Verrica Pharmaceuticals Inc. Q4 FY2024 earnings call

• Implemented a new commercialization strategy for YCANTH, reducing operating expense burn rate by ~50% while maintaining sales levels and achieving 12.3% sequential growth in YCANTH dispense applicator units in Q4 2024.
• Introduced a new single applicator configuration for YCANTH (one count) to reduce acquisition costs and expand access. Increased pharmacy benefit route access by adding local specialty pharmacies to Nufactor's network.
• Progressed YCANTH for common warts: Torri filed a new drug application in Japan for TO-208 (YCANTH), and Verrica and Torri will split costs for a Phase 3 clinical program in common warts.
• VP-315 showed positive preliminary results in basal cell carcinoma: ~51% of tumors treated achieved complete histological clearance, and a post hoc analysis showed a 97% objective response rate. A Phase 3 trial advancement depends on regulatory feedback.
• Raised ~$42 million in an equity follow-on offering in November 2024 and obtained a waiver of going concern covenant from OrbiMed.

In the fourth quarter of 2024, YCANTH dispense applicator units were 8,654, a sequential increase of 12.3% from the prior quarter's 7,706 units. Compared to Q2 2024 (5,975 units), YCANTH applicator unit growth was 44.8%. For the full year 2024, total revenue was $7.6 million, with net product revenue at $6.6 million. YCANTH contributed substantially to the revenue, with collaboration revenue in Q4 2024 at $29,000 and $1 million for the full year 2024.

• Management stated they will not provide revenue guidance currently and will leave guidance as analysts have set it so far. They will provide updates as momentum in the year builds and clarity increases.

• Forward-looking statements involve inherent risks and uncertainties, and actual results could differ materially from expectations. Dependence on receiving the $8 million milestone payment from Torri or proceeds from Series A warrant exercise for funding operations.

Q: Could you comment on patient demand, YCANTH adoption, early 2025 YCANTH adoption, and sales expectations for 2025?

A: Seeing good adoption of YCANTH for molluscum, growth in pediatric market. 2025 momentum continues with early traction ahead of schedule. Currently, no revenue guidance provided, policy is to not offer revenue guidance at this point.

Q: Thoughts on seasonal tailwinds/headwinds and IP protection for YCANTH?

A: Prepared for seasonality, optimistic about spring/summer potential. YCANTH has a robust IP portfolio, with generics being a long way off, and working through compounder challenges.

Q: Impact on YCANTH usage in pediatric setting and VP-315 Phase 3 timing?

A: Growth in pediatric market, mix of dermatologists and pediatricians treating. For VP-315, remaining data collection is de minimis in cost; will evaluate program with FDA feedback to determine Phase 3 timing.

Q: What's needed to achieve hockey stick improvement in demand?

A: Requires acquisition of new customers and continued utilization/growth of existing customers. Active sales reps, reimbursement support, expanded access through telesales, and advancing into larger markets with larger practices and pharma partners.