Verrica Pharmaceuticals at The Citizens JMP Life Sciences Conference: Strategic Developments in Dermatology

On Wednesday, 07 May 2025, Verrica Pharmaceuticals (NASDAQ:VRCA) presented at The Citizens JMP Life Sciences Conference 2025, outlining their strategic focus on dermatology medicines. The company highlighted both its financial growth and operational challenges, emphasizing the relaunch of YCANTH, its FDA-approved product for molluscum contagiosum. While the company reported significant revenue growth, it continues to navigate the complexities of expanding market penetration and cost management.

Key Takeaways

• Verrica relaunched YCANTH with a targeted strategy for dermatologists and pediatricians.
• The company is expanding into the common warts and basal cell carcinoma markets.
• Financially, Verrica holds $46 million in cash and secured $42 million in financing last year.
• Operational efficiencies led to over 12% growth in Q4 and 16% in Q1 based on applicator units.
• YCANTH showed promising clinical trial results, achieving almost 50% lesion clearance.

Financial Results

• Cash Position:

- $46 million in cash and equivalents at the end of last year.

- Access to a $40-$50 million debt facility from OrbiMed.

- Raised $42 million in November financing.

• Cost Reduction:

- Reduced costs and expenses by more than half last year.

• Revenue Growth:

- Achieved 12.3% growth in Q4 and 16.7% growth in Q1 in dispensed applicator units.

• Milestone Payment:

- Potential $8 million milestone payment expected with Phase 3 trial initiation for common warts.

Operational Updates

• Commercial Strategy:

- New strategy for YCANTH targeting dermatologists and pediatricians.

- Expanded insurance coverage, including Medicaid and a $25 max copay program.

• Distribution:

- Over half of sales now through specialty pharmacies.

- Expanding access via regional and national pharmacies and a buy-and-bill approach.

• Pipeline Development:

- Phase 3 common warts program co-funded with a Japanese partner.

- VP315, an immunotherapy for basal cell carcinoma, showing promising preliminary data.

Future Outlook

• Common Warts Program:

- Partnered with a Japanese company for Phase 3 program.

- $8 million milestone payment upon trial initiation.

• Basal Cell Carcinoma Program (VP315):

- Awaiting end-of-Phase 2 FDA meeting.

- Additional genomic and immune response data expected by mid-year.

Q&A Highlights

• Pediatrician Engagement:

- Increasing willingness to treat molluscum, supported by specialty pharmacy distribution.

• Specialty Pharmacy:

- More than half of Verrica’s business now comes through specialty pharmacies.

• Common Warts:

- No current competition in the common warts segment.

In conclusion, Verrica Pharmaceuticals continues to advance its strategic initiatives in dermatology, with promising growth and development across its product lines. For further details, refer to the full conference transcript.

Full transcript - The Citizens JMP Life Sciences Conference 2025:

Unidentified speaker, Conference Host: Go ahead. Go ahead and get started here. So thank you everybody for joining us, this afternoon at the Citizens Life Science Conference. Excited to be joined next by Verica Pharmaceuticals. Verica is a company focused on, dermatology medicines, has an approved product for Molluscum.

I’ve joined here this afternoon by Jason Reger, the CEO. So Jason, appreciate you being here and look forward to running through the story.

Jason Rieger, CEO, Verica Pharmaceuticals: Thank you so much. Appreciate being here. So thank you everyone for taking the time to learn a little more about Verica and our exciting pipeline and commercial assets. Because your clicker is not working. Do the presentation without slides.

It’s it’s a real test. Right? So Jason Rieger, CEO of Verica Pharmaceuticals. We’re a dermatology dermatological indication focused company. Our first indication is a product for molluscum contagiosum with an FDA approved product called Wycanth, commercially indicated for molluscum for children and adults age two and up.

The product launched, late, in 02/2023, and, there was a challenge in some launches and our company, rebranded last year, brought us a new management, and, relaunched a commercial strategy. Perfect. There’s the disclaimer. So, early last year and myself joined in November of last year as well. So in terms of what is Verica and what are we trying to accomplish, we’re implementing a new commercial strategy for YCANTH for the treatment of Leskin Tageosum.

It’s FDA approved, addresses a market of 6,000,000 predominantly children. There’s a US J code approved. FDA has granted NC status and Orange Book listings. We have a robust pipeline with the potential for, additional data resulting from our, phase two program, ready gearing up for phase three for, basal cell carcinoma, and as well as a partnership with a Japanese pharma for expanding our indication in common warts. Importantly, that expands our market penetration opportunity with common warts being about twenty million additional patients and VP315 for basal cell carcinoma adding about 3,600,000 patients in an addressable market.

Our commercial strategy is HCP administered products where the product is administered in the office by the clinician to treat the variety of diseases, whether it’s molluscum, whether it’s common warts, whether it is basal cell carcinoma or other indications down the road. We have a robust IP portfolio with patents on our primary indication for YCANT going from 02/1934 to 02/1941, as well as additional patents on the three fifteen program for basal cell that could go out to 02/1944. In the restructure, when we brought in an experienced management team that’s very entrepreneurial focused and focused on execution and operations. And what we’ll talk to you today a little bit about is what we’ve done to implement the changes in the program, the change in the commercialization structure, and how we’re planning to execute. From a financial position, we had cash and cash equivalents of 46,000,000 at the end of last year.

We had a debt, facility of about $40,000,000 $50,000,000 from OrbiMed. You can see the outstanding, share count as well on the on the slides. We did a financing in November of last year raising $42,000,000 in proceeds. Here’s the management team. Most of the folks here are new relative to the team that was here, last year.

Jason Reiger, John Kirby is our CFO, Noah Rosenberg, chief medical officer, and Dave Zawitz, our our chief operating officer. So what does a snapshot of Verica look like? Obviously, new management team, you know, brings in new focus. Not changing for the sake of change, but changing for the purpose of what we’re trying to accomplish and being very, focused on how do we execute on the business every minute of every day of, to make that happen. We solidify our balance sheet, so you that’s really important, especially in this in this time.

And we have capital that could get us, into next year, you know, provided some covenants are met with our debt provider. We’ve approved product with Wycanth, first FDA approved product for the treatment of loss coming patients two and older, and we have a very proven safety and efficacy record, and importantly, starting to build some brand awareness for Wycamp as a product for molluscum and the brand of conferredin. The operational efficiency is really important to emphasize. We reduced costs and expenses of the company by more than half last year when we took over. I implemented a refined sales goal.

And even in the course of doing the cost reductions and the changes in the sales model and commercial structure, we shoot we showed growth quarter over quarter for q four and q one of this year, 12% last year, and 16% growth, you know, in q one based on a number of dispensed applicators. We announced that early, earlier this month. So what are we trying to accomplish? Number one, laser focused on driving sales. We need to have a tactical sales team that focuses on calling on customers and meeting the customer needs.

We’ve added, you know, a focus on pediatricians in addition to dermatologists and other primary care practitioners to hit the patients where they’re first being seen and the first medical professional they encounter after a parent, you know, notices the bumps on their children. Pediatricians, for example, have been seeking an FDA approved product and opportunity to treat molluscum. Historically, there was nothing available to them and they often refer to the patient to either watch and wait or go see a dermatologist. Even with all the changes we’ve made, we still believe our peak addressable market, is the same is still addressable even with our reduced budget and, leader team. One of the things we did to focus on expanding the business was change the co pay assist program, focus on the insurance coverage and making sure it was a robust experience for the clinician when they wrote the script and the patient when they tried to get access to the product.

The drug is delivered either white bag to the pharma to the doctor directly via specialty pharmacy or through a buy and bill model to the clinician directly. In terms of our expansion program, I mentioned earlier, we have a common work program. The key nuance to that is our Japanese partner has agreed to co fund that program with us fifty fifty for a global program. It also results in a $8,000,000 milestone to the payment to the company upon initiation of trial. And importantly, they have agreed to fund our portion Vericus portion of the trial out of future milestones and royalties as we start the program.

So it’s a phase three expansion opportunity that should have minimal cash impact on Vericus balance sheet. And lastly, in terms of our pipeline, we have a phase three basal cell carcinoma program. BCC is the most common cancer in The United States, Three Point Six Million cases a year. VP315 is an innovative immunotherapy addressing a large market in patients who want to seek non surgical options to BCC. And we’ve completed, we’ll complete an end of phase two meeting with the FDA on v p three fifteen to understand what the phase three program would look like, and we’ll also be reporting additional genomic and immune response data on that program, in the by the middle of the middle of this year.

So what is molluscum? Molluscum is caused by a pox virus. It primarily affects children. It’s very, contagious. If left untreated, you know, it can persist for thirteen months on average and up to five years and often leads to a variety of anxieties, social challenges, and patients, you know, the patients and caregivers want to address, versus just a watch and wait, for that type of period of time.

It’s transmitted via skin to skin contact, sharing of clothing or contaminated objects like towels or toys. As we gear up for the summertime, you know, sometimes there’s an increase in the, you know, prevalence of molluscum in that period of time. Diagnosed typically ten to thirty lesions, you can see what they look like here on the slide, but you can have up to a hundred lesions. They can inoculate, they incubate for about two to three weeks, so if you scratch, they can transfer to other parts of the skin and show up two or three weeks later. That’s why it can persist for so long due to the inoculation, period.

Importantly, they can be asymptomatic, but, also can be painful at times and can be itchy. So it sort of depends on the patient and how much problems they would end up dealing with it. Importantly, you get inflammation, you get skin irritation, you get reinfection, there’s some comorbidities with other dermatologic indications. And so, in a more severe case, you can end up with things like cellulitis, etcetera. So what has been done over the last, you know, decades of time, while there wasn’t an FDA approved product?

There was the opportunity for cryotherapy. This is freezing off the lesions. You can imagine small children not wanting to have that many lesions, frozen off. Can occur anywhere on the body, so it can be painful, can result in scarring or skin discoloration. There’s curettage, which is literally cutting the lesions out, laser surgery, other topical products, off label drugs, natural remedies, but importantly, many of these have limitations.

They don’t have the pharmacovigilance or quality oversight of an FDA approved product. In fact, the FDA in 2023 published a consumer update warning patients not to accept non FDA approved products for treatment of molluscum for safety reasons. And ultimately, it’s a significantly underserved patient population. So what is the solution? Our solution is YCANT, the only commercially available FDA approved treatment for molluscum, designed to be consistent and targeted for administration.

It’s a topical use, you know, drug device combination product in an applicator, as you can see here. The active ingredient is conferredin at a formulation concentration of 0.7% with proprietary ingredients, as part of that formulation. Single use applicator, so it avoids cross contamination. Historically, this product had been treated by compounders, and compounded formulations and multi use products that could lead to cross contamination and also changes in the concentration of a product, due to the volatile solvents typically in the formulation. The small, tip of the applicator makes it very easy to apply and target lesions very carefully and quickly for any HCP in the office.

The product is shelf stable under, made manufactured by GMP for two years, allows it for reliable dosing for the patient, for the clinician when they’re treating the patient. We actually have added an oral deterrent to to, you know, deter the children from licking or biting on the lesions to both facilitate transfer, etcetera. So from a clinical data perspective, you know, ran two phase three global trial, two phase three trials. Our Japanese partner also ran two phase three trials, which saw very similar results. The FDA held us to a very high standard of complete clearance of all lesions, both that were present at the baseline and that may have reoccurred from self inoculation over the course of the study.

And as you can see, over a four week cycle of treatments, we almost 50% clearance of complete clearance for these patients. When you look at versus about fifteen percent for the placebo, and when you look on the graph on the right, you can see the reduction in total lesions. That’s the lesions that were there at baseline and also came up during the study. And you can see placebo patients, even though they some did achieve complete clearance, almost no change in the total lesion count for the placebo patients due to the self inoculation problem. And, you know, with the YCANTH product, we were down almost seventy six percent of total lesions, including both baseline and new.

Also should, you know, the one thing I should add to this also is, from a safety perspective, the adverse event reactions were local skin reactions. The product is a vesicant, so you get small blisters, which is what you expect. The majority of them were mild to moderate, and there were no serious adverse events for the for the program, the phase three program. So what are we doing for an expanded launch? Couple of things that we did to change things differently.

Expanded the target population to pediatricians in addition to dermatologists, that allows us to more adequately address the 6,000,000 target patient population, change the addressable the addressable market from insurance coverage by expanding both dual benefit medical and pharmacy, as well as robust medic medicaid coverage. We have ink it also prevents an incremental revenue opportunity for pediatricians because there is a CPT code, accompanying the product for destruction of benign lesions. So it’s both a drug device combo, but also offers the procedure reimbursement for the clinician that treats the patient. Our covered lives up to about $225,000,000 now as of first quarter. We’re expanding access to the product be both pharmacies regionally and national, as well as a buy and bill approach.

And we’ve adjusted the copay of the program where it’s $25 max amount of pocket for the patient. This is for up to two applicators for every visit as required for the treatment and eradication of the disease. Importantly, we’ve also received expanded opportunities of pediatricians and acknowledgement by the Red Book. The Red Book is sort of a guideline to the pediatric community of products and approaches to treating childhood diseases. In 2024, the Red Book reported that the most support for treating molluscum was from cryotherapy, curettage, or contheridin.

And obviously, contheridin is the active ingredient, lycanth, which is the only FDA approved approach for providing contheridin to these patients. So our current approach for the pediatric market is education and providing access and treatment to the patients. In terms of our pipeline, indicated earlier, had two pipeline key pipeline programs, common warts and basal cell carcinoma. I’ll talk about those two now. We have additional opportunities for the same molecules for external genital warts and for replantar warts.

So basal cell carcinoma, BP BP three fifteen is our active molecule. We’ve shown promising preliminary safety and efficacy data, including a ninety seven percent objective, calculated objective response rate. That indicates that nearly every patient in the trial either saw a benefit from the trial of at least thirty percent and didn’t get worse in terms of the size of their basal cell lesions. The fifty one percent of the patients treated saw complete histological clearance of their basal cell, and of those that did not completely clear those lesions, we saw an average of almost sixty seven percent, reduction in those lesions as well. So two thirds smaller if you didn’t get completely clear or you’re completely clear.

It presents an opportunity both for the patients who want to avoid surgery, but also if they need surgery, would make their job much easier for the clinician and the Mohs surgeon. We expect to have additional data for this program to report out, you know, middle of this year, as well as results from our end of phase two meeting, with minimal additional spend on behalf of the company. In terms of here’s the some of the data, as you can see, complete clearance reduction in all our different cohorts. We we evaluated both the, the dosing concentration as well as, the frequency and cadence of the dosing and ultimately settled on a likely clinical phase three, design that would have, up to about two doses of the patient, early in early in the treatment cycle. In terms of adverse events for treating basal cell carcinoma, there were no treatment related serious adverse events that were reported in the course of our study.

Most of the TRAEs were mild to moderate and they were expected cutaneous reactions, both destruction of the lesion, and, ultimately the healing of the skin after the lesion was destroyed. From a common wart perspective, we’ve run a phase two study called COVE-one. This is the pilot study that’s going to support our phase three program in The US and with our partner Tori. As you can see in the graph on the right, we achieved over fifty percent of the patients, limit, you know, complete clearance of their baseline and new common common warts in the course of the study. And a lot of that sustained for a significant period of time after the end of treatment.

It was only up to four treatments in the program. As, many are aware, there are no FDA approved treatments in US or Japan currently for common warts. The prevalence is nearly twenty two million, so it’s a very large addressable market. And we’re working with the FDA and our Japanese partner to have complete final alignment on the design of that program. And as I indicated earlier, there could be an $8,000,000 milestone, that would come to Verica on initiation of that program.

In terms of the adverse events in that program and safety profile, most of the, as I indicated earlier, most of the adverse events were application site related and expected. So in summary, what can I tell you about Verica as as the sort of parting parting thoughts to remember about the company? We have an FDA approved product for the that’s with proven safety and efficacy, the treatment of musculum in adults and pediatric patients two years and older. We’re achieving greater brand awareness and seeing real traction in our relaunch of the program. We’re implementing changes from the initial launch.

We’ve expanded distribution models. We are targeting both pediatricians as well as primary care in addition to our primary call point of dermatologists. We’ve pursued and now have a significant amount of dual benefit coverage, via medical as well as pharmacy benefit. Our focused sales team is now calling on all call points in a territory, and so they’re being much more efficient in terms of their call points and traction with clinicians. We’ve shown great sequential, quarterly growth of 12.3% in q four and sixteen point ’7 in q one for the number of dispensed applicator units that we’re seeing.

We secured $42,000,000 in capital to, you know, provide us a cash runway to get into this year. And from an opportunity perspective, as you look through, you know, companies that are small, mid cap like we are, where you said we feel it very unique because we have a commercial stage asset that’s actually launched and growing in sales and penetration with a robust, you know, target pipeline that can address large unmet needs in dermatology, and minimal need minimal need of cash to support both those programs as they advance throughout this year. With that, I’ll pause and, take any questions.

Unidentified speaker, Conference Host: Thanks Jason. Maybe I can start off here. The focus on pediatricians, what’s the feedback you’re getting in terms of a pediatrician’s willingness to treat versus just to refer to a dermatologist?

Jason Rieger, CEO, Verica Pharmaceuticals: It’s been actually a mixture of both, and I think it’s community based based on the relationships between the pediatricians, you know, whether it’s a community hospital or a larger hospital in the area, but we’ve seen a large uptick in the number of pediatricians that are actually treating, particularly as we expanded to distribution via the specialty pharmacy. They don’t typically do buy and bill, so it wasn’t what was worked for them. But now that we’ve set up the specialty pharmacy route, local, you know, regional and national pharmacies that can they can write the script, gets delivered to the office and they can treat, It’s often working very well. We’ve seen examples where the patient goes to see the pediatrician, they want to get treated, they refer to the derm, the derm says I’ll see you in three or four months. They come back and the pediatrician orders the drug, they treat them.

They might have a follow-up with the derm just to make sure everything is going alright, but they often are cleared before they can get into the dermatologist.

Unidentified speaker, Conference Host: Can you also get a benefit though of even if the pediatrician is less willing to treat, they’re aware of the product and when they send the parent over to the dermatologist they’re already, you know, pre educating them.

Jason Rieger, CEO, Verica Pharmaceuticals: And so we’ve actually seen a number of that and in some cases they send it over to the dermatologist with a diagnosis. Yep. The dermatologist either has the drug in hand or writes the script and it’s waiting for the patient when they come in for the visit. So we’re seeing and that’s one of the things that’s evolved our with the ecosystem of our sales team is because the sales team own regional and local, the whole community, they have relations with the derms, the peds, the primary care and they work through what’s the best ecosystem for that practice and referrals. What the derm be doing for you came into the next So the derm what script would they write?

So the derm wrote no script. So they would either do order a compounded product and have it have it in as office stock, which is not really what you’re supposed to do with compounded products, and treat that way. They would use liquid nitrogen. They would do other things or also tell folks to watch and wait. But a lot of times it was using this active molecule in a compounded form.

And we’re seeing now that there’s an FDA approved product that it’s shifting to the use of YCAM. Importantly, they still get to charge their destruction code for the procedure, and for administering the product. It also, you know, as for the pediatrician, that’s an opportunity didn’t exist for them before. So rather than referral, they can help the patient treat them sooner and generate additional revenue for the pediatric office.

Unidentified speaker, Conference Host: And then on those two components of I guess distribution and reimbursement, how far along are you in terms of getting into specialty pharmacy and getting coverage both from the pharmacy and the medical perspective?

Jason Rieger, CEO, Verica Pharmaceuticals: I would say you more than half our business is now through the specialty pharmacy so it’s a very robust part, it’s state and or community and plan dependent. So one of the things our sales team has done a really good job at is going to the office, understand what type of insurance plans they’re seeing, what kind of patient flow they see, whether Medicaid, whether commercial, etc. And then provide the right solution that meets their need. I think that’s really started to resonate in terms of our uptick in volume.

Unidentified speaker, Conference Host: And I guess just looking forward when you think about the know the common warts indication specifically is that more of an adult indication Or I guess where, I guess ultimately, where is the commercial overlap or the awareness and education overlap?

Jason Rieger, CEO, Verica Pharmaceuticals: It’s going to be the same. So the same call points, it’s going be primary care, going be pediatrician, it’s going be dermatologists who are already, who do treat a lot of these. So as we build these relationships and ultimately if we get the additional indication expand on the label, it should be plug and play for all of our existing relationships for how they order the product, how they acquire the product, and how they would ultimately address their patient needs. Fantastic. Competition on the common warts side?

No. So the common warts, you know, is liquid nitrogen or curettage, so same problems. So as you think about the opportunity here, you know, it’s a robust opportunity. You know, you don’t need a very large penetration to a market of this size, to achieve some real traction, and we’re providing a real benefit for these patients. The compounded product really, you know, it shows that it gave support that the molecule works, but because the formulation changes over time, and the extent of the vesicant activity of the blister and robustness of it, both speed and size, is proportional to the concentration.

If you’re in a multi use bottle that changes concentration over time. It becomes more of an art to treatment, makes it very difficult to how do you tell a patient wash it off after this amount of time, treat this number of lesions, how robust the response could be. Our product is very consistent in formulation. It’s in a glass ampoule and contained within that applicator. So you break the ampoule and the concentration is the same every time from day one to twenty four months later.

Unidentified speaker, Conference Host: So I got to imagine there’s still physicians out there though that are comfortable with the compounded products so what proportion of the prescribing population would you say fits into that bucket versus understand the need to move away

Jason Rieger, CEO, Verica Pharmaceuticals: I would say when we started and there was very poor insurance coverage they were more resistant to change and we’re seeing that shift as it progresses. It also changes their liability you know and other activities for a clinician. When there’s an FDA approved product and you’re and you don’t have a real reason not to it becomes more of a problem. I think also we’re seeing more adoption with younger clinicians as well, as they’re as they’re more open sometimes to try new things. But we have great endorsement by KOLs, you know, leading KOLs both in pediatrics, dermatology, and elsewhere that have been endorsed the product in support of it.

Unidentified speaker, Conference Host: Alright, Jason, thank you very much. Appreciate you being with us.

Jason Rieger, CEO, Verica Pharmaceuticals: Thank you.

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