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
- In July 2022, Torii Pharmaceutical Co., Ltd. (“Torii”) dosed
the first patient in its Phase 3 trial of VP-102 (referred to as
TO-208 in Japan) for molluscum contagiosum in Japan, triggering an
$8 million milestone payment from Torii to Verrica.
VP-LTX-315
- Verrica continued to progress its Phase 2 clinical trial of
VP-LTX-315, a potentially first-in-class oncolytic peptide
immunotherapy, for the treatment of basal cell carcinoma. 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-LTX-315 when
administered intratumorally to adults with biopsy-proven basal cell
carcinoma. Part 1 (safety and dose escalation) is expected to
conclude in Q1 2023.
Financial Results
Third Quarter 2022 Financial Results
- Verrica recognized license revenues of $8.3 million for the
three months ended September 30, 2022 and no license revenue for
the same period in 2021 related to the Collaboration and License
Agreement (the “Torii Agreement”) with Torii for supplies and
development activity with Torii.
- Research and development expenses were $2.9 million in the
third quarter of 2022, compared to $3.8 million for the same period
in 2021. The decrease was primarily attributable to a reduction of
Chemistry, Manufacturing and Controls (CMC) and clinical costs
related to our development of VP-102 for molluscum contagiosum,
external genital warts and common warts and reduction in
compensation due to reduction in headcount.
- General and administrative expenses were $3.9 million in
the third quarter of 2022, compared to $8.0 million for the same
period in 2021. The decrease was primarily a result of higher
expenses in the prior year related
to pre-commercial activities for VP-102 and
reduction in compensation costs due to reduction in headcount.
- For the third quarter of 2022, net income on a GAAP basis was
$83 thousand, or $0.00 per share (basic and diluted), compared to a
net loss of $12.8 million, or $0.47 per share, for the same period
in 2021.
- For the third quarter of 2022, non-GAAP net income was
$2.9 million, or $0.07 per share (basic and diluted), compared
to a non-GAAP net loss of $11.0 million, or $0.40 per share, for
the same period in 2021.
Year-to-Date September 2022 Financial Results
- Verrica recognized license revenues related to the Torii
Agreement of $9.0 million for the nine months ended September 30,
2022 compared to $12.0 million for the same period in 2021. The
current period license 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. License
revenue for the nine months ended September 30, 2021 comprised of
$0.5 million received in December 2020, and an $11.5 million
up-front payment paid in April 2021, pursuant to the exercise of
the license option on March 17, 2021 per the Torii Agreement.
- Research and development expenses were $9.8 million for
the nine months ended September 30, 2022, compared to $12.6 million
for the same period in 2021. The decrease was primarily
attributable to one-time payments of $2.3 million and $1.0 million
to Lytix upon the achievement of regulatory milestones for LTX-315,
during the nine months ended September 30, 2021 and 2022,
respectively, as well as decreased CMC and clinical costs related
to Verrica’s development of VP-102 for molluscum contagiosum,
external genital warts, and common warts in 2021.
- General and administrative expenses were $14.2 million for
the nine months ended September 30, 2022, compared to $21.9 million
for the same period in 2021. The decrease was primarily a result of
a decrease in expenses related
to pre-commercial activities for VP-102 and
reduction in compensation costs due to reduction in headcount.
- For nine months ended September 30, 2022, net loss on a GAAP
basis was $18.6 million, or $0.58 per share, compared to a net
loss of $25.5 million, or $0.95 per share, for the same period in
2021.
- For nine months ended September 30, 2022, non-GAAP net loss was
$12.7 million, or $0.40 per share, compared to a non-GAAP net
loss of $19.8 million, or $0.73 per share, for the same period in
2021.
- As of September 30, 2022, Verrica had aggregate cash, cash
equivalents, marketable securities and restricted cash of
$39.5 million. The Company believes that its existing cash,
cash equivalents and marketable securities as of September 30,
2022, will be sufficient to support planned operations into the
third quarter of 2023.
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.
FOR MORE INFORMATION, PLEASE
CONTACT:Investors:
Terry KohlerChief Financial
Officer484.453.3296info@verrica.com
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