Q4 2025 Verrica Pharmaceuticals Inc Earnings Call

March 11, 2026

Speaker #3: Please stand by. Your meeting is about to begin. Good morning, ladies and gentlemen, and welcome to the Verrica Pharmaceuticals fourth quarter and year-end 2025 corporate update conference call.

Operator: Good morning, ladies and gentlemen, and welcome to the Verrica Pharmaceuticals Fourth Quarter and Year-End 2025 Corporate Update Conference Call. At this time, all participants are in a listen-only mode. After the speaker's remarks, there will be a question and answer session. As a reminder, this conference is being recorded. I will now turn the call over to our host, Kevin Gardner of LifeSci Advisors. You may begin your conference.

Speaker #3: At this time, all participants are in a listen-only mode. After the speaker's remarks, there will be a question-and-answer session. As a reminder, this conference is being recorded.

Speaker #3: I will now turn the call over to our host, Kevin Gardner of LifePsy Advisors. You may begin your conference.

Kevin Gardner: Thank you, operator. Hello, everyone, and welcome to Verrica Pharmaceuticals Fourth Quarter and Year-End 2025 Corporate Update Conference Call. With me on the line this morning are Jayson Rieger, President and Chief Executive Officer, Noah Rosenberg, Chief Medical Officer, John Kirby, Interim Chief Financial Officer, David Zawitz, Chief Operating Officer, and Chris Chapman, Chief Commercial Officer. As a reminder, during today's call, management will make forward-looking statements. These forward-looking statements are based on the company's current expectations and involve inherent risks and uncertainties. Verrica's actual results and the timing of events could differ materially from those anticipated in such forward-looking statements. Please see Verrica's SEC filings for important risk factors. Verrica cautions you not to place undue reliance on forward-looking statements and undertakes no duty or obligation to update any forward-looking statements as a result of new information, future events, or changes in expectations.

Speaker #4: Thank you, Operator. Hello, everyone, and welcome to Verrica Pharmaceuticals fourth quarter and year-end 2025 corporate update conference call. With me on the line this morning are Jayson Rieger, President and Chief Executive Officer; Noah Rosenberg, Chief Medical Officer; John Kirby, Interim Chief Financial Officer; David Zawitz, Chief Operating Officer; and Chris Chapman, Chief Commercial Officer.

Speaker #4: As a reminder, during today's call, management will make forward-looking statements. These forward-looking statements are based on the company's current expectations and involve inherent risks and uncertainties.

Speaker #4: Verrica's actual results and the timing of events could differ materially from those anticipated in such forward-looking statements. Please see Verrica's SEC filings for important risk factors.

Speaker #4: Verrica cautions you not to place undue reliance on forward-looking statements and undertakes no duty or obligation to update any forward-looking statements as a result of new information, future events, or changes in expectations.

Kevin Gardner: In addition, during today's call, management will discuss certain non-GAAP financial measures. These non-GAAP financial measures are in addition to, and not a substitute for or superior to, measures of financial performance prepared in accordance with GAAP. There are a number of limitations related to the use of these non-GAAP financial measures compared to their closest GAAP equivalents. The earnings release that the company issued today includes GAAP to non-GAAP reconciliations for these measures and is also available on the investor relations section of Verrica's website. I'll now turn the call over to Verrica's President and CEO, Jayson Rieger.

Speaker #4: In addition, during today's call, management will discuss certain non-GAAP financial measures. These non-GAAP financial measures are in addition to and not a substitute for or superior to measures of financial performance prepared in accordance with GAAP.

Speaker #4: There are a number of limitations related to the use of these non-GAAP financial measures, compared to their closest GAAP equivalents. The earnings release that the company issued today includes GAAP-to-non-GAAP reconciliations for these measures, and is also available on the investor relations section of Verrica's website.

Speaker #4: I'll now turn the call over to Verrica's President and CEO, Jayson Rieger.

Jayson Rieger: Thank you, Kevin. Good morning, everyone, and thank you for joining us on our Q4 and year-end 2025 Corporate Update Call. Based on achieving multiple commercial, clinical, and financial initiatives, we believe 2025 will be remembered as the year Verrica was able to fundamentally transform its business, setting a solid foundation for the future and supporting the delivery of long-term value creation for its shareholders. We started 2025 by stabilizing our commercial organization, ultimately more than doubling revenue from the core YCANTH business for molluscum, while dramatically cutting costs from the previous year. We also realized very meaningful advances in our efforts to expand our product portfolio with progress towards a second product, VP-315, into a new indication for YCANTH, common warts, and into new markets, including Europe.

Speaker #5: Thank you, Kevin. Good morning, everyone, and thank you for joining us on our fourth quarter and year-end 2025 corporate update call. Based on achieving multiple commercial, clinical, and financial initiatives, we believe 2025 will be remembered as the year Verrica was able to fundamentally transform its business.

Speaker #5: Setting a solid foundation for the future and supporting the delivery of long-term value creation for its shareholders. We started 2025 by stabilizing our commercial organization, ultimately more than doubling revenue from the core YCAMP business from Alaskan, while dramatically cutting costs from the previous year.

Speaker #5: We also realized very meaningful advances in our efforts to expand our product portfolio, with progress towards a second product, BP315, into a new indication for YCAMP, Common Warts, and into new markets, including Europe.

Jayson Rieger: Now, we are a completely different company than we were as we entered 2025, and I couldn't be more excited about the future that lies ahead. First and foremost, in 2025, we implemented a more optimized commercial strategy with the goal of establishing YCANTH as a new standard of care for the treatment of molluscum contagiosum. As a result, we were able to grow YCANTH revenue by more than 130% compared to 2024, while at the same time reducing our selling, general, and administrative expenses by over 40% from the same period. These results reflect the hard work and dedication of our team, disciplined cost management, and the progress we continue to make in building solid relationships with physicians, payers, and our distribution partners.

Speaker #5: Now, we are a completely different company than we were as we entered 2025, and I couldn't be more excited about the future that lies ahead.

Speaker #5: First and foremost, in 2025, we implemented a more optimized commercial strategy, with the goal of establishing YCAMP as a new standard of care for the treatment of molluscum contagiosum.

Speaker #5: As a result, we were able to grow YCAMP's revenue by more than 130% compared to 2024, while at the same time reducing our selling, general, and administrative expenses by over 40% from the same period.

Speaker #5: These results reflect the hard work and dedication of our team disciplined cost management and the progress we continue to make in building solid relationships with physicians, payers, and our distribution partners.

Jayson Rieger: We also made important progress in our pipeline, advancing both our common warts and basal cell carcinoma programs. We launched the global Phase 3 program study for YCANTH for common warts with our Japanese development partner, Torii Pharmaceutical, after negotiating an amended collaboration and license agreement with them. Under this arrangement, we received $18 million in milestone payments in Q3 2025, and Torii will remit the first $40 million in program costs, representing approximately 90% of the current budget. We will offset future milestones and royalty payments owed to us towards our share of the 50/50 split. We dosed the first patient in common warts program in December and look forward to initiating the second Phase 3 study in the US and Japan with Torii over the coming months.

Speaker #5: We also made important progress in our pipeline, advancing both our Common Warts and Basal Cell Carcinoma programs. We launched the Global Phase 3 program study for YCAMP for Common Warts, with our Japanese development partner, Tori Pharmaceutical, after negotiating and amended collaboration and license agreement with them.

Speaker #5: Under this arrangement, we received $18 million of milestone payments in the third quarter of 2025, and Tori will remit the first $40 million of program costs representing approximately 90% of the current budget.

Speaker #5: We will offset future milestones and royalty payments owed to us towards our share of the 50/50 split. We dosed the first patient in Common Warts program in December and look forward to initiating the second phase 3 study in the US and Japan with Tori over the coming months.

Jayson Rieger: We believe our oncolytic peptide asset, VP315, represents one of the most promising opportunities in dermatology, and we substantially reduced the cost and time of a Phase 3 program in basal cell carcinoma by aligning with the FDA on a streamlined design of study last year. We believe each of these advanced programs could represent significant value drivers for our company, and we are tremendously excited about these future potential products. Importantly, we have strengthened our financial position. In addition to the $18 million in non-dilutive funding from Torii, we executed a $50 million equity raise in November and the subsequent retirement of our outstanding debt. We also should note Torii's launch of YCANTH in Japan in February after receiving approval last year from PMDA.

Speaker #5: We believe our oncolytic peptide asset, VP315, represents one of the most promising opportunities in dermatology, and we substantially reduced the cost and time of a phase 3 program in basal cell carcinoma by aligning with the FDA on a streamlined design of study last year.

Speaker #5: We believe each of these advanced programs could represent significant value drivers for our company and we are tremendously excited about the future potential products.

Speaker #5: Importantly, we have strengthened our financial position. In addition to the $18 million in non-dilutive funding from Tori, we executed a $50 million equity raise in November and the subsequent retirement of our outstanding debt.

Speaker #5: We also should note Tori's launch of YCAMP in Japan in February after receiving approval last year from PMDA. Verica continues to work closely with Tori now part of Shinogi, to support this commercial effort as we view Japan as the first of many additional countries where doctors will be able to treat their molluscum patients with YCAMP.

Jayson Rieger: Verrica continues to work closely with Torii, now part of Shionogi, to support this commercial effort as we view Japan as the first of many additional countries where doctors will be able to treat their molluscum patients with YCANTH. Together, these achievements demonstrate the potential value of our assets. One growing commercial program with the opportunity for future global market expansion and two phase 3 development programs in large indications. These assets not only position us for a successful 2026, but also serve as the foundation for Verrica's long-term strategy. I'll first provide an update on our YCANTH commercial business and then review the progress of our clinical stage programs in common warts and basal cell carcinoma. I'll then turn the call over to John, who will review our Q4 and full year 2025 financial performance.

Speaker #5: Together, these achievements demonstrate the potential value of our assets, one growing commercial program with the opportunity for future global market expansion, and two phase 3 development programs in large indications.

Speaker #5: These assets not only position us for a successful 2026, but also serve as the foundation for Verrica's long-term strategy. I'll first provide an update on our YCAMP commercial business and then review the progress of our clinical-stage programs in common warts and basal cell carcinoma.

Speaker #5: I'll then turn the call over to John, who will review our fourth quarter and full year 2025 financial performance. First, with respect to a commercial update on YCAMP for molluscum.

Jayson Rieger: First, with respect to commercial update on YCANTH for molluscum. As a reminder, we have made purposeful investments in our co-pay assistance program to provide comfort to healthcare providers that their patients will be able to afford treatment with YCANTH, and this broad access to YCANTH has impacted gross to net estimates over the past year. In Q4 2025, we grew YCANTH revenue to $3.7 million, up 3.2% from Q3, while we continue to maintain demand-driven purchases from our customers. Over the entire year, net YCANTH revenue grew over 130% relative to 2024. I am pleased to report that for the fourth consecutive quarter, YCANTH inventories remain at normalized levels with YCANTH applicator units shipped to distributors continuing to closely track underlying dispensed applicator unit demand.

Speaker #5: As a reminder, we have made purposeful investments in our co-pay assistance program to provide comfort to healthcare providers that their patients will be able to afford treatment with YCAMP, and this broad access to YCAMP has impacted gross-to-net estimates over the past year.

Speaker #5: In the fourth quarter of 2025, we grew YCAMP revenue to $3.7 million, up 3.2% from the third quarter, while we continue to maintain demand-driven purchases from our customers.

Speaker #5: Over the entire year, net YCAMP revenue grew over 130% relative to 2024. I am pleased to report that for the fourth consecutive quarter, YCAMP's inventories remain at normalized levels, with YCAMP applicator units shipped to distributors continuing to closely track underlying dispensed applicator unit demand.

Jayson Rieger: In Q4, YCANTH dispensed applicator units grew to 13,654, a 58% increase from Q4 of 2024. When comparing Q4 to Q3 of 2025, YCANTH dispensed applicator units decreased approximately 3%. In Q1 of 2026, while January was likely impacted somewhat by significant winter weather across the East Coast, dispensed applicator units per selling day in February rebounded, reaching a record monthly high since launch. Overall, I've been very pleased by the significant traction driven by our commercial team so far in Q1. For the full year 2025, YCANTH dispensed applicator units totaled 51,196 versus 25,773 units for 2024, representing growth of 99% on a year-over-year basis.

Speaker #5: In Q4, YCAMP dispensed applicator units grew to $13,654, a 58% increase from the fourth quarter of 2024. When comparing the fourth quarter to the third quarter of 2025, YCAMP dispensed applicator units decreased approximately 3%.

Speaker #5: In the first quarter of 2026, while January was likely impacted somewhat by significant winter weather across the East Coast, dispensed applicator units per selling day in February rebounded, reaching a record monthly high since launch.

Speaker #5: Overall, I have been very pleased by the significant traction driven by our commercial team so far in Q1. For the full year 2025, YCAMP dispensed applicator units totaled 51,196 versus 25,773 units for 2024.

Speaker #5: Representing growth of 99% on a year-over-year basis. Our strong annual growth reflects the full impact of our new commercial strategy. In addition to expanding YCAMP's distribution through the pharmacy channel, we have continued to build strong relationships with dermatology pediatric and primary care offices enabling us to steadily build YCAMP brand awareness and drive repeat utilization in high-volume practices.

Jayson Rieger: Our strong annual growth reflects the full impact of our new commercial strategy. In addition to expanding YCANTH distribution through the pharmacy channel, we have continued to build strong relationships with dermatology, pediatric, and primary care offices, enabling us to steadily build YCANTH brand awareness and drive repeat utilization in high-volume practices. At the same time, we continue to build some solid relationships with many larger practices and hospital systems. We believe this strategy will help drive long-term utilization for YCANTH as these foundational HCP relationships will already be established if we are successful in expanding the label for YCANTH to common warts. In Q4, we continued to prioritize affordable access to YCANTH for patients. As such, we continue to pursue additional and expanded coverage and have achieved coverage wins in 2025 and 2026.

Speaker #5: At the same time, we continue to build some solid relationships with many larger practices and hospital systems. We believe this strategy will help drive long-term utilization for YCAMP, as these foundational HCP relationships will already be established if we are successful in expanding the label for YCAMP to common warts.

Speaker #5: In the fourth quarter, we continue to prioritize affordable access to YCAMP for patients. As such, we continue to pursue additional and expanded coverage and have achieved coverage wins in 2025 and 2026.

Jayson Rieger: Furthermore, as we previously announced, during Q4, we launched YcanthRx, our new non-dispensing pharmacy that gives prescribers a single place to write all YCANTH prescriptions. In addition to existing paths to access YCANTH, with YcanthRx now in place, YCANTH prescriptions can be efficiently routed through dispensing pharmacy in our network that is contracted with the patient's insurance plan. Collectively, as these efforts come together, we hope to observe a positive impact on gross to net throughout 2026. Operationally, we made new additions to our commercial leadership and field teams in Q4 and continued those efforts earlier this year, adding Chris Chapman to our team as our new Chief Commercial Officer.

Speaker #5: Furthermore, as we previously announced during the fourth quarter, we launched YCAMP Rx, our new non-dispensing pharmacy that gives prescribers a single place to write all YCAMP prescriptions.

Speaker #5: In addition to existing paths to access YCAMP, with YCAMP RX now in place, YCAMP prescriptions can be efficiently routed to a dispensing pharmacy in our network that is contracted with the patient's insurance plan.

Speaker #5: Collectively, as these efforts come together, we hope to observe a positive impact on gross-to-net throughout 2026. Operationally, we made new additions to our commercial leadership and field teams in the fourth quarter and continued those efforts earlier this year.

Speaker #5: Adding Chris Chapman to our team as our new Chief Commercial Officer. The gradual expansion of our sales force, which began in the second half of last year, has also continued.

Jayson Rieger: The gradual expansion of our sales force, which began in the second half of last year, has also continued, and we still expect to reach a total of approximately 50 reps in 2026. During 2025, we made significant progress in our efforts to bring YCANTH to the European Union. In October, we announced that the Committee for Medicinal Products for Human Use, CHMP, of the European Medicines Agency, provided positive feedback that supports the filing of a Marketing Authorization Application for YCANTH as a treatment for molluscum. More specifically, the CHMP concluded that based on convincing efficacy data from the well-controlled phase 3 studies successfully conducted in both the US and Japan, no further phase 3 clinical studies would be needed to progress towards a filing for approval.

Speaker #5: And we still expect to reach a total of approximately 50 reps in 2026. During 2025, we made significant progress in our efforts to bring YCAMP to the European Union.

Speaker #5: In October, we announced that the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency provided positive feedback to support the filing of a marketing authorization application for YCAMP as a treatment for molluscum.

Speaker #5: More specifically, the CHMP concluded that, based on convincing efficacy data from the well-controlled Phase 3 studies successfully conducted in both the U.S. and Japan, no further Phase 3 clinical studies would be needed to progress toward the filing for approval.

Jayson Rieger: Europe represents a large potential opportunity for YCANTH with millions of molluscum patients, and the feedback from CHMP provides us with added confidence to consider multiple strategic opportunities for realizing the full commercial potential of YCANTH in this large and underserved market. Our development teams continue to work through the required steps for submission in the EU, which may occur within the next 12 months and catalyze opportunities to secure commercialization partnerships in that region. I'll now provide an update on our common warts and basal cell clinical programs. For common warts, we previously announced that dosing of the first patient during December 2025 in the global phase 3 trial evaluating YCANTH for common warts, which represents an important clinical milestone for our label expansion strategy of YCANTH.

Speaker #5: Europe represents a large potential opportunity for YCAMP, with millions of molluscum patients and the feedback from CHMP provides us with added confidence to consider multiple strategic opportunities for realizing the full commercial potential of YCAMP in its large and underserved market.

Speaker #5: Our development teams continue to work through the required steps for submission in the EU, which may occur within the next 12 months, and catalyze opportunities to secure commercialization partnerships in that region.

Speaker #5: I'll now provide an update on our Common Warts and basal cell clinical programs. For Common Warts, we previously announced that dosing of the first patient during December of 2025 in the global phase three trial evaluating YCAMP for Common Warts which represents an important clinical milestone for our label expansion strategy of YCAMP.

Jayson Rieger: As a reminder, we observed clinically meaningful activity for the primary endpoint of complete clearance in the Phase 2 COVE-1 study. If successful in Phase 3 studies, we believe YCANTH has the potential to become the first therapy ever approved in both the United States and Japan for the treatment of common warts, a condition that impacts over 22 million people in the US alone. As you will recall, we are running this Phase 3 program with our Japanese partner, Torii, now part of Shionogi, with whom we will split the cost 50/50, with Torii funding the first $40 million of clinical trial costs, representing approximately 90% of the current trial budget, and we will pay the portion out of our future milestones and royalties for YCANTH in Japan. Importantly, Verrica retains full commercial rights for all potential YCANTH indications outside of Japan.

Speaker #5: As a reminder, we observed clinically meaningful activity for the primary endpoint of complete clearance in the Phase 2 COV1 study. If successful in Phase 3 studies, we believe YCAMP has the potential to become the first therapy ever approved in both the United States and Japan for the treatment of common warts.

Speaker #5: A condition that impacts over 22 million people in the US alone. As you will recall, we are running this phase three program with our Japanese partner TORI, now part of Shinogi, with whom we will split the cost 50/50 with TORI funding the first 40 million of clinical trial costs.

Speaker #5: Representing approximately 90% of the current trial budget, and we will repay the portion out of our future milestones and royalties for YCAMP in Japan.

Speaker #5: Importantly, Verrica retains full commercial rights for all potential YCAMP indications outside of Japan. We believe securing an indication for common warts represents a substantial enhancement to the commercial and licensing opportunity for our company.

Jayson Rieger: We believe securing an indication for common warts represents a substantial enhancement to the commercial and licensing opportunity for our company, and we expect to provide a more granular update on key timelines and milestones for the common wart program later this year. I will now provide an update on our basal cell carcinoma program. We continue to make progress advancing our novel oncolytic peptide VP-315, which is being developed for the treatment of basal cell carcinoma. As a reminder, last November, we presented new VP-315 data from our phase 2 study at the Society for Immunotherapy of Cancer 40th annual SITC presentation, which showed that VP-315 induced a robust local immune response with both cell-mediated and humoral components, effectively shifting the tumor microenvironment from an immunosuppressive to an antitumor state.

Speaker #5: And we expect to provide a more granular update on key timelines and milestones for the Common Wart program later this year. I will now provide an update on our basal cell carcinoma program.

Speaker #5: We continue to make progress advancing our novel oncolytic peptide VP315, which is being developed for the treatment of basal cell carcinoma. As a reminder, last November, we presented new VP315 data from our phase two study at the Society for Immunotherapy of Cancer.

Speaker #5: 40th annual SITC presentation, which showed that VP315 induced a robust local immune response with both cell-mediated and humoral components effectively shifting the tumor microenvironment from an immunosuppressive to an anti-tumor state.

Jayson Rieger: Additional data regarding the histologic assessment in non-injected lesions that suggests a potential abscopal-like effect. These data help explain why VP-315 shrinks treated basal cell carcinomas in many patients, as evidenced by a 97% objective response rate and an 86% reduction in overall tumor size. Since that presentation, there has been a growing interest in this program across a broad audience. We believe this reflects the high response rates observed in the study and the potential for VP-315 to change the paradigm for basal cell, particularly for patients wishing to avoid or reduce their surgical burden and recovery. Our enthusiasm is further supported by the suggested potential for less scarring and improved compliance versus other therapeutic options such as surgery, and topicals, as either a primary or neoadjuvant treatment for superficial and nodular tumors.

Speaker #5: And additional data regarding the histologic assessment in non-injected lesions that suggests a potential of scopolike effect. These data help explain why VP315 shrinks treated basal cell carcinomas in many patients as evidenced by a 97% objective response rate in an 86% reduction in overall tumor size.

Speaker #5: Since that presentation, there has been a growing interest in this program across a broad audience, and we believe this reflects the high response rates observed in the study and the potential for VP315 to change the paradigm for basal cell, particularly for patients wishing to avoid or reduce their surgical burden and recovery.

Speaker #5: Our enthusiasm is further supported by the suggested potential for less scarring and improved compliance versus other therapeutic options such as surgery and topicals. As either a primary or neoadjuvant treatment for superficial and nodular tumors.

Jayson Rieger: We've also continued to evaluate the abscopal response in 14 observed but not treated lesions in the phase 2 study and are excited to report that 3 out of the 14 lesions had complete histological clearance, 21% of the total number of lesions, and that there was a 67% overall reduction in tumor size across all 14 lesions. If this overall product profile could be demonstrated in pivotal phase 3 testing, we believe VP-315 has the potential to emerge as a non-surgical immunotherapy for treatment of basal cell carcinoma and other skin cancers. As noted on our Q3 earnings call, Verrica has gained alignment with the FDA on an efficient phase 3 study design for VP-315. This includes two phase 3 studies of approximately 100 subjects each in placebo-controlled studies with a primary endpoint of complete clearance at week 14.

Speaker #5: We've also continued to evaluate the obscope response in 14 observed but not treated lesions in the phase two study and are excited to report that three out of the 14 lesions had complete histological clearance, 21% of the total number of lesions, and that there was a 67% overall reduction in tumor size across all 14 lesions.

Speaker #5: If this overall product profile could be demonstrated in pivotal phase three testing, we believe VP315 has the potential to emerge as a non-surgical immunotherapy for the treatment of basal cell carcinoma and other skin cancers.

Speaker #5: As noted on our third quarter earnings call, Verrica has gained alignment with the FDA on an efficient Phase 3 study design for VP315. This includes two Phase 3 studies of approximately 100 subjects each in placebo-controlled studies for the primary endpoint of complete clearance at week 14.

Jayson Rieger: Additional long-term follow-up studies will be deferred to post-approval commitments. We are actively assessing a variety of funding opportunities for this program and have initiated clinical and CMC activities to proactively prepare for the commencement of phase 3 clinical trials. We expect to provide a more detailed plan on the program later this year. Before turning the call over to John to review our financials, I would first like to briefly touch on the impact of our recent equity raise in Q4. On 24 November, we announced a $50 million PIPE, which enabled us to retire our outstanding debt while also extending our cash runway into 2027.

Speaker #5: Additional long-term follow-up studies will be deferred to post-approval commitments. We are actively assessing a variety of funding opportunities for this program and have initiated clinical and CMC activities to proactively prepare for the commencement of phase three clinical trials.

Speaker #5: We expect to provide a more detailed plan on the program later this year. Before turning the call over to John to review our financials, I would first like to briefly touch on the impact of our recent equity raise in the fourth quarter.

Speaker #5: On November 24th, we announced a $50 million PIPE, which enabled us to retire our outstanding debt while also extending our cash runway into 2027.

Jayson Rieger: I would like to thank our existing and new shareholders for their support, which has enabled us to continue execution of our YCANTH commercialization strategy, support the global phase 3 program for common warts, and continue preparation activities for the phase 3 clinical program for VP-315, while we also explore non-dilutive development and commercialization opportunities for VP-315 globally, as well as for YCANTH outside the United States and Japan. I'll now turn the call over to our Interim Chief Financial Officer, John Kirby, to review our Q4 and full year 2025 financials.

Speaker #5: I would like to thank our existing and new shareholders for their support, which has enabled us to continue execution of our YCAMP commercialization strategy, support the global phase three program for Common Warts, and continue preparation activities for the phase three clinical program for VP315.

Speaker #5: While we also explore non-dilutive development and commercialization opportunities for VP315 globally, as well as for YCAMP outside the United States and Japan. I'll now turn the call over to our Interim Chief Financial Officer, John Kirby, to review our fourth quarter and full year 2025 financials.

John Kirby: Thanks, Jayson, and good morning, everyone. I'll now take a few minutes to summarize our financial results for the Q4 and year ended December 31, 2025. For the Q4 2025, we reported total revenue of $5.1 million compared to total revenue of $0.3 million in the Q4 2024. Total revenue for the Q4 2025 primarily consists of net YCANTH revenue of $3.7 million and $1.4 million of Torii collaboration revenue, compared to $0.3 million of net YCANTH revenue in the Q4 2024. Net YCANTH revenue reflects shipments to our distribution partners, offset by standard gross to net adjustments, including actual or anticipated product returns, off-invoice discounts, distribution fees, rebates, and co-pay assistance program costs.

Speaker #2: Thanks, Jason. And good morning, everyone. I'll now take a few minutes to summarize our financial results for the fourth quarter and year ended December 31, 2025.

Speaker #2: For the fourth quarter of 2025, we reported total revenue of $5.1 million, compared to total revenue of $0.3 million in the fourth quarter of 2024.

Speaker #2: Total revenue for the fourth quarter of 2025 primarily consists of net YCAMP revenue of $3.7 million, and $1.4 million of TORI collaboration revenue. Compared to $0.3 million of net YCAMP revenue in the fourth quarter of 2024.

Speaker #2: Net YCAMP revenue reflects shipments to our distribution partners, offset by standard gross-to-net adjustments, including actual or anticipated product returns, off-invoice discounts, distribution fees, rebates, and copay assistance program costs.

John Kirby: For the full year 2025, we reported total revenue of $35.6 million versus $7.6 million in the prior year, representing growth of 368% on a year-over-year basis. Total revenue for 2025 consists primarily of net YCANTH revenue of $15.3 million and $20.3 million of Torii milestone and collaboration revenue versus net YCANTH revenue of $6.6 million and $1 million of Torii milestone and collaboration revenue in the prior year. Gross product margins for the full year 2025 were 85.7% compared to gross product margins of 71.8% for the prior year.

Speaker #2: For the full year 2025, we reported total revenue of $35.6 million, versus $7.6 million in the prior year, representing growth of 368% on a year-over-year basis.

Speaker #2: Total revenue for 2025 consists primarily of net YCAMP revenue of $15.3 million, and $20.3 million of TORI milestone and collaboration revenue, versus net YCAMP revenue of $6.6 million, and $1 million of TORI milestone and collaboration revenue in the prior year.

Speaker #2: Gross product margins for the full year 2025 were $85.7%, compared to gross product margins of $71.8% for the prior year. Cost of product revenue for the full year 2025 was $2.2 million, versus $1.9 million for the prior year, which included $0.9 million of obsolete inventory costs.

John Kirby: Cost of product revenue for the full year 2025 was $2.2 million versus $1.9 million for the prior year, which included $0.9 million of obsolete inventory costs. Gross product margins for Q4 2025 were 81.9%. In Q4 2024, cost of product revenue exceeded revenue due to nominal sales, and the write-off of obsolete inventory. Cost of product revenue for Q4 2025 was $0.7 million versus $0.6 million for Q4 2024. Research and development expenses of $2.5 million in Q4 2025 increased by $1.5 million, excluding the impact of stock-based compensation.

Speaker #2: Gross product margins for the fourth quarter of 2025 were 81.9%. In the fourth quarter of 2024, cost of product revenue exceeded revenue due to nominal sales and the write-off of obsolete inventory.

Speaker #2: Cost of product revenue for the fourth quarter of 2025 was $0.7 million, versus $0.6 million for the fourth quarter of 2024. Research and development expenses of $2.5 million in the fourth quarter of 2025 increased by $1.5 million, excluding the impact of stock-based compensation.

John Kirby: The increase was primarily attributable to costs associated with the phase 3 program for common warts and compensation. For the full year 2025, research and development expenses were $8.9 million, which decreased by $2.1 million over the prior year period. When excluding the impact of stock-based compensation, the decrease was primarily attributable to decreased clinical costs for VP-315. Selling, general, and administrative expenses of $8.1 million in Q4 2025 decreased compared to Q4 2024 by $1.8 million, excluding the impact of stock-based compensation, driven primarily by the implementation of our more focused commercial strategy for YCANTH.

Speaker #2: The increase was primarily attributable to cost associated with the phase three program for Common Warts, and compensation. For the full year 2025, research and development expenses were $8.9 million, which decreased by $2.1 million, over the prior year period, when excluding the impact of stock-based compensation.

Speaker #2: The decrease was primarily attributable to decreased clinical costs for VP315. Selling general and administrative expenses of $8.1 million, in the fourth quarter of 2025, decreased compared to the fourth quarter of 2024 by $1.8 million.

Speaker #2: Excluding the impact of stock-based compensation, driven primarily by the implementation of our more focused commercial strategy for YCAMP. For the full year 2025, selling general and administrative expenses of $35.2 million, decreased compared to the prior year, by $20.6 million, excluding the impact of stock-based compensation, driven primarily by the implementation of our more focused commercial strategy for YCAMP, including decreases in compensation benefits and travel, due to the reduced sales force of $6.9 million, decreased commercial costs of $6.6 million, decreased compensation of $2.7 million, related to the termination of non-sales employees, decreased travel and fleet costs of $2 million, and decreased legal and administrative costs of $2.3 million.

John Kirby: For the full year 2025, selling, general and administrative expenses of $35.2 million decreased compared to the prior year by $20.6 million, excluding the impact of stock-based compensation, driven primarily by the implementation of our more focused commercial strategy for YCANTH, including decreases in compensation benefits and travel due to the reduced sales force of $6.9 million, decreased commercial costs of $6.6 million, decreased compensation of $2.7 million related to the termination of non-sales employees, decreased travel and fleet costs of $2 million, and decreased legal and administrative costs of $2.3 million.

John Kirby: During Q4, we made a payment of $35 million to fully settle all outstanding obligations under our credit agreement with OrbiMed, which represented a savings of approximately $7 million from the amount owed on the date of settlement in November 2025. As a result of the settlement of this debt, in accordance with GAAP, we recognized a loss on extinguishment of debt of $1.5 million, as well as a gain of $1.8 million related to the remeasurement of our derivative liability, which no longer exists. Before discussing net loss per share, I will note that on 24 July 2025, we effected a reverse stock split at a ratio of 1-for-10 shares of our common stock.

Speaker #2: During the fourth quarter, we made a payment of $35 million to fully settle all outstanding obligations under our credit agreement with OrbiMed, which represented a savings of approximately $7 million, from the amount owed on the date of settlement in November 2025.

Speaker #2: As a result of the settlement of this debt, in accordance with GAAP, we recognize the loss on extinguishment of debt of $1.5 million, as well as a gain of $1.8 million, related to the remeasurement of our derivative liability, which no longer exists.

Speaker #2: Before discussing net loss per share, I will note that on July 24, 2025, we effected a reverse stock split at a ratio of 1-for-10 shares of our common stock.

John Kirby: As a result, every 10 shares of our issued and outstanding common stock were automatically combined into 1 share. The 2025 and 2024 per share amounts, I will note, reflect the impact of the reverse stock split. GAAP net loss was $8.1 million or $0.57 per share for Q4 2025, compared to GAAP net loss of $16.2 million or $2.41 per share for Q4 2024.

Speaker #2: As a result, every 10 shares of our issued and outstanding common stock were automatically combined into one share. The 2025 and 2024 per-share amounts I will note reflect the impact of the reverse stock split.

Speaker #2: GAAP net loss was $8.1 million, or $0.57 per share, for the fourth quarter of 2025, compared to a GAAP net loss of $16.2 million, or $2.41 per share, for the fourth quarter of 2024.

John Kirby: On a non-GAAP basis, which excludes stock-based compensation, non-cash interest expense, change in fair value of embedded derivatives, and loss on extinguishment of debt, the Q4 2025 net loss was $7.2 million or $0.51 per share, compared to a net loss of $12.2 million or $1.81 per share for the Q4 2024. GAAP net loss was $17.9 million or $1.68 per share for the full year 2025, compared to a GAAP net loss of $76.6 million or $14.78 per share for the full year 2024.

Speaker #2: On a non-GAAP basis, which excludes stock-based compensation, non-cash interest expense, change in fair value of embedded derivatives, and loss on extinguishment of debt, the fourth quarter of 2025 net loss was $7.2 million, or $0.51 per share, compared to a net loss of $12.2 million, or $1.81 per share, for the fourth quarter of 2024.

Speaker #2: GAAP net loss was $17.9 million, or $1.68 per share, for the full year 2025, compared to a GAAP net loss of $76.6 million, or $14.78 per share, for the full year 2024.

Speaker #2: On a non-GAAP basis, which excludes stock-based compensation, non-cash interest expense, change in fair value of embedded derivatives, and loss on extinguishment of debt, the full year 2025 net loss was $13.2 million, or $1.24 per share, compared to a net loss of $64.6 million, or $12.47 per share, for the full year 2024.

John Kirby: Was $13.2 million or $1.24 per share, compared to a net loss of $64.6 million or $12.47 per share for the full year 2024. Finally, as of 31 December 2025, Verrica had aggregate cash and cash equivalents of $30.1 million, which is expected to fund operations into 2027. As Jason mentioned earlier, we received a total of $18 million in cash milestone payments from Torii during 2025 and completed a $50 million private placement in November 2025. I'll now turn the call back over to Jason for closing remarks.

Speaker #2: And finally, as of December 31, 2025, Verica had aggregate cash and cash equivalents of $30.1 million, which is expected to fund operations into 2027.

Speaker #2: As Jayson mentioned earlier, we received a total of $18 million in cash milestone payments from Torii during 2025, and completed a $50 million private placement in November of 2025.

Speaker #2: I'll now turn the call back over to Jayson for closing remarks.

Jayson Rieger: Thanks, John. Over the last 12 months, Verrica's new leadership team has implemented a series of swift and necessary changes to ensure our pathway to sustainable growth. Our team has responded extremely well to these changes, and through their steadfast execution, the results have laid the foundation for a bright future. We are working on establishing YCANTH as the new standard of care for molluscum, executing on our label expansion opportunity with the dosing of the first patient in the phase 3 common warts program, and are preparing for a phase 3-ready program in basal cell carcinoma. We've also extended our cash runway into 2027 and eliminated all outstanding debt. We are growing our core business and advancing our pipeline with a streamlined, more efficient operating structure, and we are ready to create a new future for Verrica and our patients.

Speaker #1: Thanks, John. Over the last 12 months, Verica's new leadership team has implemented a series of swift and necessary changes to ensure our pathway to sustainable growth.

Speaker #1: Our team has responded extremely well to these changes, and through their steadfast execution, the results have laid the foundation for a bright future. We are working on establishing YCAMP as the new standard of care for molluscum, executing on our label expansion opportunity with the dosing of the first patient in the phase three common war program, and are preparing for a phase three ready program in basal cell carcinoma.

Speaker #1: We've also extended our cash runway into 2027 and eliminated all outstanding debt. We are growing our core business and advancing our pipeline with a streamlined, more efficient operating structure.

Speaker #1: And we are ready to create a new future for Verica and our patients. With that, we will be happy to take any questions. Operator?

Jayson Rieger: With that, we will be happy to take any questions. Operator.

Operator 2: Thank you. If you would like to ask a question, please press star one on your keypad. To leave the queue at any time, press star two. Once again, that is star and one to ask a question. We'll take our first question from Stacy Ku with TD Cowen. Please go ahead. Your line is open.

Operator: Thank you. If you would like to ask a question, please press star one on your keypad. To leave the queue at any time, press star two. Once again, that is star and one to ask a question. We'll take our first question from Stacy Ku with TD Cowen. Please go ahead. Your line is open.

Speaker #3: Thank you. And if you would like to ask a question, please press star one on your keypad. To leave the queue at any time, press star two.

Speaker #3: Once again, that is star and one to ask a question. We'll take our first question from Stacey Ku with TD Cowen. Please go ahead.

Speaker #3: Your line is open.

Stacy Ku: Hey, thanks so much for taking our questions, and congrats on the progress. The first question is to Chris Chapman, if you're there, to put you on the spot. Curious what initiatives you have in mind to broaden the YCANTH launch. Our second question is gonna be on the YcanthRx patient hub services that you initiated in Q4. Are you able to go into more details? What kind of improvements you're seeing in real time? Just help us understand how important that access is there. When it comes to sales force, maybe talk about the additions in 2026. When would you expect that to be reflected in sales? Finally, the question we have is on consensus for 2026.

Speaker #4: Hey, thanks so much for taking our questions, and congrats on the progress. So the first question is to Chris, if you're there. To put you on the spot, I'm curious what initiatives you have in mind to broaden the YCAMP launch.

Speaker #4: And then our second question is going to be on the YCAMP Rx patient hub services that you initiated in Q4. Are you able to go into more details?

Speaker #4: What kind of improvements are you seeing in real time? Just help us understand how important that access is there. And then, of course, when it comes to Salesforce, maybe talk about the additions in '26.

Speaker #4: When would you expect that to be reflected in sales? And then finally, the question we have is on consensus for 26. We do appreciate your comments in Q1.

Stacy Ku: We do appreciate your comments in Q1. If you're able to provide any high-level thoughts on we're seeing $30 million for 2026, we would appreciate your views there. Thank you so much.

Speaker #4: So if you're able to provide any high-level thoughts on we're seeing 30 million for 26, would appreciate your views there. Thank you so much.

Jayson Rieger: Thanks, Stacy. Appreciate the questions. I'll start first, you know, with YcanthRx, and I'll hand it over to Chris. You know, we're starting to see some uptake and traction in that, you know, program and have been gradually rolling it out, you know, the non-dispensing pharmacy option to our new prescribers, and we're seeing some early growth. Importantly, our goal is to give this as an option for prescribers over time, and it's an important option for them, you know, particularly as volume grows, to make it, you know, as easy a process as possible. I'll hand this over to Chris to comment on the initiatives that he's working on and, you know, the plans around the sales force.

Speaker #1: Thanks, Stacey. Appreciate the questions. I'll start first. With the YCAMP direction, I'll hand it over to Chris. We're starting to see some uptake and traction in that program.

Speaker #1: And it's been gradually rolling it out. The non-dispensing pharmacy option to our new prescribers. And we're seeing some early growth. And importantly, our goal is to give this as an option for prescribers over time.

Speaker #1: And it's an important option for them, particularly as volume grows, to make it as easy a process as possible. And then I'll hand this over to Chris to comment on the initiatives that he's working on and the plans around the Salesforce.

Chris Chapman: Thank you for the question. You know, as always, when you come into a new organization that's going through a transformation, and the team has done a tremendous job up until this point. We're looking to simplify patient acquisition, physician acquisition of the product, as we achieve some of our access milestones. What's important now is to ensure that as the prescription is written, the diagnosis is made, because as you all know, this is an enormous category, and our largest competition is watchful waiting. As those prescriptions are written, and we're seeing that, as you heard, the highest, a series of highest days, you have a tremendous opportunity to simplify and to make the acquisition of the product easiest.

Speaker #5: Thank you for the question. And as always, when you come into a new organization that's going through a transformation, and the team has done a tremendous job up until this point, we're looking to simplify patient acquisition and physician acquisition of the product.

Speaker #5: As we achieve some of our access milestones, what's important now is to ensure that as the prescription is written, the diagnosis is made. Because as you all know, this isn't an enormous category.

Speaker #5: And our largest competition is watchful waiting. And so as those prescriptions are written and we're seeing that, as you heard, the highest series of highest days, you have a tremendous opportunity to simplify and to make the acquisition of the product easiest.

Chris Chapman: As Jason mentioned, the field force has been optimized, and as we start to plug in that easier path to the prescription, we expect to see to continue the transformation throughout this year.

Speaker #5: As Jayson mentioned, the field force has been optimized. And as we start to plug in that easier path to the prescription, we expect to see the continued transformation throughout this year.

Jayson Rieger: Stacy, to your last comment, you know, appreciate you know, inquiring about, you know, sales consensus in 2026. You know, at this point, we're not gonna provide guidance yet. We're just, you know, as indicated in the release, the momentum we've seen over the last sort of 5 or 6 weeks, you know, gives us some optimism. It's still, you know, early in the quarter, so we'll report as data is generated.

Speaker #1: And Stacey, to your last comment, appreciate you inquiring about sales consensus in 2026. At this point, we're not going to provide guidance yet. We're just as we indicated in the release, what were the momentum we've seen over the last sort of five or six weeks?

Speaker #1: Gives us some optimism, but it's still early in the quarter. So, we'll report as data is generated.

Stacy Ku: Okay. Thought we'd try anyways. Thanks so much.

Speaker #4: Okay, thought we'd try anyways. Thanks so much.

Jayson Rieger: I appreciate it.

Speaker #1: I appreciate it.

Operator 2: Thank you. We will move next to Dennis Ding with Jefferies. Please go ahead. Your line is open.

Operator: Thank you. We will move next to Dennis Ding with Jefferies. Please go ahead. Your line is open.

Speaker #3: Thank you. We will move next to Dennis Ding with Jefferies. Please go ahead. Your line is open.

Georgia Bank: Hi, this is Georgia Bank on for Dennis Ding. Thanks for taking our questions. I was wondering what kind of partnerships might you be looking into around expansion into the EU and the type of commercial partnerships that most appealing to you as you think about that? I have a follow-up.

Speaker #6: Hi. This is Georgia Bank on for Dennis Ding. Thanks for taking our questions. I was wondering what kind of partnerships might you be looking into around expansion into the EU and the type of commercial partnerships that most appealing to you as you think about that?

Speaker #6: And then I have a follow-up.

Jayson Rieger: Sure. You know, in general, we don't comment on the nature of our business development activities. You know, what we can generally say is molluscum is a type of disease that affects children around the world. You know, given the clinical and, you know, safety profile of the product, you know, there continues to be interest. We're looking for partners who can help, you know, bring this product to the patients in need and provide, you know, access to the caregivers who treat them. We'll continue to explore those options and what they might look like. As we indicated last year, we have a very clear path towards registration, you know, in Europe, and we're continuing to advance those activities. As develops, you know, warrant and can be disclosed, we will provide those updates to you and others.

Speaker #1: Sure. In general, we don't comment on the nature of our business development activities. What we can generally say is molluscum is a type of disease that affects children around the world.

Speaker #1: And given the clinical and safety profile of the product, there continues to be interest. And we're looking for partners who can help bring this product to the patients in need and provide access to the caregivers who treat them.

Speaker #1: And so we're continuing to explore those options and what they might look like. As we indicated last year, we have a very clear path towards registration, in Europe.

Speaker #1: And we're continuing to advance those activities. And as developments warrant and can be disclosed, we will provide those updates to you and others.

David Brown: Got it. That's helpful. Thank you. Any comments around what you're seeing on the ground in terms of competitive dynamics with the competitors of ZELSUVMI?

Georgia Bank: Got it. That's helpful. Thank you. Any comments around what you're seeing on the ground in terms of competitive dynamics with the competitors of ZELSUVMI?

Speaker #4: Got it. That's helpful, thank you. And then, any comments around what you're seeing on the ground in terms of competitive dynamics with the competitors of Zoovmi?

Jayson Rieger: Sure. Like I said, you know, this isn't their being on the market, you know, helps validate the demand and need for treatments of molluscum. As Chris just alluded to, at this point, the largest competitor by far is watchful waiting because patients, you know, didn't really have a lot of therapeutic options, and their caregivers didn't have options to provide them. I think now with more voice, you know, in the market, I think that will impact the opportunity for patients, you know, to get therapies they need, for caregivers to provide it.

Speaker #1: Sure. Like I said, their being on the market helps validate the demand and need for treatments of molluscum. And as Chris just alluded to, at this point, the largest competitor by far is watchful waiting, because patients didn't really have a lot of therapeutic options.

Speaker #1: And their caregivers didn't have options to provide them. I think now with more voice, in the market, I think that will impact the opportunity for patients to get therapies they need for caregivers to provide it.

Jayson Rieger: We're still very confident in the value proposition of YCANTH and what it brings to those clinicians as we see, you know, efficacy often, you know, when as early as one or two treatments in short office visits where the caregivers, you know, are under the control of the clinicians, and the clinicians can ensure adequate, proper and safe treatment of the patients to resolve their disease as quickly as possible.

Speaker #1: And we're still very confident in the value proposition of YCAMP and what it brings to those clinicians, as we see efficacy often as early as one or two treatments in short office visits, where the caregivers are under the control of the clinicians, and the clinicians can ensure adequate, proper, and safe treatment of the patients to resolve their disease as quickly as possible.

David Brown: Got it. Thank you.

Georgia Bank: Got it. Thank you.

Speaker #4: Got it. Thank you.

Operator 2: Thank you. We will move next to Serge Bélanger with Needham & Company. Please go ahead. Your line is open.

Operator: Thank you. We will move next to Serge Bélanger with Needham & Company. Please go ahead. Your line is open.

Speaker #3: Thank you. We will move next to Serge Belanger with Needham & Company. Please go ahead. Your line is open.

[Analyst] (Needham & Company): Great, thanks. Good morning, everyone. This is John on for Serge Bélanger today. Thanks for taking our questions. First, just a quick follow-up to the previous question on the sales force optimization. Just curious how much of the TAM or how many molluscum prescribers you plan to target with this size team. I would imagine it's still predominantly focusing in pediatricians over dermatologists, but if you could provide any color on that'd be great. Second, on insurance coverage, you mentioned some wins in 2025 and 2026. Just curious whether these wins are on the commercial side or, and/or Medicaid. If you could provide any additional color on where YCANTH coverage stands in both of those segments, that would be great.

John Todaro: Great, thanks. Good morning, everyone. This is John on for Serge Bélanger today. Thanks for taking our questions. First, just a quick follow-up to the previous question on the sales force optimization. Just curious how much of the TAM or how many molluscum prescribers you plan to target with this size team. I would imagine it's still predominantly focusing in pediatricians over dermatologists, but if you could provide any color on that'd be great. Second, on insurance coverage, you mentioned some wins in 2025 and 2026. Just curious whether these wins are on the commercial side or, and/or Medicaid. If you could provide any additional color on where YCANTH coverage stands in both of those segments, that would be great.

Speaker #7: Great. Thanks. Good morning, everyone. This is John on for Serge today. Thanks for taking our questions. First, just a quick follow-up to the previous question on the Salesforce optimization.

Speaker #7: Just curious how much of the TAM or how many molluscum prescribers you plan to target with this size team? And I would imagine it's still predominantly focusing in pediatricians over dermatologists.

Speaker #7: But if you could provide any color on that, that'd be great. And then second, on insurance coverage, you mentioned some wins in '25 and '26.

Speaker #7: Just curious whether these wins are on the commercial side or and/or Medicaid. And if you could provide any additional color on where YCAMP coverage stands in both of those segments, that would be great.

Chris Chapman: Thanks for the question. Yes, to your assumption around the pediatricians, we will continue to expand into the pediatrician space. A caveat on the dermatology. We will continue to refine our targeting of the dermatology specialty. The velocity in dermatology is significantly higher in terms of early adoption and expansion of the category. Dermatology remains a key focus. Of course, pediatric dermatology is very important and expanding reach into the pediatric community. With our field force now optimized, one of the key things that I'll do coming in is revisit all of our targeting and segmentation to ensure we're calling on the right physician mix. As Jayson mentioned, having a competitor in the market is very favorable to both manufacturers, to the physicians, and to the caregivers and patients.

Speaker #5: Oh, thanks for the question. And yes, to your assumption around the pediatricians, we will continue to expand. Into the pediatrician space. But a caveat on the dermatology.

Speaker #5: We will continue to refine our targeting of the dermatology specialty. The velocity in dermatology is significantly higher in terms of early adoption and expansion of the category.

Speaker #5: So, dermatology remains a key focus. Of course, pediatric dermatology is very important, and expanding reach into the pediatric community. So, with our field force now optimized, one of the key things that I'll do coming in is revisit all of our targeting and segmentation to ensure we're calling on the right physician mix.

Speaker #5: As Jason mentioned, having a competitor in the market is very favorable to both manufacturers to the physicians and to the caregivers and patients. It's important these patients are not being treated currently.

Chris Chapman: It's important these patients are not being treated currently. They are in the office. We're getting the diagnosis. We have to make sure we're getting the prescription, the innovation in their hands. More to come on the targeting. Dermatology, the take-home point here, is absolutely a key pillar in the growth of YCANTH, and pediatricians are that expansion and that fuel that will continue to grow the category.

Speaker #5: They are in the office. We're getting the diagnosis. We have to make sure we're getting the prescription, the innovation, in their hands. So more to come on the targeting.

Speaker #5: But dermatology—the take-home point here—is absolutely a key pillar in the growth of YCAMP, and pediatricians are that expansion and that fuel that will continue to grow the category.

Jayson Rieger: Excellent. You know, I think Dave will make a comment sort of on the your question regarding coverage.

Speaker #1: Excellent. And I think Dave will make a comment sort of on the your question regarding coverage.

David Zawitz: Good morning. This is Dave. On coverage, I would say the coverage wins described, you know, generally in the press release, you know, it's both Medicaid and commercial enhancements during that period of time. Of course, we're always looking for opportunities to expand coverage to cover any patients who would benefit from YCANTH. You know, it's sort of generic, but we always do look for opportunities there that make sense for the company. We've had some enhancements in both periods on both channels.

Speaker #8: Good morning. This is Dave. So yeah, so on coverage, I would say the coverage wins describe generally in the press release. It's both Medicaid and commercial enhancements during that period of time.

Speaker #8: Of course, we're always looking for opportunities to expand coverage to cover any patients who would benefit from YCAMP. So that's a sort of generic, but we always do look for opportunities there that make sense for the company.

Speaker #8: We've had some enhancements, but in both periods on both channels.

[Analyst] (Needham & Company): Great. Thanks for the color.

John Todaro: Great. Thanks for the color.

Speaker #7: Great. Thanks for the color.

Operator 2: Thank you. We will move next with Kemp Dolliver with Brookline Capital Markets. Please go ahead. Your line is open.

Operator: Thank you. We will move next with Kemp Dolliver with Brookline Capital Markets. Please go ahead. Your line is open.

Speaker #3: Thank you. We will move next with Camp Doliver with Brookline Capital Markets. Please go ahead. Your line is open.

David Brown: Great, thank you. With regard to the sequential decline in applicators in the quarter, was that geographically concentrated, or was it a widespread decline?

Kemp Dolliver: Great, thank you. With regard to the sequential decline in applicators in the quarter, was that geographically concentrated, or was it a widespread decline?

Speaker #9: Great. Thank you. With regard to the sequential decline in applicators in the quarter, was that geographically concentrated, or was it a widespread decline?

Jayson Rieger: Yeah, thanks. You know, I think that, you know, in general, you know, we saw some, you know, we had some replacements of some of our field force, so we had some gaps that were being backfilled. Those reps, you know, started in Q4, and that's, you know, I think what we're seeing as part of the attribution to the growth we alluded to in February. Those reps, you know, started hitting the ground running and be up to speed.

Speaker #1: Yeah, thanks. I think that, in general, we saw some—we had some replacements of some of our field force, so we had some gaps that were being backfilled.

Speaker #1: Those reps started in Q4. And that's I think what we're seeing as part of the attribution to the growth we alluded to in February.

Speaker #1: Those reps hit the ground running and will be up to speed.

David Brown: Okay, great. That's very helpful. Secondly, with VP-315 in the Phase 3 program, what's the estimated cost or, you know, how much outside capital would you like to bring in to commence that program?

Kemp Dolliver: Okay, great. That's very helpful. Secondly, with VP-315 in the Phase 3 program, what's the estimated cost or, you know, how much outside capital would you like to bring in to commence that program?

Speaker #9: Okay, great. That's very helpful. Secondly, with VP315 in the Phase 3 program, what's the estimated cost, or how much outside capital would you like to bring in to commence that program?

Jayson Rieger: That's an interesting question. We've not disclosed the full development program and timing for that as of yet. We're still working, you know, to get bids, as we indicated in the release. You know, our activities now are on the pre-planning activities, you know, CMC supply, to make sure we're ready to initiate that trial, you know, provided, you know, funding, et cetera, later this year. Importantly, you know, the goal is to run that program as efficiently as possible. We received, you know, very favorable feedback from the FDA with regards to the design of that program in terms of the number of patients, the placebo control, the duration, and that the long-term follow-up will be, you know, sort of post approval as a requirement.

Speaker #1: So that's an interesting question. We've not disclosed the full development program and timing for that as of yet. We're still working to get bids as we indicated in the release.

Speaker #1: Our activities now are on the pre-planning activities. CMC supply to make sure we're ready to initiate that trial provided funding, etc., later this year.

Speaker #1: But importantly, the goal is to run that program as efficiently as possible. We received very favorable feedback from the FDA with regards to the design of that program in terms of the number of patients, the placebo control, the duration, and that the long-term follow-up will be sort of post-approval as a requirement.

Jayson Rieger: As we're working with the CROs to sort of design out that program and get costs, you know, we'll share that. As it comes from a normal, you know, development stage program, particularly oncology, we expect it'll be far less than those typical programs cost.

Speaker #1: And so as we're working with the CROs to sort of design out that program and get costs, we'll share that. But as it comes from a normal development stage program, particularly oncology, we expect it'll be far less than those typical programs cost.

David Brown: Great. One last question. There is a handful of essentially private equity-backed dermatology chains in various regions of the country. There, early in the launch, there had been some attempts to penetrate them and, you know, possibly get some larger, you know, contracts in place. Have you revisited that market segment at all or plan to?

Kemp Dolliver: Great. One last question. There is a handful of essentially private equity-backed dermatology chains in various regions of the country. There, early in the launch, there had been some attempts to penetrate them and, you know, possibly get some larger, you know, contracts in place. Have you revisited that market segment at all or plan to?

Speaker #9: Great. And then one last question. There is a handful of essentially private equity-backed dermatology chains in various regions of the country. And early in the launch, there had been some attempts to penetrate them and possibly get some larger contracts in place.

Speaker #9: Have you revisited that market segment at all, or plan to?

Jayson Rieger: Yeah. I would say there are certainly a lot of those chains. You know, one of the hallmarks they have is while they do aggregate on operations and some efficiencies on, you know, the back-end, you know, aspects of business, they do allow the clinicians to make the best medical choice for treatment of their patients on a broad setting. We've worked very hard to make YCANTH accessible to those clinicians, whether it's through buy and bill, through a specialty pharmacy or any other avenue that works for them. We do see writers in many of those private equity-backed, you know, systems currently, and we continue to expand our relationships with them.

Speaker #1: Yeah. So I would say that in there are certainly a lot of those chains. One of the hallmarks they have is while they do aggregate on operations and some efficiencies on the backend aspects of the business, they do allow the clinicians to make the best medical choice for treatment of their patients on a broad setting.

Speaker #1: And we've worked very hard to make YCAMP accessible to those clinicians, whether it's through buy and bill, through a specialty pharmacy, or any other avenue that works for them.

Speaker #1: And we do see writers in many of those private equity-backed systems currently. And we continue to expand our relationships with them.

David Brown: Great. Thank you.

Kemp Dolliver: Great. Thank you.

Jayson Rieger: Yep.

Speaker #9: Great. Thank you.

Operator 2: Thank you. Our next question comes from Dev Prasad with Lucid Capital Markets. Please go ahead. Your line is open.

Operator: Thank you. Our next question comes from Dev Prasad with Lucid Capital Markets. Please go ahead. Your line is open.

Speaker #1: Yep.

Speaker #3: Thank you. Our next question comes from Dev Prasad with Lucid Capital Markets. Please go ahead, your line is open.

Dev Prasad: Hi. Thank you for taking our question. I have a couple. One on YCANTH. You mentioned February was the record month for dispensing applicator per selling day. Can you help us think about the seasonality curve for YCANTH, and how should we model the quarterly cadence through 2026? The second is on common warts program. Can you walk us through the enrollment timeline for the two phase 3s? When should we expect top-line data, and is there going to be stagger between US, Japan versus the global studies? Thank you.

Speaker #10: Hi. Thank you for taking our question. I have a couple. One on YCAMP. You mentioned February was the required month for dispensing applicator per selling day.

Speaker #10: Can you help us think about the seasonality curve for YCAMP, and how we should model the quarterly cadence through 2026? And the second is on the common WARS program.

Speaker #10: Can you walk us through the enrollment timeline for the two Phase 3s? When should we expect top-line data? And is there going to be a stagger between US, Japan, versus the global studies?

Jayson Rieger: Sure. In terms of February, you know, historically and sort of seasonality-wise, you know, Q1, you know, is a slower, you know, quarter, you know, particularly for office treatments, et cetera, as people's you know, deductible season gets reset. The investments we made last year in our marketing, our field force, our sales styles, et cetera, as well as our team, seem to be playing, you know, playing out. We saw that growth in February. We wanted to share that with you all so you understand that we're seeing that observation. We're early in the launch, so I think there's potential for growth, and we're very excited about it, particularly in a shortened month. You know, February is one of the shortest number of selling days in the year.

Speaker #10: Thank you.

Speaker #1: Sure. So in terms of February historically and sort of seasonality-wise, Q1 is a slower quarter. Particularly for office treatments, etc., as people's deductible season gets reset.

Speaker #1: And so the investments we made last year in our marketing, our field force, our sales styles, etc., as well as our team, seem to be playing out.

Speaker #1: And so we were seeing we saw that growth in February. We wanted to share that with you all so you understand that we're seeing that observation.

Speaker #1: And we're early in the launch, so I think there's potential for growth. And we're very excited about it, particularly in a shortened month. February is one of the months with the fewest number of selling days in the year.

Jayson Rieger: There is still some seasonality of weather and access based on, you know, especially East Coast and Midwest on snow, et cetera. We saw access and demand to YCANTH, and, you know, we'll see what continues to trend over this year, but we're certainly excited about that. With regards to common warts, you know, I'll just make a brief comment. We started the first trial. We're very, you know, we're working very hard, and Noah and his team are working very hard to execute on enrollment for that trial. When we initiate the second trial to Q3, we will sort of provide an update. As that trial is in collaboration with our partner, Torii, we want to, you know, share in that, you know, announcement with them. When that happens, we will do that.

Speaker #1: There is still some seasonality of weather and access based on especially East Coast and Midwest on snow, etc. But we saw access and demand to YCAMP.

Speaker #1: And we'll see what continues to trend over this year. But we're certainly excited about that. With regards to common WARS, I'll just take a brief comment.

Speaker #1: We started the first trial very we're working very hard. And knowing his team, are working very hard to execute on enrollment for that trial.

Speaker #1: When we initiate the second trial to three, we will sort of provide an update. But as that trial is in collaboration with our partner TORI, we want to share in that announcement with them.

Jayson Rieger: Our goal would be, as those trials are enrolling, to try and get them to complete as quickly and as, you know, simultaneously as possible, and we'll evaluate what that looks like. Depending on the long-term follow-up requirements and the number of patients, and the cadence of those in Japan versus the US, there may be a slight stagger in the registrational filing with the regulators. That'll be sort of TBD determined at the end. Both companies will rely on the core bit of data from both those trials for the regulatory submissions.

Speaker #1: And so when that happens, we will do that. Our goal would be, as those trials are enrolling, to try and get them to complete as quickly and as simultaneously as possible.

Speaker #1: And we'll evaluate what that looks like. Depending on the long-term follow-up requirements and the number of patients, and the cadence of those in Japan versus the US, there may be a slight stagger in the registrational filing with the regulators.

Speaker #1: That'll be sort of to be determined at the end. But both companies will rely on the core bit of data from both those trials for the regulatory submissions.

Dev Prasad: Great. Thank you.

Jayson Rieger: Yep.

Speaker #9: Great. Thank you.

Operator 2: Thank you. We will move next to Ram Selvaraju with H.C. Wainwright. Please go ahead. Your line is open.

Operator: Thank you. We will move next to Ram Selvaraju with H.C. Wainwright. Please go ahead. Your line is open.

Speaker #1: Yep.

Speaker #3: Thank you. We will move next to Ram Selvaraju with HC Wainwright. Please go ahead. Your line is open.

Ram Selvaraju: Thanks so much for taking our questions. I just wanted to ask about the comparison of the common warts opportunity to the molluscum opportunity, and if you could perhaps characterize the overall size of this commercial opportunity in the United States as well as any noteworthy differences in prescriber base that you anticipate, as you move common warts downfield. Secondly, I was wondering if you could perhaps comment in the context of the potential applicability of the product to the treatment of basal cell carcinoma. If specifically within that context, there may be potential for utilization of the product in patients who would otherwise be considered candidates for Mohs surgery. Thank you.

Speaker #11: Thanks so much for taking our questions. I just wanted to ask about the comparison of the common WARS opportunity to the molluscum opportunity. And if you could perhaps characterize the overall size of this commercial opportunity in the United States, as well as any noteworthy differences in prescriber base that you anticipate as you move common WARS downfield.

Speaker #11: And secondly, I was wondering if you could perhaps comment in the context of the potential applicability of the product to the treatment of basal cell carcinoma.

Speaker #11: If, specifically within that context, there may be potential for utilization of the product in patients who would otherwise be considered candidates for Mohs surgery.

Jayson Rieger: Sure. Thanks, Ram. Appreciate the question. In terms of the market size for common warts versus molluscum, you know, the prevalence data is estimated for molluscum of about 6 million, you know, patients in the United States. You know, common warts is estimated to be 20 million or more. Just that alone is about 3 times the market. Based on what we've seen currently is since launch of most patients, you're receiving about 2 applicators for the treatment of the molluscum. We expect common warts may also require perhaps 1 or 2 more applicators. That'll be determined based on the efficacy results we see in phase 3. You know, common warts tend to be more persistent and difficult to clear.

Speaker #11: Thank you.

Speaker #1: Sure. Thanks, Ram. Appreciate the question. So in terms of the market size for common WARS versus molluscum, the prevalence data is estimated for molluscum of about 6 million patients in the United States.

Speaker #1: Common WARS is estimated to be 20 million or more. And so just that alone is about three times the market. Based on what we've seen currently, since launch, of most patients, you're receiving about two applicators for the treatment of the molluscum.

Speaker #1: We expect common WARS may also require perhaps one or two more applicators that'll be determined based on the efficacy results we see in phase three.

Speaker #1: Common warts tend to be more persistent and difficult to clear. And that's why, based on the data we disclosed in our phase two study, we saw about 50% of the common warts were cleared at the end of four treatments.

Jayson Rieger: That's why, based on the data we disclosed in our Phase 2 study, you know, we saw about 50% of the common warts were cleared at the end of 4 treatments. And that we saw some maintenance of that clearance, you know, and persistence of that, you know, after a small period of follow-up. We were gonna extend that period in our Phase 3 trial. In terms of the prescriber base, that's a really interesting question. It's something we're very excited about. It's why you're seeing the investment we're making in our commercial team, our commercial leadership, and the investment in engaging with our prescribers, including, you know, our core group of dermatologists and expanding that and pediatricians as we expect the same product presentation for YCANTH will be both for common warts and molluscum.

Speaker #1: And we saw some maintenance of that clearance and persistence of that in a small period of follow-up. We were going to extend that period in our phase three trial.

Speaker #1: In terms of the prescriber base, that's a really interesting question. It's something we're very excited about. And it's why you're seeing the investment we're making in our commercial team, our commercial leadership, and the investment in engaging with and with our prescribers, including our core group of dermatologists and expanding that and pediatricians, as we expect the same product presentation for YCAMP will be both for common WARS and molluscum.

Jayson Rieger: You know, should common warts get approved by the FDA and expand the label. That's important as that core base of prescribers see typically both types of patients. They'll have familiarity with the access to the drug, how to use the drug, the workflow in their offices, et cetera. We work to make that as seamless as possible and expect that could be a more expedited launch process given the established base and the expansion of the label should common warts be added to it. With regards to our basal cell carcinoma program, that program is, you know, our goal is to change the way those lesions are treated. Historically, it has been Mohs surgery for predominant use for some types of superficial lesions.

Speaker #1: Should common WARS get approved by the FDA and expand the label? That's important as that core base of prescribers see typically both types of patients.

Speaker #1: They'll have familiarity with the access to the drug, how to use the drug, the workflow in their offices, etc. And so we've worked to make that as seamless as possible and expect that could be a more expedited launch process, given the established base and the expansion of the label should common warts be added to it.

Speaker #1: With regards to our basal cell carcinoma program, the goal of that program is to change the way, or the way those lesions are treated.

Speaker #1: Historically, it has been Mohs surgery. For a predominant use, for some types of superficial lesions, there are topicals. There are a number of therapies out there, but they all have limitations in terms of patient compliance and the impact of that on efficacy.

Jayson Rieger: There are topicals, you know, there are a number of therapies out there, but they all have limitations in terms of patient compliance, you know, and the impact of that on efficacy, on convenience or number of treatments or costs, or particularly, you know, surgery, surgical complications, surgical fatigue, or in patients that are simply just not eligible or from their health or other reasons for surgery. As we've done our engagement with a number of clinicians, whether it's dermatologists who do Mohs or dermatologists who don't, but still see a number of patients that are the primary diagnoser of the basal cell, we see potential uptick in both of those groups.

Speaker #1: On convenience, or number of treatments or cost, or particularly surgery, surgical complications, surgical fatigue, or in patients that are simply just not eligible or from their health or other reasons for surgery.

Speaker #1: As we've done our engagement with a number of clinicians, whether it's dermatologists who do Mohs or dermatologists who don't, but still see a number of patients but are the primary diagnoser of the basal cell.

Speaker #1: We see potential uptake in both of those groups. The Mohs surgeons recognize that the complexity of any procedure they have to do—if we can dramatically reduce the size of the lesion, as we've indicated—we see greater than 80% reduction in overall lesion size, and about 50% of our patients, just in our phase 2 study, saw complete histological clearance of 100%.

Jayson Rieger: The Mohs surgeons recognize that the complexity of any procedure they have to do, you know, if we can dramatically reduce the size of the lesion, as we've indicated, we see, you know, greater than 80% reduction in overall lesion size. About 50% of our patients, just in our Phase 2 study, saw complete histological clearance of 100%. In addition to the abscopal data we just reported on and expanded on in this release, we're seeing lesions that were not treated and that are distal from the treated lesions also starting to shrink during the same course of the 12 weeks that these patients are followed. I think this really presents an opportunity for better outcomes for the Mohs surgeons, as if the lesion's smaller, the surgery will be simpler and, or may not, may be avoided completely.

Speaker #1: In addition to the abscopal data we just reported on and expanded on in this release, we're seeing lesions that were not treated and that are distal from the treated lesions also starting to shrink during the same course of the 12 weeks that these patients are followed.

Speaker #1: So I think this really presents an opportunity for better outcomes for the Mohs surgeons, as if the lesion's smaller, the surgery will be simpler.

Speaker #1: And/or may not be avoided completely. So, the product could be used both neoadjuvantly or as the primary therapeutic option for a wide range of patients.

Jayson Rieger: The product could be used both neoadjuvantly or as the primary therapeutic option for a wide range of patients. We'll continue to expand our market research, and we'll share further updates on that going forward. We're excited about this opportunity to modernize and change the way people can treat basal cell, and particularly in a way that's pharmacologic and not surgical.

Speaker #1: And we're continuing to expand our market research, and we'll share further updates on that going forward. But we're excited about this opportunity to modernize and change the way people can treat basal cell, and particularly in a way that's pharmacologic and not surgical.

Ram Selvaraju: Thank you.

Jayson Rieger: Yes.

Speaker #12: Thank you.

Speaker #1: Yes.

Operator 2: Thank you. At this time, there are no further questions in queue. I will now turn the meeting back to CEO, Jayson Rieger.

Operator: Thank you. At this time, there are no further questions in queue. I will now turn the meeting back to CEO, Jayson Rieger.

Speaker #13: Thank you. And at this time, there are no further questions in the queue. I will now turn the meeting back to CEO Jayson Rieger.

Jayson Rieger: Thank you, operator. I'd like to thank all of you for joining us this morning, and we look forward to providing updates on our programs in 2026. Have a nice day.

Speaker #1: Thank you, operator. I'd like to thank all of you for joining us this morning and we look forward to providing updates on our programs in 2026.

Operator 2: Thank you. This brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.

Operator: Thank you. This brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.

Speaker #1: Have a nice day.

Q4 2025 Verrica Pharmaceuticals Inc Earnings Call

Request a DemoDemo

VRCA

Verrica Pharmaceuticals

Earnings