Verrica Pharmaceuticals Q2 Earnings Call Highlights

Key Points

• YCANTH sales accelerated: U.S. net product revenue rose 18.7% sequentially to $5.1 million, while dispensed applicator units increased 28% to 19,626. Verrica also introduced $0 copay refills for eligible commercially insured patients to support continued adoption.
• Common-wart program advanced into pivotal testing: The second Phase III trial, COVE-3, began dosing, with top-line results from the broader program expected in mid-2027. Partner Torii is funding the first $40 million, or about 90% of the current trial budget.
• Cash resources improved despite a wider loss: Verrica posted a $13.2 million GAAP net loss as research, development and commercial expenses increased, but secured a non-dilutive credit facility of up to $27.5 million that management said could extend its cash runway into 2028.

Verrica Pharmaceuticals NASDAQ: VRCA reported second-quarter revenue growth in its YCANTH treatment for molluscum contagiosum, while outlining progress in pivotal studies of the product for common warts and announcing a credit facility that management said could extend its cash runway into 2028.

Chief Executive Officer Jayson Rieger said U.S. net product revenue for YCANTH reached $5.1 million in the quarter ended June 30, up 18.7% from the first quarter. Total revenue was $5.9 million, including $800,000 in license and collaboration revenue tied to the company’s partnership with Torii Pharmaceutical.

Dispensed YCANTH applicator units rose 28% sequentially to 19,626, accelerating from growth of more than 12% in the fourth quarter of 2025. Rieger said the increase reflected prescriber adoption and the commercial team’s efforts to retarget and segment the molluscum prescriber base.

YCANTH Commercial Strategy

Chris Chapman, Verrica’s chief commercial officer, said the company had refocused its field force on physicians who both prescribe YCANTH and treat the relevant patient population. The company also has been reviewing its market-access and fulfillment strategies.

During July, Verrica began offering $0 copay refills for eligible commercially insured patients, according to Rieger. He said the program is intended to reduce financial burdens for caregivers and help prescribers determine whether additional applicators are needed without access hurdles.

Chapman said the company expects continued growth during the summer, although seasonal factors such as vacations could affect performance. He declined to provide specific commentary on gross-to-net pricing, but said Verrica expects its revenue yield to “continue to accrete over time” as it focuses on both volume and fulfillment optimization.

Second-quarter gross product margin was approximately 91.5%, compared with approximately 92.5% a year earlier. Cost of product revenue totaled $400,000, versus $300,000 in the prior-year period.

Common Warts Program Advances

Verrica is pursuing an expanded YCANTH label for common warts, which Rieger said affects about 22 million people in the U.S. The company believes the indication is more than three times the size of the molluscum patient population and noted there are currently no FDA-approved treatments for common warts.

In June, Verrica and development partner Torii dosed the first patients in COVE-3, the second pivotal Phase III trial in the common warts program. Enrollment also continued in the first pivotal trial, COVE-2, and the long-term follow-up study, COVE-4. Rieger said all three studies were recruiting well and that the company expects top-line results from the program in mid-2027.

Chief Medical Officer Noah Rosenberg said Verrica has not disclosed the studies’ powering assumptions, but stated that results in line with the company’s Phase II cohorts would put the program “in pretty good shape.” He added that investigators have shown strong interest in the trials because of the lack of approved common-wart therapies.

Torii is funding the first $40 million of the global Phase III program, an amount Verrica said represents about 90% of the current trial budget. The companies are otherwise splitting program costs equally. Verrica said its share is expected to be funded through future commercial supply transfer payments, milestones and royalties associated with YCANTH sales in Japan.

International Expansion and VP-315

The company also announced an exclusive agreement with Medomie Pharma to distribute, market and supply YCANTH in Israel for molluscum. Medomie is preparing a regulatory submission, and Verrica will receive 60% of the net selling price from commercial sales, plus potential regulatory and commercial milestone payments of up to $8.2 million.

Rieger said Verrica retains global rights to YCANTH outside Japan and Israel and continues to pursue additional international partnerships. Torii launched YCANTH in Japan earlier this year, with Verrica supplying applicators to the Japanese market.

Separately, Verrica continues to prepare VP-315, its Phase III-ready oncology asset for basal cell carcinoma. At the Society for Investigative Dermatology annual meeting in May, the company presented Phase II findings involving nine subjects and 14 untreated, non-target basal cell lesions. Those untreated lesions showed an overall 67% reduction in size, and three achieved complete histological clearance, according to Rieger.

The company is selecting a contract research organization and manufacturing Phase III clinical supplies for VP-315 following what it characterized as favorable FDA feedback on the planned registration program.

Loss Widens as Development and Commercial Spending Rise

Verrica reported a GAAP net loss of $13.2 million, or $0.62 per share, compared with net income of $200,000, or $0.02 per share, in the second quarter of 2025. The prior-year revenue figure included an $8 million one-time milestone payment.

Research and development expense increased to $6 million from $1.8 million a year earlier, primarily reflecting costs related to the common warts program, excluding stock-based compensation. Selling, general and administrative expense rose to $10.3 million from $8.9 million, driven primarily by commercial spending associated with an expanded sales force.

The company also recognized $1.7 million of expense related to an agreement in principle to settle a 2022 class-action legal proceeding, net of insurance recovery.

On a non-GAAP basis, Verrica reported a second-quarter net loss of $10.2 million, or $0.48 per share, compared with non-GAAP net income of $1.2 million, or $0.12 per share, a year earlier.

As of June 30, Verrica had $11.2 million in cash. The company announced a non-dilutive credit facility of up to $27.5 million from an entity controlled by Chairman and largest shareholder Paul Manning. Verrica may borrow up to $12.5 million immediately, with another $15 million available upon specified revenue-growth and operational milestones that it aims to meet before the end of 2026.

David Zawitz, chief operating officer, said the secured facility carries interest at SOFR plus 8%, subject to a 4.5% SOFR floor, and has no scheduled principal or interest payments before its December 2030 maturity. Management said it intends to draw on the facility selectively as needed.

About Verrica Pharmaceuticals (NASDAQ:VRCA)

Verrica Pharmaceuticals Inc is a clinical‐stage biopharmaceutical company focused on the development and commercialization of topical therapies for dermatological conditions. Its lead investigational product, VP-102, is a standardized formulation of cantharidin in a pre-measured applicator designed to treat molluscum contagiosum and common warts. Verrica's approach emphasizes consistency of dosing and patient convenience, aiming to improve upon off‐label use of existing treatments.

Beyond VP-102, Verrica is advancing VP-103, a next‐generation topical candidate intended to optimize tolerability while maintaining efficacy against viral skin lesions.

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