On May 9, 2022 Verrica Pharmaceuticals Inc. (Verrica) (Nasdaq: VRCA), a dermatology therapeutics company developing medications for skin diseases requiring medical interventions, reported financial results for the first quarter ended March 31, 2022 (Press release, Verrica Pharmaceuticals, MAY 9, 2022, View Source [SID1234613945]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

"This quarter, we achieved commercial readiness and entered the final stage of pre-launch operations as our PDUFA date approaches for VP-102, potentially the first treatment approved by the FDA to treat molluscum," said Ted White, Verrica’s President and Chief Executive Officer. "We look forward to potentially bringing treatment and relief to thousands of patients, primarily children, suffering from molluscum, starting with a sales focus in Dermatology, Pediatric Dermatology and key academic centers and health systems."

Mr. White continued: "We also dosed the first patient in our Phase 2 trial of LTX-315, a novel immunotherapy, in basal cell carcinoma, the most common type of cancer in the world. We are excited about this innovative, non-surgical approach to non-melanoma skin cancers. We expect to enroll over 60 patients in the trial and look forward to providing further updates."

Business Highlights and Recent Developments

VP-102

Verrica’s lead product candidate, VP-102, is currently under U.S. Food and Drug Administration (FDA) review and has an upcoming Prescription Drug User Fee Act (PDUFA) goal date of May 24, 2022.
LTX-315

In April 2022, Verrica dosed the first patient in its Phase 2 clinical trial of 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 LTX-315 when administered intratumorally to adults with biopsy-proven basal cell carcinoma.
Financial Results

First Quarter 2022 Financial Results

Verrica recognized license revenues of $0.4 million in the first quarter of 2022 compared to $12.0 million for the same period in 2021 related to the Collaboration and License Agreement (the "Torii Agreement") with Torii Pharmaceutical Col, Ltd ("Torii"). The license revenue in the first quarter of 2022 consisted of supplies and development activity with Torii and the same period of 2021 was related to a Torii upfront license milestone payment of $12.0 million.
Research and development expenses were $2.7 million in the first quarter of 2022, compared to $5.4 million for the same period in 2021. The decrease was primarily attributable to a one-time $2.3 million milestone payment to Lytix Biopharma AS upon the achievement of a regulatory milestone for LTX-315 in the first quarter of 2021.
General and administrative expenses were $5.1 million in the first quarter of 2022, compared to $6.6 million for the same period in 2021. The decrease was primarily related to a ramp up of pre-commercial activities for VP-102 during the first quarter of 2021 partially offset by increased expenses in the first quarter of 2022 related to increased headcount.
For the first quarter of 2022, net loss on a GAAP basis was $8.5 million, or $0.31 per share, compared to a net loss of $0.9 million, or $0.04 per share, for the same period in 2021.
For the first quarter of 2022, non-GAAP net loss was $6.8 million, or $0.25 per share, compared to a non-GAAP net income of $0.8 million, or $0.03 per share, for the same period in 2021.
As of March 31, 2022, Verrica had aggregate cash, cash equivalents, marketable securities and restricted cash of $61.9 million. The Company believes that its existing cash, cash equivalents and marketable securities as of March 31, 2022, 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) income from operations, non-GAAP net (loss) income and non-GAAP net (loss) income 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) income from operations, non-GAAP net (loss) income and non-GAAP net (loss) income 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) income from operations, non-GAAP net (loss) income and non-GAAP net (loss) income 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) income from operations, non-GAAP net (loss) income and non-GAAP net (loss) income 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 is currently under U.S. Food and Drug Administration (FDA) review and 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. If approved, VP-102 will 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.