Verrica Pharmaceuticals Q3 Earnings Call Highlights

Key Points

• YCANTH U.S. sales reached a quarterly record of $5.7 million, up 57.9% year over year, despite a modest sequential decline in dispensed units. Total revenue fell to $6.9 million from $14.3 million, which included a one-time $10 million Japan approval milestone payment in the prior-year quarter.
• Verrica completed enrollment in its first pivotal YCANTH common-warts trial and expects results in Q1 2027; results from the second trial are expected by mid-2027. Torii is funding about 90% of the program’s current costs.
• The company is planning a proof-of-concept study of VP-315 in Gorlin syndrome. Verrica had $14.4 million in cash at September’s end and said its runway could extend into Q4 2027 if it draws remaining credit, while its quarterly net loss widened to $12.4 million.

Verrica Pharmaceuticals NASDAQ: VRCA reported record quarterly U.S. revenue for its molluscum treatment YCANTH in the third quarter of 2026, even as total revenue fell from a year earlier and its net loss widened.

The company also outlined plans to explore its experimental drug VP-315 in patients with Gorlin syndrome, a rare genetic disorder that can cause numerous basal cell carcinomas. Meanwhile, Verrica expects results from two pivotal trials of YCANTH for common warts in 2027.

U.S. YCANTH net product revenue rose to $5.7 million, up 57.9% from the third quarter of 2025 and 11.9% from the preceding quarter. Total revenue fell to $6.9 million from $14.3 million a year earlier, when the company recorded a one-time $10 million milestone payment from partner Torii Pharmaceutical following YCANTH’s approval for molluscum in Japan.

YCANTH Sales Rise Despite Sequential Unit Decline

Verrica reported 19,135 dispensed YCANTH applicator units in the quarter, up 35.8% from a year earlier but down 491 units from the second quarter. President and CEO Jayson Rieger attributed the sequential decline to summer travel seasonality affecting patients and providers.

Management said improved prescription yield helped lift revenue. Chief Commercial Officer Chris Chapman said Verrica has been directing medical-benefit claims to in-network pharmacies able to obtain reimbursement, and expects further improvements as the approach expands.

Chapman said the company is also working to move occasional prescribers toward more consistent use. He expects normal seasonal patterns in the fourth quarter, including fewer office hours and changes in patients’ treatment-seeking behavior.

Rieger said a major challenge remains the “watch-and-wait” approach to molluscum treatment. He cited analyses from YCANTH’s two registrational trials showing that treated patients achieved complete clearance approximately four times faster than placebo patients.

Common Warts Trial Results Expected in 2027

Verrica completed enrollment in COVE-2, the first pivotal phase III trial of YCANTH for common warts, and expects top-line results in the first quarter of 2027. Enrollment in the second trial, COVE-3, exceeded 50% of its target in late August, with top-line results expected by mid-2027.

Torii is funding the first $40 million of trial costs, or approximately 90% of the current program budget, Rieger said. Verrica estimates that common warts affect approximately 22 million people in the U.S. and sees a potential multibillion-dollar opportunity if YCANTH’s label is expanded.

Chief Medical Officer Noah Rosenberg said an interim analysis of COVE-2 did not include a specific futility assessment. The blinded analysis found no need to add patients, but Rosenberg noted that this outcome could mean either that the trial had enough patients or that increasing enrollment would not provide sufficient statistical power.

Asked whether Verrica could submit a regulatory application by the end of 2027 if the trials succeed, Rieger said the company would work to file as quickly as possible but did not provide a target date.

VP-315 Study and Cash Runway

Verrica is designing a potential proof-of-concept study of VP-315 in Gorlin syndrome, with the protocol, budget and timeline still being finalized. Rosenberg said there are no FDA-approved therapies specifically for the condition, whose patients can undergo repeated surgeries for basal cell carcinomas.

In a previously disclosed phase II study in sporadic basal cell carcinoma, VP-315 produced a 97% objective response rate and an average 86% reduction in treated tumor size, Rosenberg said. Untreated lesions also shrank, suggesting a possible effect beyond the injection site. Patients with Gorlin syndrome were excluded from that study.

Rieger said data from the proposed Gorlin study could inform a phase III program in sporadic basal cell carcinoma, a potential Gorlin-specific program, or both. He said Verrica would not necessarily need to complete the entire proof-of-concept study before initiating a phase III trial.

Verrica ended September with $14.4 million in cash, including $12.5 million borrowed under a credit facility with an entity controlled by Chairman Paul Manning. After the quarter, the company met milestones that made a further $15 million available to draw.

Interim Chief Financial Officer John Kirby said that, assuming use of the remaining credit, cash runway could extend into the fourth quarter of 2027, beyond the expected common warts readouts. He added that costs for a Gorlin study would be incorporated into future operating plans as they are finalized.

Verrica’s third-quarter GAAP net loss widened to $12.4 million, or $0.58 per share, from $0.3 million, or $0.03 per share, a year earlier. Research and development expenses rose to $7.6 million from $2.2 million, partly reflecting common warts trial costs that Kirby said did not affect Verrica’s cash balance because of Torii’s funding commitment.

About Verrica Pharmaceuticals (NASDAQ:VRCA)

Verrica Pharmaceuticals Inc. is a dermatology-focused biopharmaceutical company developing and commercializing therapies for skin diseases that have limited or inadequate treatment options. The company's activities center on prescription products designed for use by dermatologists and other healthcare professionals. Verrica's lead commercial product is YCANTHE (cantharidin) topical solution, 0.7%, a prescription treatment approved by the U.S. Food and Drug Administration for molluscum contagiosum in adults and children two years of age and older.

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