Good afternoon, everyone, and thank you for joining the 2026 H.C. Wainwright 28th Annual Global Investment Conference. My name is Dr. Jade Montgomery, an associate research analyst at H.C. Wainwright, and I'm happy today to introduce our presenter for this session, Dr. Jayson Rieger, CEO of Verrica Pharmaceuticals. Jayson?
Thank you very much. Thank you all for attending here today, and it's certainly an exciting time at Verrica. We've made much progress over the last few years since I took over as CEO, and I really look forward today to sharing some of the highlights of what we've accomplished. As an overview, Verrica is a therapeutics development company working on commercializing and developing medications for the treatment of dermatologic diseases, including skin cancers. Let me start with a quick snapshot of what is Verrica and what is in our pipeline, and what we are trying to accomplish. First, we have a commercially available asset in YCANTH, available in the United States. and in Japan for the treatment of molluscum contagiosum. I'll share a little more details on molluscum, but it affects about six million patients in the United States each year, and mostly children.
We are working on a label expansion opportunity with YCANTH for the expansion into common warts. We have an ongoing global phase III program in collaboration with our Japanese partner, Shionogi, and I'll give updates on where that program is and the rapid progress we're making in the enrollment of those studies. We have a phase III-ready oncology program for basal cell carcinoma with our molecule VP-315, a small molecule peptide. This molecule is injected right into the lesions, and the intent is to mitigate the need or reduce any surgical needs for removing a basal cell. We've made exciting progress with the FDA, with regulatory feedback clarifying what is needed for phase III, and I'll highlight more details on that as well.
Lastly, as we look into the next 6-12 months, there are multiple key inflection points for the company, particularly around the phase III data for our common wart program, with top-line data expected for our phase III trials in Q1 for the first trial for COVE-2, and by mid-2027 for COVE-3. As you think about Verrica, it's important to think about YCANTH, a molecule as one platform with two large potential indications. The first one is molluscum contagiosum, the foundation of our commercial business at this time. YCANTH is the first FDA-approved HCP administered product for the treatment of molluscum contagiosum. Since commercial launch, we've administered about 120,000 applicators that have been dispensed. We've seen very meaningful increases in revenue and volume in 2025 over 2024, and continue to see growth as we begin 2026.
The product was approved in Japan late last year and launched earlier this year, and that partner, Shionogi, is handling that commercialization. Importantly, as we think about global expansion, YCANTH, we have approached the European Medicines Agency and reached alignment on no additional phase III trials required for registration, and we are working through the process to prepare for a regulatory filing in Europe. When it comes to expanding the population and the opportunity for YCANTH, we think about common warts. That trial has started last year and continued this year. There are 22 million patients affected by common warts each year, many who seek treatment and are frustrated with available therapies, but there are no FDA-approved therapies for the treatment of it. Relative to molluscum, it is three to four times larger in terms of the addressable population.
This makes common warts one of the largest unmet needs in dermatology and a potential billion-dollar market just in the U.S. The global phase III trials that we are conducting are with our partner, Torii Pharmaceutical, now Shionogi, and the arrangement we have made with them is they are going to provide the first $40 million of funding towards the conduct of that phase III program, which we expect to be about 90% of the cost. We will split those costs over time, 50/50 with them, with them fronting the cash part of the trials as it began. We plan to repay that out of future milestones and royalties in Japan, so it should have a minimal impact on our balance sheet if things go well.
Lastly, even though we set this program up with Shionogi, we still own the global rights to the market for YCANTH for both common warts and molluscum outside of Japan. A recent announcement we did with the licensing in Israel with a company called Medomie. As we think through our commercial business and what can happen, we are building the foundation of the company with the commercial effort in molluscum, targeting predominantly pediatricians and dermatologists. Many of those same patients are afflicted with common warts, and so our call points will have significant overlap and synergy. The drug device combination product is the same for both indications, so that also facilitates all of our commercial distribution, and pharmacy networks for the distribution of common warts indication if it is approved.
The phase III design is leveraged off of phase II data we conducted, and I will share some data with you later in the presentation, but where we saw almost 50% complete clearance of all the warts these patients had. Lastly, for the phase III programs that are ongoing, we conducted an interim powering promising zone analysis for that study just a few weeks ago, which confirmed that no additional patients are recommended for inclusion in that study. So we expect to read out that study in Q1 of next year with the second trial reading out in mid-year. Our second program in our pipeline is VP-315 for basal cell carcinoma. We believe it is one of the most compelling opportunities in late-stage oncology that is for unmet needs today.
The phase III asset is ready, it's innovative, and the goal is to provide a non-surgical alternative to the treatment of non-malignant skin cancer, where most patients would prefer not to have surgery if there's an option. I'll share some recent survey data on that shortly. Importantly, oncology, as many of you are familiar, there's usually a wide variety of patient response rates. In our case, 97% overall objective response rate was observed in the study, meaning nearly every patient saw a reduction in the size of the lesions by at least 30%, on average across the entire study, about 86% reduction in lesions, with some patients of over 50 achieving complete clearance histologically of those lesions.
We've met with the FDA, and they have indicated an alignment on two phase III trials, 100 patients each against placebo as the control, with a 12-week primary endpoint and all long-term follow-up studies, post-approval. That gives us a very expedited and efficient pathway towards approval, should the primary endpoint be met, and importantly brings a cost of a trial to tens of millions, not hundreds of millions, like traditional oncology programs, and likely timelines measured in quarters, not in years or longer. As you think about this, basal cell carcinoma, while often met and addressed with surgical alternatives, provides a very large addressable market. 3.6 million patients are affected by BCC each year, so very large addressable opportunity. Additionally, the molecule could be also relevant for squamous cell and other non-metastatic skin cancers. In summary, here's our pipeline. Commercial assets for YCANTH, for molluscum, that's already approved.
Common warts in phase III with our first trial, 100% fully enrolled, and the second trial exceeding 50% enrollment. Some of those patients are also in Japan, so we will be pursuing a joint PMDA, FDA submission and approval with our partner. Then the basal cell carcinoma program that we just discussed. Importantly, YCANTH and VP-315 both have IP runways that could extend to mid-2030s or early 2040s, and we're working very hard to advance both these programs. For the BCC program, we are currently manufacturing clinical supplies and working with CROs to identify to be phase III ready to start as early as next year. Obviously, we have a great team. I'm happy to share all the pictures here. More importantly, our team is entrepreneurial-minded. We're thinking about how to build a company, grow a company, and execute.
The team brings tremendous experience across dermatology, development, oncology, et cetera, with a mindset towards execution and product development. So, some brief background for everyone on molluscum. Molluscum is a pox virus. Think about chicken pox that you had when you were a child, but instead of going away in a week or two, it goes away in 12 to 18 months or perhaps longer. So, it affects children for a long period of time. The average is about 13 months. It can lead to social anxieties, challenges, et cetera, for these children, and most parents now would rather have it go away versus being told it'll go away on its own over 12 to 18 months. YCANTH is shown here, you can see the picture. The applicator contains a purple solution contained within a glass ampoule that keeps it stable for up to two years.
The applicator is broken, the ampoule is broken, and the drug is applied right on the lesions by the HCP or any medical professional in the office. The patient would come in, and often in about a 5 to a 10-minute visit, have all the lesions treated. Small amount of drug goes on, and those lesions are typically destroyed pretty quickly. It also helps to stimulate the immune system, which often the virus will hide from, and it's why it lasts so long. The lesions tend to incubate two to three weeks in your skin, which is why often several treatments can be required. But we're seeing on average, most patients are in the two-treatment range to significantly address their disease. Importantly, the molecule demonstrated significant safety in the clinical trials that were conducted. Adverse events were as what you expect for a local vesicant .
Majority were mild to moderate, and we had no serious adverse events reported in our clinical studies. Recently, we just announced some additional data to sort of help patients and clinicians decide on treatment modalities. What we saw was some patients can present with the disease for obviously 18 months or longer. So was there a real difference in the clearance rate for those patients? What we saw was meaningful numbers of patients cleared and statistically significantly more than placebo, whether you had the disease for 12 months or less, or much longer than that period of time. It's really important because some therapies will be applied and the patient's already on their way to clearance, so it just helps finish it. In our case, early on, these patients really would struggle, and the drug seems to work really well.
The median reduction in lesion count was nearly 100% for at least the majority of the patients, with almost every patient receiving a significant reduction in lesion count. For common warts, this obviously said, is still a HPV-driven virus. Most patients will have two to five l esions, not 10 to 30 as you would expect for a molluscum. Very prevalent, very difficult, and often very recurrent. Cosmetically, it's a big challenge as well. Many people have had them and tried to have them frozen or tried over-the-counter medicines and often encounter frustration. Our goal is to use YCANTH to address this. We have the ongoing global phase III program for common warts leveraging our phase II data. We have alignment with FDA and PMDA for the filing. The trials are ongoing.
I indicated we're splitting the cost in a creative collaboration with Torii, where they're providing the upfront capital, yet we still retain the full rights globally for the product. Here's some of the clinical data from that program. Importantly, we saw about 51% of the patients achieve complete clearance in the cohort that we're using in our clinical phase III program. This is now patients that have one or two or more, up to six warts in the study, and you can see that would be a meaningful accomplishment for these patients. Importantly, as we follow some of these patients six weeks or longer outside of the ongoing clinical study, about 80% of them still maintain the clearance of the warts that were gone during the course of the study.
The adverse event profile is what you would expect for a local vesicant, and most of them were local skin reactions as expected. For our BCC program, trying to highlight what we saw in that program and why we are excited about the molecule. The 97% objective response rate I already indicated is really important in reducing the tumor burden for these patients. We had no severe adverse events across over 93 lesions treated in the study. With those familiar with oncology, severe adverse events and adverse events are obviously a key part of those studies. Regulatory alignment was really important as we thought about the development of the program. Reaching that regulatory alignment is critical to understand what is involved, and the collaboration with the FDA and engagement was very, very positive.
The primary endpoint is 14 weeks, so for oncology, that is very, very short because of the way the nature of the study was designed. We saw an abscopal effect that could be really potentially important for this drug. That is a lesion that you treat on one side of your body if you observe lesions that were untreated on distal parts of the body. We also saw reduction in size, and in some cases, completely elimination of those lesions that were untreated. It really gives an opportunity to think about patients that present with a lot of these lesions, or very small ones that are yet to be identified could be some potential impact from this therapy treating the primary lesion. Intellectual property can go into the early 2030s to perhaps the 2040s based on recently filed IP.
Based on our phase II data and the alignment with the FDA in a placebo-controlled trial, BCC tends to clear very slowly, if not at all, on its own. That is why typically there is surgical intervention. So we are very excited about the opportunity for this program. One of the things we wanted to understand was how would the patients feel about this? So we conducted, with Blacklight Partners, a survey. In there we asked an interesting question for patients who either had BCC, who had skin cancer experience, but it was not BCC, or had no evidence of skin cancer previously at all. You get almost the same response when asking them would they prefer to try this injection versus have surgery. It seems rather obvious that would be the case, but it was really nice to confirm that.
Even with saying it is 50% of the chance you might have some tumor remaining after 12 weeks, they still would opt to try that for the opportunity to avoid surgery and reduce the size of their tumor burden. To wrap up, let me tell you a little bit about the data on the BCC program, because it is really important. The molecule has a dual mechanism of action. After injecting into the tumor, it causes local necrosis by disruption of the mitochondrial membrane, and it changes the local and regional immune profile.
In this case, the CD8 T cells were not present early at the time of biopsy, but at the time of post-treatment, when they removed and analyzed for any remaining tissue, you see the large increase in the green fluorescence here, indicating infiltration into the tumor bed of those immune cells that are important for the killing and elimination of the tumor. BCCs are normally immunosuppressed, so they are not there, and that is why they persist and require typically surgery. In the non-tumor region, what you see is the immune cells move out of there and into the right spot. So you are seeing a migration of the right types of cells into the parts of the tumor to address it. Likewise, the immunosuppressive cells, you see those also going in the right direction, leaving the local tumor environment and going elsewhere, so the immunosuppressive nature is not there.
You see that very consistently across Tregs, CD8 cells, et cetera, in all of these cases. So as we looked at our immunology for this study, we saw proper migration of all the immune engagement in additional to the primary tumor killing, which is important for the drug. From a financial perspective, the company has about $11 million in cash on our balance sheet as of the June 30 reporting. Revenue from last year was $15.3 million, which was 130% year-over-year growth from 2024, and we reported $9.4 million for the first half of this year to date. In our last quarterly report, we announced that we entered into a non-dilutive growth capital credit facility for up to $27.5 million, $12.5 million is already available for a drawing. We have about 17 million shares outstanding, and on a fully diluted basis, around 30 million shares.
In wrapping up, YCANTH is the only HCP administered product with proven safety and efficacy for treatment of molluscum in adult and pediatric patients age two and up. We are achieving greater brand recognition and adoption by dermatologists and pediatricians. We are excited about the potential of our pipeline with global phase III programs ongoing for common warts, in addition to the clinical evidence for molluscum contagiosum. Torii is helping us with the funding. We are splitting those costs, but they are funding the first $40 million of the study, and those trials are rapidly enrolling. One is fully enrolled, the second is 50% enrolled. We are expecting top-line data to read out in, with interesting catalysts, Q1 and mid-next year. VP-315 is a really compelling molecule to present a non-surgical alternative for treatment of basal cell carcinoma.
As you think about Verrica and the takeaway, we are a unique small-cap company that has commercial stage assets and late-stage development programs that do not require material funding in terms of the common wart off our balance sheet. We have access to capital that provides us a runway to get through those key data inflection points. If approved, we can leverage the commercial infrastructure for common warts that exists with our molluscum contagiosum commercial sales force. We own the global rights to our assets. We have established partnerships with Shionogi in Japan, Medomie in Israel, and with our pathway in Europe for registration opportunities present for partnership in Europe as well as the rest of the world. With that, thank you for your time and attention, and be happy to have any questions.
Thank you so much. Yeah, we have time for one or two questions if anyone has anything.