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, 2021.
“We are pleased that the issues identified at the CMO unrelated
to VP-102 have been successfully resolved, enabling us to move
toward approval,” said Ted White, Verrica’s President and Chief
Executive Officer. “We remain confident in VP-102’s commercial
potential. There is a high unmet medical need for molluscum
treatments—the viral skin disease affects approximately 6 million
people a year in the U.S., mostly children, and there are no
FDA-approved treatments. We look forward to continuing our dialogue
with the FDA on the appropriate path forward for approval of
VP-102.”
Mr. White continued: “In addition, we are excited to continue
the expansion of our portfolio into dermatologic oncology by
advancing LTX-315, an oncolytic peptide, into clinical development
for the treatment of basal cell carcinoma. Skin cancer is the most
common cancer in the U.S., with 5 million diagnoses of basal and
squamous cell carcinomas each year. We recently submitted an IND
for LTX-315 and look forward to initiating our Phase 2 trial in
basal cell carcinoma in the first quarter of 2022.”
Business Highlights and Recent Developments
- On September 20, 2021, Verrica announced that the U.S. Food and
Drug Administration (“FDA”) issued a Complete Response Letter
(“CRL”) regarding its New Drug Application (“NDA”) for VP-102
(cantharidin 0.7% Topical Solution) for the treatment of molluscum
contagiosum (“molluscum”). According to the CRL, the FDA identified
deficiencies at a facility of a contract manufacturing organization
(“CMO”), which were not specifically related to the manufacturing
of VP-102 but instead raised general quality issues at the
facility. The FDA did not identify any clinical, safety or product
specific Chemistry, Manufacturing, and Controls (“CMC”)
deficiencies related to VP-102. Following the CRL, on September 22,
2021 Verrica received a General Advice Letter from the FDA with
recommendations to improve YCANTH’s user interface.
- On November 5, 2021, Verrica was notified that the inspection
of the CMO has been classified as “voluntary action indicated”
(“VAI”), is now closed and that the VAI classification will not
directly negatively impact FDA’s assessment of the Company’s NDA
regarding this CMO. With the satisfactory resolution of the
facility inspection, Verrica has engaged the FDA to determine the
next steps toward the potential approval of VP-102 for the
treatment of molluscum.
- In October 2021, the Company submitted an Investigational New
Drug Application (“IND”) for LTX-315, a first-in-class oncolytic
peptide, for use in basal cell carcinoma. The Company expects to
initiate our Phase 2 trial in basal cell carcinoma in the first
quarter of 2022.
Financial Results
Third Quarter 2021 Financial Results
- Research and development expenses were $3.8 million in the
third quarter of 2021, compared to $5.0 million for the same period
in 2020. The decrease was primarily attributable to lower CMC
(Chemistry, Manufacturing, and Controls) and clinical costs related
to Verrica’s development of VP-102 for external genital warts and
common warts, partially offset by increased compensation
costs.
- General and administrative expenses were $8.0 million in
the third quarter of 2021, compared to $4.6 million for the same
period in 2020. The increase was primarily driven by increased
headcount and other expenses related to pre-commercial activities
for VP-102, as well as an increase in insurance, professional fees
and other operating expenses.
- For the third quarter of 2021, net loss on a GAAP basis was
$12.8 million, or $0.47 per share, compared to a net loss of
$10.5 million, or $0.42 per share, for the same period in
2020.
- For the third quarter of 2021, non-GAAP net loss was
$11.0 million, or $0.40 per share, compared to a non-GAAP net
loss of $9.0 million, or $0.36 per share, for the same period in
2020.
Year-to-Date September 2021 Financial Results
- Verrica recognized license revenues of $12.0 million for the
nine months ended September 30, 2021 related to the Collaboration
and License Agreement with Torii Pharmaceutical Col, Ltd. There
were no license revenues recognized in 2020.
- Research and development expenses were $12.6 million for the
nine months ended September 30, 2021, compared to $13.4 million for
the same period in 2020. The decrease was primarily attributable to
decreased CMC and clinical costs related to Verrica’s development
of VP-102 for molluscum contagiosum, external genital warts, and
common warts, partially offset by a one-time $2.3 million milestone
payment to Lytix Biopharma AS upon the achievement of a regulatory
milestone for LTX-315.
- General and administrative expenses were $21.9 million for
the nine months ended September 30, 2021, compared to $14.7 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 nine months ended September 30, 2021, net loss on a
GAAP basis was $25.5 million, or $0.95 per share, compared to
a net loss of $29.7 million, or $1.19 per share, for the same
period in 2020.
- For the nine months ended September 30, 2021, non-GAAP net loss
was $19.8 million, or $0.73 per share, compared to a non-GAAP
net loss of $25.6 million, or $1.03 per share, for the same period
in 2020.
- As of September 30, 2021, Verrica had aggregate cash, cash
equivalents, and marketable securities of $79.5 million. The
Company believes that its existing cash, cash equivalents, and
marketable securities as of September 30, 2021 will be sufficient
to support planned operations into the third quarter of 2022.
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 charges 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 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. If
approved, VP-102 would 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. VP-102 would 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 Verrica’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, interactions with the FDA, the
clinical development of Verrica’s VP-102 for additional
indications and Verrica’s other product candidates, expectations
regarding the initiation of clinical trials for LTX-315, and
Verrica’s cash, cash equivalents and marketable securities being
sufficient to support planned operations into the third quarter of
2022. 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.Statements of
Operations(unaudited, in thousands except share
and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
License revenue: |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
12,000 |
|
|
$ |
- |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
|
3,763 |
|
|
|
4,988 |
|
|
|
12,572 |
|
|
|
13,401 |
|
General and administrative |
|
|
8,005 |
|
|
|
4,649 |
|
|
|
21,866 |
|
|
|
14,747 |
|
Total operating expenses |
|
|
11,768 |
|
|
|
9,637 |
|
|
|
34,438 |
|
|
|
28,148 |
|
Loss from operations |
|
|
(11,768 |
) |
|
|
(9,637 |
) |
|
|
(22,438 |
) |
|
|
(28,148 |
) |
Interest income |
|
|
31 |
|
|
|
69 |
|
|
|
96 |
|
|
|
473 |
|
Interest expense |
|
|
(1,092 |
) |
|
|
(918 |
) |
|
|
(3,198 |
) |
|
|
(2,042 |
) |
Net loss |
|
$ |
(12,829 |
) |
|
$ |
(10,486 |
) |
|
$ |
(25,540 |
) |
|
$ |
(29,717 |
) |
Net loss per share, basic and diluted |
|
$ |
(0.47 |
) |
|
$ |
(0.42 |
) |
|
$ |
(0.95 |
) |
|
$ |
(1.19 |
) |
Weighted average common shares outstanding, basic and diluted |
|
|
27,516,477 |
|
|
|
24,988,939 |
|
|
|
26,884,527 |
|
|
|
24,972,972 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
VERRICA PHARMACEUTICALS
INC.Selected Balance Sheet
Data(unaudited, in thousands)
|
|
|
|
|
|
|
|
|
|
|
September 30, 2021 |
|
|
December 31, 2020 |
Cash, cash equivalents and marketable securities |
|
$ |
79,495 |
|
|
$ |
65,470 |
|
Total assets |
|
|
88,756 |
|
|
|
74,154 |
|
Short term debt |
|
|
41,348 |
|
|
|
35,315 |
|
Total liabilities |
|
|
47,904 |
|
|
|
41,168 |
|
Total stockholders’ equity |
|
|
40,852 |
|
|
|
32,986 |
|
VERRICA PHARMACEUTICALS
INC.Reconciliation of Non-GAAP Financial Measures
(unaudited)(in thousands except per share
data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 –
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 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, 2020 |
|
|
|
Loss from Operations |
|
|
Net loss |
|
|
Net loss per share |
|
|
|
|
|
|
|
|
|
|
|
GAAP |
|
$ |
(9,637 |
) |
|
$ |
(10,486 |
) |
|
$ |
(0.42 |
) |
Non-GAAP
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation –
General & Admin (a) |
|
|
1,079 |
|
|
|
1,079 |
|
|
|
|
Stock-based compensation –
Research & Development (a) |
|
|
152 |
|
|
|
152 |
|
|
|
|
Non-cash interest expense
(b) |
|
|
- |
|
|
|
269 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted |
|
$ |
(8,406 |
) |
|
$ |
(8,986 |
) |
|
$ |
(0.36 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 –
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 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, 2020 |
|
|
|
Loss from Operations |
|
|
Net loss |
|
|
Net loss per share |
|
|
|
|
|
|
|
|
|
|
|
GAAP |
|
$ |
(28,148 |
) |
|
$ |
(29,717 |
) |
|
$ |
(1.19 |
) |
Non-GAAP
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation –
General & Admin (a) |
|
|
2,938 |
|
|
|
2,938 |
|
|
|
|
Stock-based compensation –
Research & Development (a) |
|
|
543 |
|
|
|
543 |
|
|
|
|
Non-cash interest expense
(b) |
|
|
- |
|
|
|
596 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted |
|
$ |
(24,667 |
) |
|
$ |
(25,640 |
) |
|
$ |
(1.03 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
- 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.
- 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:
Terry KohlerChief Financial
Officer484.453.3296info@verrica.com
William WindhamSolebury
Trout646.378.2946wwindham@soleburytrout.com
Media:
Zara LockshinSolebury
Trout646.378.2960zlockshin@soleburytrout.com
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