Verrica Pharmaceuticals Inc. (“Verrica”) (Nasdaq: VRCA), a
dermatology therapeutics company developing medications for skin
diseases requiring medical interventions, today announced financial
results for the first quarter ended March 31, 2021.
“This is a significant time for the Company as we ramp up our
commercial readiness plans in preparation for potential FDA
approval this year of VP-102 for the treatment of molluscum, a
common, highly contagious skin disease with no FDA-approved
treatments,” said Ted White, Verrica’s President and Chief
Executive Officer. “In parallel, we strengthened our financial
position, raising funds and generating licensing revenues that we
believe will support planned operations at least through the second
quarter of 2023.”
Ted White continued: “Further, we expanded our global reach by
granting Torii an exclusive license to develop and commercialize
VP-102 in Japan for the treatment of molluscum and common warts,
executing the first strategic step in potentially bringing VP-102
to global markets.”
Business Highlights and Recent Developments
- The Company continued to expand its U.S. commercial operations
during the quarter in preparation for the potential FDA approval of
VP-102 (cantharidin 0.7% Topical Solution), and has made key hires
in marketing, sales and payor functions to support product launch
and commercialization. The Company has been assigned a Prescription
Drug User Fee Act (PDUFA) goal date of June 23, 2021 for its NDA
for VP-102. If approved, VP-102 will be marketed in the United
States under the conditionally accepted brand name YCANTH™.
- On March 25, the Company closed an underwritten public offering
of 2,033,899 shares of its common stock at a price to the public of
$14.75 per share. The gross proceeds from the offering to Verrica
were approximately $30.0 million, before offering expenses.
- The Company entered into a Collaboration and License Agreement
(the “Torii Agreement”) with Torii Pharmaceutical Co., Ltd.
(“Torii”) granting Torii an exclusive license to develop and
commercialize VP-102 in Japan for the treatment of molluscum and
common warts. Under the terms of the Agreement, Torii made an
up-front payment of $11.5 million to Verrica and has also agreed to
make up to an additional $58 million in aggregate payments
contingent on achievement of specified development, regulatory, and
sales milestones. Torii will also make tiered transfer price
payments for supply of product in the range of the mid-30s to
mid-40s as a percent of net sales. Torii is responsible for all
development activities and costs in support of obtaining regulatory
approval in Japan.
- Positive pooled results from the pivotal CAMP trials evaluating
the safety and efficacy of VP-102 in the treatment of molluscum
were published in the March 2021 issue of the American Journal of
Clinical Dermatology.
Financial Results
First Quarter 2021 Financial Results
- Verrica recognized license revenues of $12.0 million in the
first quarter of 2021 related to the Torii Agreement. There were no
license revenues recognized in 2020.
- Research and development expenses were $5.4 million in the
first quarter of 2021, compared to $4.9 million for the same period
in 2020. The increase was primarily attributable to a one-time $2.3
million milestone payment to Lytix Biopharma AS upon the
achievement of a regulatory milestone for LTX-315, partially offset
by decreased Chemistry, Manufacturing and Controls (CMC) and
clinical costs related to Verrica’s development of VP-102 for
molluscum contagiosum, external genital warts, and common warts in
2020.
- General and administrative expenses were $6.6 million in
the first quarter of 2021, compared to $5.0 million for the same
period in 2020. The increase was primarily a result of expenses
related to increased headcount, an increase in insurance,
professional fees and other operating costs, and an increase in
expenses related to pre-commercial activities
for VP-102.
- For the first quarter of 2021, net loss on a GAAP basis was
$0.9 million, or $0.04 per share, compared to a net loss of
$9.8 million, or $0.39 per share, for the same period in 2020.
- For the first quarter of 2021, non-GAAP net income was
$0.6 million, or $0.02 per share, compared to a non-GAAP net
loss of $8.8 million, or $0.35 per share, for the same period in
2020.
- As of March 31, 2021, Verrica had aggregate cash, cash
equivalents, and marketable securities of $87.7 million. The
Company believes that its existing cash, cash equivalents, and
marketable securities as of March 31, 2021, combined with the $11.5
million up-front payment received pursuant to the Torii Agreement
in April 2021, will be sufficient to support planned operations at
least through the second quarter of 2023.
Non-GAAP Financial Measures
In evaluating the operating performance of its business,
Verrica’s management considers non-GAAP income 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 and non-cash interest expense that are
required by GAAP. Verrica believes that non-GAAP income 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 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 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
Verricaʼs 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 is currently under U.S. Food and Drug
Administration (FDA) review, with a PDUFA goal date of June 23,
2021, and 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. If approved, VP-102 will be
marketed in the United States under the conditionally accepted
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 potential
approval of the NDA for VP-102 and the potential benefits and
potential commercialization of VP-102 for the treatment of
molluscum, if approved, the clinical development of Verrica’s
VP-102 for additional indications and Verrica’s other product
candidates, , and Verrica’s cash, cash equivalents and marketable
securities being sufficient to support planned operations at least
through the second 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, 2020 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.Condensed Statements of
Operations(unaudited, in thousands except share
and per share data)
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
2021 |
|
|
|
2020 |
|
|
|
|
|
|
|
|
License revenues |
$ |
12,000 |
|
|
$ |
- |
|
Operating expenses: |
|
|
|
|
|
|
|
Research and development |
|
5,362 |
|
|
|
4,892 |
|
General and administrative |
|
6,578 |
|
|
|
4,988 |
|
Total operating expenses |
|
11,940 |
|
|
|
9,880 |
|
Income (loss) from
operations |
|
60 |
|
|
|
(9,880 |
) |
Interest income |
|
32 |
|
|
|
278 |
|
Interest expense |
|
(1,028 |
) |
|
|
(220 |
) |
Net loss |
$ |
(936 |
) |
|
$ |
(9,822 |
) |
Net loss per share, basic and diluted |
$ |
(0.04 |
) |
|
$ |
(0.39 |
) |
Weighted average common shares outstanding, basic and diluted |
|
25,602,404 |
|
|
|
24,964,167 |
|
|
|
|
|
|
|
|
|
VERRICA PHARMACEUTICALS
INC.Selected Balance Sheet
Data(unaudited, in thousands)
|
|
|
|
|
|
|
|
March 31, 2021 |
|
|
December 31, 2020 |
Cash, cash equivalents and
marketable securities |
$ |
87,686 |
|
|
$ |
65,470 |
Total assets |
|
108,102 |
|
|
|
74,154 |
Debt, net |
|
40,669 |
|
|
|
35,315 |
Total liabilities |
|
46,292 |
|
|
|
41,168 |
Total stockholders’
equity |
|
61,810 |
|
|
|
32,986 |
|
|
|
|
|
|
|
VERRICA PHARMACEUTICALS
INC.Reconciliation of Non-GAAP Financial Measures
(unaudited)(in thousands except share and per
share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2021 |
|
|
|
Income from Operations |
|
|
Net income (loss) |
|
|
Net income (loss) per share |
|
|
|
|
|
|
|
|
|
|
|
GAAP |
$ |
60 |
|
|
$ |
(936 |
) |
|
$ |
(0.04 |
) |
Non-GAAP
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation –
General & Admin (a) |
|
1,105 |
|
|
|
1,105 |
|
|
|
|
|
Stock-based compensation –
Research & Development (a) |
|
298 |
|
|
|
298 |
|
|
|
|
|
Non-cash interest expense
(b) |
|
- |
|
|
|
144 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted |
$ |
1,436 |
|
|
$ |
611 |
|
|
$ |
0.02 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2020 |
|
|
|
Income (Loss)from Operations |
|
|
Net loss |
|
|
Net loss per share |
|
|
|
|
|
|
|
|
|
|
|
GAAP |
$ |
(9,880 |
) |
|
$ |
(9,822 |
) |
|
$ |
(0.39 |
) |
Non-GAAP
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation –
General & Admin (a) |
|
821 |
|
|
|
821 |
|
|
|
|
|
Stock-based compensation –
Research & Development (a) |
|
177 |
|
|
|
177 |
|
|
|
|
|
Non-cash interest expense
(b) |
|
- |
|
|
|
65 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted |
$ |
(8,882 |
) |
|
$ |
(8,759 |
) |
|
$ |
(0.35 |
) |
|
|
|
|
|
|
|
|
|
|
|
(a) The effects of non-cash stock-based compensation are
excluded because of varying available valuation methodologies and
subjective assumptions. Verrica believes 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.
Verrica believes 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.
FOR MORE INFORMATION, PLEASE CONTACT:
Investors:
A. Brian DavisChief Financial
Officer484.453.3300 ext. 103info@verrica.com
William WindhamSolebury
Trout646.378.2946wwindham@soleburytrout.com
Media:
Zara LockshinSolebury
Trout646.378.2960zlockshin@soleburytrout.com
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