Verrica Pharmaceuticals (VRCA) Q2 Earnings call transcript Aug 14, 2024

In the latest earnings call, Verrica Pharmaceuticals presented a strong performance for the second quarter of 2024, highlighting significant strides in the commercialization of YCANTH and the promising progress of their lead pipeline candidate, VP-315. The call, led by President and CEO, Ted White, provided insights into the company's strategic initiatives, financials, and market opportunities.

YCANTH Commercialization and Market Expansion

YCANTH, Verrica's first FDA-approved product for the treatment of molluscum contagiosum, demonstrated impressive growth in the second quarter, with a net revenue of $4.9 million. This achievement can be attributed to the successful addition of Cencora as a specialty distribution partner, which has expanded Verrica's reach in the dermatology sector. The company's strategic focus on simplifying the process for physicians to treat patients, coupled with the receipt of a permanent J-Code from CMS and the establishment of allowables across commercial coverage, has driven confidence in payer coverage and accelerated growth in buy and bill accounts.

Verrica's efforts to remove compounded cantharidin from the market, as seen with the recent settlement with Dormer Laboratories, has been a significant win for patient safety and access to an approved therapy. However, the process of removing compounded products will take time, and the company remains focused on customer conversion and demand generation.

VP-315: A Promising Cancer Therapy

VP-315, Verrica's lead pipeline candidate for the treatment of basal cell carcinoma, showcased remarkable results in the second quarter, with preliminary data from a Phase II study demonstrating a 51% complete histologic clearance rate and a 71% reduction in tumor size. These findings highlight the potential of VP-315 as a first-in-class oncolytic peptide that could significantly impact the treatment paradigm for basal cell carcinoma.

The company's strategic plan for VP-315 includes a Phase III trial, which is expected to initiate in the first half of 2025, subject to regulatory approval. This trial, jointly conducted with Torii Pharmaceutical, could pave the way for a potential nonsurgical alternative or neoadjuvant chemotherapeutic for basal cell carcinomas.

Financial Performance and Future Outlook

Verrica reported total revenues of $5.2 million in the second quarter, primarily driven by YCANTH sales. While the company's net loss increased compared to the previous year, it is important to note that this is a result of increased commercial activity for YCANTH and R&D expenses related to VP-315. The company's cash and cash equivalents as of June 30, 2024, are sufficient to fund operations into the first quarter of 2025.

Conclusion

Verrica Pharmaceuticals' second quarter 2024 earnings call provided a comprehensive overview of the company's strategic initiatives, financial performance, and market opportunities. With the successful commercialization of YCANTH and the promising progress of VP-315, Verrica is poised for continued growth and innovation in the pharmaceutical industry. The company's focus on patient-centric solutions and regulatory compliance, combined with its strategic partnerships and pipeline candidates, positions Verrica for a strong future in dermatology and oncology treatments.