |
|
$ |
(5,906 |
) |
|
$ |
(20,570 |
) |
|
$ |
(13,070 |
) |
Other comprehensive gain (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gain (loss) on marketable securities |
|
|
(11 |
) |
|
|
(7 |
) |
|
|
44 |
|
|
|
(7 |
) |
Comprehensive loss |
|
$ |
(6,101 |
) |
|
$ |
(5,913 |
) |
|
$ |
(20,526 |
) |
|
$ |
(13,077 |
) |
The accompanying notes are an integral part of these condensed financial statements.
2
CONDENSED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY
(in thousands, except share amounts)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated |
|
|
|
|
|
|
|
|
Series A Convertible |
|
|
Series B Convertible |
|
|
Series C Convertible |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other |
|
|
Total |
|
|||||||||||||||||
|
|
Preferred Stock |
|
|
Preferred Stock |
|
|
Preferred Stock |
|
|
|
Common Stock |
|
|
Additional |
|
|
Accumulated |
|
|
Treasury Stock |
|
|
Comprehensive |
|
|
Stockholders’ |
|
|||||||||||||||||||||||||||||
|
|
Shares |
|
|
Amount |
|
|
Shares |
|
|
Amount |
|
|
Shares |
|
|
Amount |
|
|
|
Shares Issued |
|
|
Amount |
|
|
Paid-in Capital |
|
|
Deficit |
|
|
Shares |
|
|
Cost |
|
|
Gain (Loss) |
|
|
Equity |
|
||||||||||||||
January 1, 2019 |
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
$ |
— |
|
|
|
|
25,809,900 |
|
|
$ |
3 |
|
|
$ |
122,526 |
|
|
$ |
(33,083 |
) |
|
|
105,144 |
|
|
$ |
— |
|
|
$ |
(17 |
) |
|
$ |
89,429 |
|
Stock-based compensation |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
780 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
780 |
|
Exercise of stock options |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
3,729 |
|
|
|
— |
|
|
|
3 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
3 |
|
Unrealized gain on marketable securities |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
28 |
|
|
|
28 |
|
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(7,479 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(7,479 |
) |
Adoption of ASU 2018-07 (See Note 2) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
(98 |
) |
|
|
98 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
March 31, 2019 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
25,813,629 |
|
|
|
3 |
|
|
|
123,211 |
|
|
|
(40,464 |
) |
|
|
105,144 |
|
|
|
— |
|
|
|
11 |
|
|
|
82,761 |
|
Stock-based compensation |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
846 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
846 |
|
Exercise of stock options |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
31,812 |
|
|
|
— |
|
|
|
212 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
212 |
|
Unrealized gain on marketable securities |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
27 |
|
|
|
27 |
|
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(7,001 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(7,001 |
) |
June 30, 2019 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
25,845,441 |
|
|
|
3 |
|
|
|
124,269 |
|
|
|
(47,465 |
) |
|
|
105,144 |
|
|
|
— |
|
|
|
38 |
|
|
|
76,845 |
|
Stock-based compensation |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
905 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
905 |
|
Exercise of stock options |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
4,500 |
|
|
|
— |
|
|
|
4 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
4 |
|
Unrealized loss on marketable securities |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(11 |
) |
|
|
(11 |
) |
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(6,090 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(6,090 |
) |
September 30, 2019 |
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
$ |
— |
|
|
|
|
25,849,941 |
|
|
$ |
3 |
|
|
$ |
125,178 |
|
|
$ |
(53,555 |
) |
|
|
105,144 |
|
|
$ |
— |
|
|
$ |
27 |
|
|
$ |
71,653 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
January 1, 2018 |
|
|
21,302,972 |
|
|
$ |
10,508 |
|
|
|
1,937,984 |
|
|
$ |
5,000 |
|
|
|
— |
|
|
$ |
— |
|
|
|
|
3,804,643 |
|
|
$ |
— |
|
|
$ |
5,394 |
|
|
$ |
(12,435 |
) |
|
|
105,144 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(7,041 |
) |
Stock-based compensation |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
135 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
135 |
|
Series C convertible preferred stock |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
4,606,267 |
|
|
|
21,000 |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Issuance costs for Series C preferred stock |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(7 |
) |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1,847 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1,847 |
) |
March 31, 2018 |
|
|
21,302,972 |
|
|
|
10,508 |
|
|
|
1,937,984 |
|
|
|
5,000 |
|
|
|
4,606,267 |
|
|
|
20,993 |
|
|
|
|
3,804,643 |
|
|
|
— |
|
|
|
5,529 |
|
|
|
(14,282 |
) |
|
|
105,144 |
|
|
|
— |
|
|
|
— |
|
|
|
(8,753 |
) |
Stock-based compensation |
|
|
- |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
779 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
779 |
|
Conversion of preferred stock into common stock |
|
|
(21,302,972 |
) |
|
|
(10,508 |
) |
|
|
(1,937,984 |
) |
|
|
(5,000 |
) |
|
|
(4,606,267 |
) |
|
|
(20,993 |
) |
|
|
|
16,246,872 |
|
|
|
2 |
|
|
|
36,499 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
36,501 |
|
Issuance of common stock in connection with IPO, net of offering costs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
5,750,000 |
|
|
|
1 |
|
|
|
78,380 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
78,381 |
|
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(5,317 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(5,317 |
) |
June 30, 2018 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
25,801,515 |
|
|
|
3 |
|
|
|
121,187 |
|
|
|
(19,599 |
) |
|
|
105,144 |
|
|
|
— |
|
|
|
— |
|
|
|
101,591 |