News Release Details
Verrica Pharmaceuticals Reports Second Quarter 2021 Financial Results
“This quarter, we continued to ramp up commercial preparations for the potential FDA approval of VP-102, our lead product candidate for the treatment of molluscum contagiosum, including strengthening our senior leadership team and ensuring patient access to VP-102 through productive dialogue with medical providers and payors,” said
Business Highlights and Recent Developments
- In
May 2021 , the Company announced that theU.S. Food and Drug Administration (FDA) extended the Prescription Drug User Fee Act (PDUFA) goal date for the New Drug Application (NDA) for VP-102 (cantharidin 0.7% Topical Solution) for the treatment of molluscum contagiosum by three months toSeptember 23, 2021 to allow the Agency additional time to review information requested and submitted regarding the Company’s training program and distribution model. - The Company continued to expand its
U.S. commercial operations during the quarter in preparation for the potential FDA approval of VP-102, and has made key hires in marketing, sales and payor functions to support product launch and commercialization. The Company will be focusing its sales efforts in Dermatology, Pediatric Dermatology and key academic centers and health systems. - The Company strengthened its management team in anticipation of the potential commercial launch of VP-102 with the appointment of
Terry Kohler as Chief Financial Officer, effectiveJuly 16, 2021 .Mr. Kohler is a strategic and operational finance leader with over 20 years of commercial business experience, most recently at a global pharmaceutical company with annual revenues over$2 billion . - The Company continues to prepare to submit an Investigational New Drug Application for LTX-315 in the second half of 2021 for use in all malignant and pre-malignant dermatological indications, other than metastatic melanoma and metastatic merkel cell carcinoma.
Financial Results
Second Quarter 2021 Financial Results
- Research and development expenses were
$3 .4 million in the second quarter of 2021, compared to$3.5 million for the same period in 2020. The decrease was primarily attributable to lower clinical costs related to Verrica’s development of VP-102 for external genital warts and common warts. - General and administrative expenses were
$7 .3 million in the second quarter of 2021, compared to$5.1 million for the same period in 2020. The increase was primarily driven by increased headcount and other expenses related to pre-commercial activities for VP-102, as well as an increase in insurance, professional fees and other operating expenses. - For the second quarter of 2021, net loss on a GAAP basis was
$11 .8 million, or$0.43 per share, compared to a net loss of$9.4 million , or$0.38 per share, for the same period in 2020. - For the second quarter of 2021, non-GAAP net loss was
$9 .6 million, or$0.35 per share, compared to a non-GAAP net loss of$7.9 million , or$0.32 per share, for the same period in 2020.
Year-to-Date
- Verrica recognized license revenues of
$12.0 million for the six months endedJune 30, 2021 related to the Collaboration and License Agreement (the “Torii Agreement”) with Torii Pharmaceutical Co., Ltd (“Torii”). There were no license revenues recognized in 2020. - Research and development expenses were
$8 .8 million for the six months endedJune 30, 2021 , compared to$8.4 million for the same period in 2020. The increase 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, partially offset by decreased Chemistry, Manufacturing and Controls (“CMC”) and clinical costs related to Verrica’s development of VP-102 for molluscum contagiosum, external genital warts, and common warts. - General and administrative expenses were
$13 .9 million for the six months endedJune 30, 2021 , compared to$10.1 million for the same period in 2020. The increase was primarily driven by increased headcount and other expenses related to pre-commercial activities for VP-102, as well as an increase in insurance, professional fees and other operating expenses. - For six months ended
June 30, 2021 , net loss on a GAAP basis was$12 .7 million, or$0.46 per share, compared to a net loss of$19.2 million , or$0.77 per share, for the same period in 2020. - For the six months ended
June 30, 2021 , non-GAAP net loss was$8 .8 million, or$0.32 per share, compared to a non-GAAP net loss of$16.7 million , or$0.67 per share, for the same period in 2020. - As of
June 30, 2021 , Verrica had aggregate cash, cash equivalents, and marketable securities of$90 .1 million. The Company believes that its existing cash, cash equivalents, and marketable securities as ofJune 30, 2021 will be sufficient to support planned operations at least into the first quarter of 2023.
Non-GAAP Financial Measures
In evaluating the operating performance of its business, Verrica’s management considers non-GAAP loss from operations, non-GAAP net loss and non-GAAP net loss 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 from operations, non-GAAP net loss and non-GAAP net 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 loss from operations, non-GAAP net loss and non-GAAP net 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 loss from operations, non-GAAP net loss and non-GAAP net 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 is currently under
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
About
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 potential approval of the NDA for VP-102 and the potential benefits and potential commercialization of VP-102 for the treatment of molluscum, if approved, including the timing of launch, the clinical development of Verrica’s VP-102 for additional indications and Verrica’s other product candidates, and Verrica’s cash, cash equivalents and marketable securities being sufficient to support planned operations at least into the first 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, 2020 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.
Statements of Operations
(unaudited, in thousands except share and per share data)
Three Months Ended |
Six Months Ended |
|||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
License revenue: | $ | - | $ | - | $ | 12,000 | $ | - | ||||||||
Operating expenses: | ||||||||||||||||
Research and development | 3,447 | 3,521 | 8,809 | 8,413 | ||||||||||||
General and administrative | 7,284 | 5,110 | 13,861 | 10,098 | ||||||||||||
Total operating expenses | 10,731 | 8,631 | 22,670 | 18,511 | ||||||||||||
Loss from operations | (10,731 | ) | (8,631 | ) | (10,670 | ) | (18,511 | ) | ||||||||
Interest income | 33 | 126 | 65 | 404 | ||||||||||||
Interest expense | (1,077 | ) | (904 | ) | (2,106 | ) | (1,124 | ) | ||||||||
Net loss | $ | (11,775 | ) | $ | (9,409 | ) | $ | (12,711 | ) | $ | (19,231 | ) | ||||
Net loss per share, basic and diluted | $ | (0.43 | ) | $ | (0.38 | ) | $ | (0.46 | ) | $ | (0.77 | ) | ||||
Weighted average common shares outstanding, basic and diluted |
27,513,665 | 24,965,634 | 27,697,985 | 24,964,900 |
Selected Balance Sheet Data
(unaudited, in thousands)
Cash, cash equivalents and marketable securities | $ | 90,129 | $ | 65,470 | |||
Total assets | 99,030 | 74,154 | |||||
Short term debt | 41,005 | 35,315 | |||||
Total liabilities | 46,874 | 41,168 | |||||
Total stockholders’ equity | 52,156 | 32,986 |
Reconciliation of Non-GAAP Financial Measures (unaudited)
(in thousands except per share data)
Three Months Ended |
|||||||||||
Loss from Operations | Net loss | Net loss per share |
|||||||||
GAAP | $ | (10,731 | ) | $ | (11,775 | ) | $ | (0.43 | ) | ||
Non-GAAP Adjustments: |
|||||||||||
Stock-based compensation – General & Admin (a) | 1,423 | 1,423 | |||||||||
Stock-based compensation – Research & Development (a) | 425 | 425 | |||||||||
Non-cash interest expense (b) | - | 344 | |||||||||
Adjusted | $ | (8,883 | ) | $ | (9,583 | ) | $ | (0.35 | ) |
Three Months Ended |
|||||||||||
Loss from Operations |
Net loss | Net loss per share |
|||||||||
GAAP | $ | (8,631 | ) | $ | (9,409 | ) | $ | (0.38 | ) | ||
Non-GAAP Adjustments: |
|||||||||||
Stock-based compensation – General & Admin (a) | 1,039 | 1,039 | |||||||||
Stock-based compensation – Research & Development (a) | 213 | 213 | |||||||||
Non-cash interest expense (b) | - | 263 | |||||||||
Adjusted | $ | (7,379 | ) | $ | (7,894 | ) | $ | (0.32 | ) |
Six Months Ended |
|||||||||||
Loss from Operations |
Net loss | Net loss per share |
|||||||||
GAAP | $ | (10,670 | ) | $ | (12,711 | ) | $ | (0.46 | ) | ||
Non-GAAP Adjustments: |
|||||||||||
Stock-based compensation – General & Admin (a) | 2,528 | 2,528 | |||||||||
Stock-based compensation – Research & Development (a) | 723 | 723 | |||||||||
Non-cash interest expense (b) | - | 707 | |||||||||
Adjusted | $ | (7,419 | ) | $ | (8,753 | ) | $ | (0.32 | ) |
Six Months Ended |
|||||||||||
Loss from Operations |
Net loss | Net loss per share |
|||||||||
GAAP | $ | (18,511 | ) | $ | (19,231 | ) | $ | (0.77 | ) | ||
Non-GAAP Adjustments: |
|||||||||||
Stock-based compensation – General & Admin (a) | 1,860 | 1,860 | |||||||||
Stock-based compensation – Research & Development (a) | 390 | 390 | |||||||||
Non-cash interest expense (b) | - | 328 | |||||||||
Adjusted | $ | (16,261 | ) | $ | (16,653 | ) | $ | (0.67 | ) | ||
(a) The effects of non-cash stock-based compensation are excluded because of varying available valuation methodologies and subjective assumptions. Verrica believes 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. Verrica believes 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:
Chief Financial Officer
484.453.3296
info@verrica.com
Solebury Trout
646.378.2946
wwindham@soleburytrout.com
Media:
Solebury Trout
646.378.2960
zlockshin@soleburytrout.com
Source: Verrica Pharmaceuticals Inc.