Hello, everyone, and welcome to this next in the series of fireside chats here at the H.C. Wainwright Fourth Annual BioConnect Investor Conference. My name is Ram Selvaraju, and I'm a managing director and senior healthcare equity research analyst with the firm. The next company is, I'm pleased to introduce, Verrica Pharmaceuticals, which trades on the Nasdaq under the ticker symbol VRCA. I'm joined today by Jayson Rieger, Chief Executive Officer, and John Kirby, Chief Financial Officer. Gentlemen, it's a pleasure to have you with us.
Thank you for having us.
Thanks for having us.
As many in the audience probably already know, Verrica is a commercial stage company with a marketed product. Perhaps it probably would be best for us to start there. Jayson, tell us about your marketed product, YCANTH.
Sure. Thank you, and thank you for the opportunity to be here today. YCANTH is the first FDA-approved, you know, in-office treatment for molluscum contagiosum, a childhood, predominantly childhood pox virus, often presents, you know, in about up to six million patients a year, can last up to about 13 months on average, in some cases much longer than that. Prior to YCANTH, there was no FDA-approved product. It's a very, you know, simple product. You know, you come to the office, you get diagnosed, doctor writes a prescription, it gets delivered right to the doctor's office. You come back in in a short treatment visit, about 15 minutes on average. Can be by the clinician, it can be by any other HCP that's trained in the office. Treat the lesions.
About three weeks later, you come back for a second treatment. In most cases, that's been enough to really address the disease for most patients. Very safe, very efficacious, and the clinical results have been very consistent with what we're seeing commercially. I was pleased to announce, you know, in our earnings last week that we've now dispensed over 100,000 units of YCANTH in the market. We're starting to see real uptake and penetration. Importantly, results that are consistent with what we saw in the clinical studies, which is always nice to see with a commercially available product.
You know, maybe we could talk a little bit about what you saw in particular in the first quarter.
Sure.
Also to whatever extent you can talk about it, you know, what you saw in April, you know, any emergent trends in the market that are likely to have important ramifications for commercial uptake of the product at this point.
Absolutely. You know, Joe Bonaccorso and I started in this company, you know, November of 2024, you know, revamped the commercial structure and the commercial marketing approach of the business. When we reported our end-of-year results, you know, we reported, you know, nearly 100%, you know, doubling of the dispensed units year-over-year and 130% year-over-year revenue growth. That was really solid way to end, you know, 2025. You know, as we began 2026, you know, the growth we saw in March was a new record for monthly performance, and we saw those trends continuing in April, as we're getting better uptake of the product and, you know, more adoption. We saw, you know, growth last year and that growth continuing this year.
The weather, you know, was challenging for most people, especially for HCP-administered products in January when you couldn't get out of your house due to the winter storms, but we really saw that momentum take hold in February, and then March and April were near record months.
Maybe give us a sense of if there are key seasonality aspects to YCANTH, and also, you know, talk through some of the factors pertaining to the deductible and co-pays.
Sure. I would say that, you know, like any, you know, disease that's transmitted by skin-to-skin contact or, you know, interaction with other people or sharing of toys, et cetera, that can occur frequently in the summer months, you know, as you come into spring and people are out more, et cetera. You can see it indoors as well with gyms and, you know, where people go in the wintertime. As we are early in the market in growth of this, you know, seemingly untapped market opportunity in molluscum, I think we'll see some seasonality, but it's much more around travel inconvenience to treat the disease more so than disease prevalence, although there are some who speculate fall and spring are likely to be, you know, solid months of this.
In terms of the way we provide access to the drug, we've worked really hard to invest in our co-pay assistance program. When a doctor writes the prescription, you know, there's a high probability if you've got insurance that that drug is going to get delivered to that doctor's office and they're going to be able to treat you. We've invested heavily in that co-pay program where most patients will pay a maximum of $25 out of pocket as their co-pay, and that drug will be delivered, and we will help support with our co-pay assistance.
You know, particularly in the early parts of the year when there's deductible season and patients, you know, are starting to reset their insurance, you know, we provide that support because we wanna believe and make sure that drug is available for the patients to get treated and the clinicians to do so. As we think about one of the reasons why we do that is the relationship with that clinician and treating the patients is really important to us, and we have a follow-on indication in common warts, which I'm sure we can talk about. It's about three and a half times the market size, but that phase III is ongoing as we speak, but it will be the same target patients, sorry, target clinicians who would treat the disease, dermatologists and pediatricians.
If it's on label, that would really dramatically expand. We're setting up those relationships now with molluscum as a compelling, you know, growth opportunity, and then common warts would be a great opportunity on top of that.
Maybe talk also about the YCANTH Rx program and what impact you expect it to have on an ongoing basis on YCANTH uptake and also the degree to which the product can be profitable.
Sure. We've spent a lot of effort trying to make sure access is readily available, efficient, and as easy as possible. For clinicians that are just joining to be part of the YCANTH prescribers, we set up a program called YCANTH Rx. It's a non-dispensing pharmacy that clinicians can write to, and YCANTH Rx will help support in prior authorizations and routing of scripts to pharmacies that can fulfill and cover for that patients. We are not forcing that on any clinicians. It is yet another tool we've made available, and we're seeing some adoption, particularly on some of our newer customers that come on board. You know, rather than having learned with us and grown through finding a pharmacy to cover, they can start this way.
It's an easier adoption. Some of our existing customers helped us evaluate the rollout, the efficiency of it, and we're starting to see that. This should ultimately lead to faster coverage, you know, more efficient, you know, coverage, prior authorizations getting through, and ultimately, you know, better profit for our company as we'll find, you know, ways to get the product fulfilled by a pharmacy where there's coverage.
Just remind us how many sales reps you currently have in the field and how you're planning to evolve the sales and marketing infrastructure over the course of this year, as well as what the key metrics are that you anticipate monitoring in order to drive your future hiring decisions on the sales and marketing front.
Absolutely. We ended the quarter with about 44 reps. We've indicated that we plan to expand to about 50 this year, and we're doing so thoughtfully and prudently in terms of areas where we believe they can make a rapid impact, you know, get to growth where sustainability and also provide, you know, revenue to the company. We're doing so by evaluating good targeting, you know, high prescribers, et cetera. If we get to a territory where there's significant growth, we can explore splitting that territory and adding additional rep support in those communities as well as additional resources as we grow into hospitals and other larger institutions there. Ultimately, what we've aligned is the reps are there to support the clinicians, and that's their primary goal.
Whether you're in a hospital category, a support category, FRM category, or a field rep, everyone is aligned in the organization to support fulfillment of that script for that patient and make it easy for the doctor.
Usually in the context of indications where historically there hasn't been much of any formally approved therapy, what we do see is increased overall awareness once there are in fact multiple products in the space. Perhaps you could talk through, you know, what the arrival of ZELSUVMI or berdazimer, has meant for overall physician awareness and to what extent do you anticipate that this might actually turn out to be a tailwind for you guys?
Absolutely. You know, historically, molluscum was, you know, a virus that, you know, you went to the doctor, there was nothing they could do, so they would tell you, "Watch and wait. It'll go away." You know, oftentimes the clinicians would not try and scare the patient. It could go away in two weeks or two months, it could be one year or longer. For the patients that were in that latter category, you know, they would go see a dermatologist, you know, and try and find some remedy to try to address the disease. Verrica, you know, got YCANTH approved as the first commercially available product, last summer, berdazimer was launched as well.
It's a take-home product, you know, can take daily application can take up to, you know, three months of treatment consecutively to address the disease, whereas we're an efficient, you know, convenient in-office administration, often one or two treatments spaced three weeks apart, 15 minutes. Always like to say, you know, in my household, you know, bedtime, dinner time, bath time, and treatment would be a lot to take care of with multiple kids. You know, I'd much rather go to the doctor 15 minutes and be done and let them know what they're treating, how to do it, et cetera. That being said, the market is dominated by the historical mindset of do nothing or watch and wait because there was nothing to do.
With berdazimer out there, their field force educating molluscum contagiosum is a disease that the children deserve to have treated, so they don't have to suffer with the social stigma, you know, potential pain, itchiness, scarring, et cetera. Shared voice is important, oftentimes in new categories you need one, two, or even three entrants to really start to change the paradigm to treat. You know, we're in a very, very early innings. You know, both our companies combined are in the very low single-digit penetration, so lots of untapped opportunity. You know, we believe in the quality, the attributes, and benefit of YCANTH, and product profile often wins out in long run, and we're confident in what YCANTH offers, both in efficacy, safety, you know, economic benefit to the system, et cetera. We believe that we'll hopefully see that continue to grow.
Talk a little bit about the ex-U.S. opportunity, particularly as this pertains to Europe, where the CHMP recently indicated no additional phase III registrational data.
Sorry. Would need to be furnished in order to support a product approval. This is with respect to potential European registration of the product, that no additional phase III studies would be necessary. Maybe talk us through what you anticipate the filing and registration timeline to be for the product in Europe.
Absolutely. We're very excited, you know, that we got FDA approval in the U.S. Our partner, you know, Torii, now with Shionogi, got approval in Japan and launched in Japan, you know, earlier this year. We're gonna continue to explore what that looks like and the accessibility of YCANTH around the world. We approached regulators in Europe, the CHMP in particular, to understand what does the package look like. As many in this room are certainly aware, Europe typically requires, you know, active comparator trials and other ways that may be different than the trials you'd run in the U.S. We're very fortunate because there is no standard of care around the world, no predicate product, you know, they were amenable to no additional phase III trials being supportive. We're working with the regulators there.
The process in Europe is slightly different than the U.S., in terms of what you need to do, the steps you have to go through. Working prudently with that, in addition to looking for an appropriate partner, you know, in Europe to help us with the commercialization. We don't currently have that infrastructure. In an ideal world, we'd like to find someone similar to our partnership with Torii and Shionogi, where, you know, it's very collaborative. You know, they have a footprint there. It can really help us maximize the opportunity commercially, but also maximize the benefit for the children, as this disease is of similar prevalence around the world, you know, regardless of where you live. Pharmacoeconomic and socioeconomic differences aren't really relevant. You know, children get it, they suffer from it, and we really wanna make an impact there.
Can you just walk us through the salient features of what's been disclosed publicly regarding the financial terms of your arrangement with Torii and Shionogi?
Sure. I'll let Joe Bonaccorso Do you wanna comment on that?
Our partner Torii, now part of Shionogi, is doing the funding, the first approximately 90% of the budgeted cost of the common warts trial. We initiated that trial last December with the U.S. piece. There's a second trial that we've indicated will start midyear, which will be U.S. and Japan. They fund the first $40 million. We will repay that to them over the next five years, primarily through milestone payments, royalties, and selling product to them for distribution in Japan.
Maybe we can now shift to the common warts program.
Sure.
Maybe just walk us through the scope of that clinical development program and what the key upcoming data catalysts like, are likely to be and when those will accrue?
Absolutely. We're very excited. We launched that, you know, phase III program, first patient enrolled. We announced that, you know, in January this year. In our recent filing, you know, announced that we are over 50% enrolled in that first trial. About 300 patients is the targeted enrollment for both studies. The first study is U.S. only. The second study will be a combination of patients in the U.S. and Japan running with Torii Pharmaceutical. Importantly, to John Kirby's point, they're helping us fund that program as a global program. There'll be patients in both trials that support registration in both countries, a very efficient process. We're targeting to enroll the second trial and start that mid this year.
Once that has started, we'll provide sort of greater, you know, clarity as to when we might expect, you know, top-line data, full enrollment, et cetera. Because that second trial has not started yet, we wanna wait till that's done. We'll make that announcement and give greater clarity as to when people can expect, you know, enrollment goals to be, and then we can back into anticipated data readouts, et cetera.
How commercially synergistic are molluscum and common warts? To what extent do you anticipate your existing sales and marketing infrastructure could effectively pull double duty? You also indicated that the common warts indication is three and a half times larger than the molluscum indication. Maybe talk us through what the financial implications of that would be, and assuming the product gets registered in that indication.
Absolutely. I think that's one of the biggest opportunities forward-looking for where we are as a business. If that indication is approved, it's predominantly the same types of clinicians that are prescribing for molluscum, so it's pediatricians, it's primary care and dermatologists. They see these patients every day, common warts and molluscum. As we build the relationships with these providers treating molluscum, it will be the same exact applicator, the same, you know, generally the same approach to treatment of the warts, slight different in terms of preparation or occlusion of the lesions, but that's about it. Same way to access the drug and the procedures for writing the pharmacy, YCANTH Rx, et cetera. They'll also be familiar with the mechanism of action, you know, the potential side effects, although they're predominantly local skin reactions you'd expect from a vesicant.
I think that's As we think about this business, we don't expect to materially increase our field force just at that time. We'll certainly work hard on the medical education side, et cetera, and product awareness, but it's something we get asked a lot by our field force, you know, that clinicians ask them, "You kinda treat common warts with this," and they refer it to medical because it's not on label right now. That's really important. It's a real opportunity that people are interested in. When they have familiarity, all the work we're investing in now in that relationships with those clinicians should bode well for that program.
With respect to the product presentation, the way the product is currently delivered, how are you thinking about sort of life cycle management and future optimization of this? Obviously the product is delivered using an applicator.
Yes.
Maybe talk about how you're working on improving the applicator.
We continue to look at the applicator. You know, I would say fortunately, you know, a lot of effort went into the design before the first launch. We have, you know, significant IP position around the design, the applicator, the formulation, the method of purification, the treatment, et cetera. We have a robust IP estate, you know, that extends, you know, well into the future. We will constantly continue to evaluate, you know, ways to improve it, optimize both efficiency in manufacturing. We'll continue to reduce COGS as we gain scale and automation, you know, potentially on the product. There's a lot of things we can invest in the future, but right now. You know, our supply chain provides product. We have manufacturer relationships.
We do most of the work here in the U.S. currently, we're excited about what that, what that could do. Importantly for common warts, it's the same product, so there's not a lot of redoing, et cetera, to go there. We'll continue to think about new ways to innovate, right now I would say focus is on molluscum, common wart clinical trial, importantly the next innovation thing as part of our pipeline will be our basal cell carcinoma program, VP-315. I think that's the next other big piece of our innovative pipeline that we're working on right now.
That's a really good segue because the next thing I was gonna ask about was VP-315. You know, my understanding is that FDA alignment has been reached with respect to the pivotal registrational program for VP-315, and that this is going to consist of two pivotal studies.
Yes
each of which would enroll about 100 subjects, right?
Correct.
Complete clearance at week 14 is the primary endpoint, right?
Correct.
Just walk us through what potential funding options there may be to move this program forward and where you are in terms of, you know, CMC and CRO selection?
Yeah, we're really excited about that program. When we embarked on it, the goal was can we change the way you think about and treat basal cell carcinoma, one of the most prevalent skin cancers to treat patients? Importantly, it's often treated with surgery, and I always liken to you have a room, you have a couple dozen people in this room, how many people would rather have surgery versus get an injection and a lesion? Often you get very few hands who want surgery. What we've learned in the efficacy of this data, and importantly the safety, is two simple injections day one and day two, patient comes back week 12 for an assessment, more than half those patients 100% histological clearance, no evidence of remaining basal cell.
The other patients, it was about two-thirds, you know, or greater reduced, so overall 85% reduction in tumor mass or tumor burden for these patients. Importantly, last week we also presented data at the SID conference in Chicago where we said lesions. When these patients came in, some of them had multiple lesions that weren't even treated, and they just observed them throughout, and they saw shrinkage of those abscopal or distal lesions that weren't even treated. Begins to support the science behind immune engagement, et cetera.
Getting alignment with the FDA was really critical for this program and how to advance it because it allows us to run a very efficient clinical trial with crisp endpoints at week 14 and alignment with the FDA that after approval we would explore longer term follow-up studies, you know, see what these lesions look like multiple years, do you get recurrence, et cetera. Based on the mechanism of action, you know, we're highly optimistic what those studies could look like. In terms of, you know, funding, et cetera, it's a very good question. You know, right now we're using existing capital and funds to support, you know, CMC production to support the phase III clinical program. We're evaluating CRO selection, getting those budgets in place.
Always tell people, When you think about oncology programs, you can think of the buckets that are the tens of millions or hundreds of millions." This will certainly be in the tens of millions bucket, so from affordability even for a small company, it's well within, you know, the realm of things we could contemplate. There's also been significant engagement in the scientific community, thought leaders, KOLs, you know, and, you know, we'll call it the pharma and other companies that are potentially interested to explore whether we could do co-development or something of that nature. We're keeping our options open and exploring that, but we're preparing aggressively so we can be ready for that and maximize the time or minimize the time to get this to patients in need.
Maybe just to drill down on the clinical data that's available so far, in particular with respect to the degree of histological clearance and also the abscopal effect that you see?
Yes
with 315.
Like, like I alluded to, about 51% complete histological clearance. The abscopal effect, you know, in our studies we had about 14 lesions that were observed in a trial that were distal and not treated. Three of those 14 were completely gone at the week 12 assessment. You're thinking about lesions that would normally not go away on their own for patients, that would often require surgery to remove. These patients were seeing these lesions disappear. For all the lesions in totality, we saw about a two-thirds shrinkage, and this is histologically and this is only at week 12. As part of the unique mechanism of VP-315, it causes apoptosis, you know, necrosis causes destruction of the mitochondrial membranes of these tumors, presents those antigens, and you get immune engagement.
That allows both a primary killing destruction mechanism as well as an immune mechanism to engage. You know, there's plenty of clinical data, we could spend a lot of time talking about this program, that suggests, you know, a potential vaccine-like concept that you could be doing for basal cell, which is normally very heterogeneous and very good at hiding from your immune system. We're really excited about the potential for that. Our primary registration endpoint will be destruction of those lesions and week 12 primary endpoint of complete clearance. We'll continue to explore the abscopal benefit and everything else that could benefit patients and clinicians.
In terms of segmenting the BCC target population, how many of these patients are likely to be primarily served by the abscopal effect characteristics of this candidate?
If you look at the basal cell community, if you have one, oftentimes in the next several years in your lifetime you'll have more than one, and unfortunately most people will have them. We're exposed to the sun, aging, et cetera. If you can think about a way where patients who don't want to come back, you know, or don't see the dermatologist frequently, if you can treat their lesions initially with this product and potentially reduce, prevent, you know, recurrence, et cetera, in the future, that would be amazing. We're using that as a value add opportunity.
The way we're thinking about this initially is treat the primary lesion and eliminate that primary lesion, but importantly as you think about surgical, if patients aren't 100% clear they need to have surgery, the Mohs surgeons, the clinicians that have to clear out the lesions and cut it out, the lesion's much smaller. Smaller lesions lead to less complications, less scar, you know, less, you know, burden for the patient and better recovery. There are also plenty of lesions, back of the leg, on areas that move, arms, shoulders, et cetera, that don't heal very well, are very hard to suture. This presents an opportunity to treat those as well, as well as on cosmetically sensitive places like the face.
Oftentimes when we speak to clinicians, it's, "Where would I not use this?" When you think about the nearly 4 million patients here, even at modest price points for this product, you can envision this being a multi-billion dollar product. That's really, really exciting about being able to change that type of impact for that many patients, but also work synergistically with the Mohs surgeons and clinicians on those cases, to help their outcomes as well.
Fantastic. I think we're gonna have to leave it there, but really wanted to make sure that our audience registers the fact that this is not only a forward integrated company, but one that has multiple layers of additional incremental intrinsic value that can be readily added onto the already established commercial opportunity with YCANTH and molluscum. Thank you so much, gentlemen, for joining us today, and thank you to our audience for their attention.
Thank you so much.