Verrica Pharmaceuticals — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenue for the quarter ended September 30, 2026, was $6.9 million, down from $14.3 million in the same period in 2025, which included a $10.0 million one-time milestone payment from Torii Pharmaceutical Co., Ltd.
• U.S. YCANTH net product revenue was $5.7 million, representing an 11.9% increase over the previous quarter and a 57.9% increase year-over-year compared to $3.6 million in Q3 2025.
• License and collaboration revenue was $1.2 million, compared to $10.7 million in Q3 2025, which included $10.0 million in one-time milestone revenue.
• Costs of product revenue were $0.6 million for the quarter, compared to $0.8 million in Q3 2025.
• Selling, general, and administrative expenses were $10.4 million, up from $9.4 million in Q3 2025; excluding stock-based compensation, expenses were comparable to the prior period.
• Research and development expenses were $7.6 million, up from $2.2 million in Q3 2025; excluding stock-based compensation, the $5.2 million increase was driven by $3.7 million in non-cash costs for the Phase 3 common warts program and $1.3 million in chemistry, manufacturing, and controls expenses.
• Interest income was $45,000, down from $0.2 million in Q3 2025, primarily due to lower cash balances.
• Interest expense was $0.3 million, down from $2.1 million in Q3 2025, following the settlement of the OrbiMed debt facility and partially offset by imputed interest and term loan interest.
• Net loss was $12.4 million ($0.58 per share), compared to a net loss of $0.3 million ($0.03 per share) in Q3 2025.
• Non-GAAP net loss was $10.5 million ($0.49 per share), compared to non-GAAP net income of $1.1 million ($0.12 per share) in Q3 2025.
• Cash and cash equivalents were $14.4 million as of September 30, 2026, down from $30.1 million as of December 31, 2025.
• Total liabilities were $45.8 million as of September 30, 2026, compared to $22.4 million as of December 31, 2025, driven by a $11.6 million term loan and a $10.9 million R&D funding liability.

Guidance and Future Outlook:

• The company believes its cash runway extends into the fourth quarter of 2027 based on the current business plan and full utilization of the credit facility, excluding potential clinical trial costs for VP-315 in Gorlin syndrome.
• Topline data for the first pivotal Phase 3 trial (COVE-2) for common warts is expected in Q1 2027.
• Topline data for the second pivotal Phase 3 trial (COVE-3) for common warts is expected in mid-2027.
• The company is evaluating the potential study design and associated trial budget for VP-315 in Gorlin syndrome and will update its business plan upon finalizing the study.

Business Segments and Product Lines:

• YCANTH dispensed applicator units totaled 19,135 in Q3 2026, a 36% year-over-year increase, though a 2.5% sequential decrease was attributed to summer travel seasonality.
• Pooled analysis data from two registrational Phase 3 trials for YCANTH in molluscum showed patients achieved complete clearance approximately four times faster than placebo and three times as many patients achieved complete clearance at each treatment visit.
• Enrollment was completed in the first pivotal trial for YCANTH in common warts (COVE-2) after an interim analysis determined no additional patients were needed; over 50% of the patient target was enrolled in the second trial (COVE-3).
• An exclusive distribution, marketing, and supply agreement was announced with Medomie Pharma Ltd. for YCANTH in Israel, with regulatory filing support underway.
• VP-315 (ruxotemitide) is being explored for the treatment of Gorlin syndrome, a rare genetic disease characterized by frequent basal cell carcinomas, leveraging data from a completed Phase 2 study in sporadic basal cell carcinoma.
• Encore poster presentations for VP-315 were announced at scientific meetings on September 10 and 30, 2026.

Market and Competitive Landscape:

• The common warts market in the U.S. has a prevalence of approximately 22 million patients and currently has no FDA-approved prescription drug therapies.
• YCANTH is the first and only FDA-approved healthcare professional-administered product for molluscum contagiosum, affecting an estimated six million people in the U.S.
• VP-315 has no current FDA-approved products available for the treatment of Gorlin syndrome.

Risks and Challenges:

• The Phase 3 common warts program involves non-cash costs of $3.7 million for the quarter, though the first $40 million of payments (approximately 90% of estimated study costs) will be made by Torii under the collaboration agreement.
• Forward-looking statements regarding future commercial growth, trial timelines, and potential approvals involve risks and uncertainties that could cause actual results to differ materially.

Management Commentary and Tone:

• CEO Jayson Rieger stated the company made progress in growing the commercial YCANTH business and advancing the late-stage pipeline while extending cash runway.
• Management noted that efforts to maximize conversion of written to filled prescriptions and ensure optimal insurance coverage, including the YCanthRx non-dispensing pharmacy option, have matured and improved gross-to-net ratios.
• Management expressed confidence that securing a label expansion for YCANTH into common warts could represent a multibillion-dollar commercial opportunity if approved.
• The company highlighted a solid commercial foundation to support promotion of YCANTH for molluscum, which can be leveraged upon any future approvals.

Other Key Points:

• On October 22, 2026, the company achieved milestones unlocking access to the remaining $15.0 million of non-dilutive growth capital under a $27.5 million credit facility with an entity controlled by Chairman Paul B. Manning.
• The credit facility extension allows the company to fund operations through data readouts for both common warts trials.
• The company is working with Medomie Pharma Ltd. to support their regulatory filing in Israel for YCANTH.
• A conference call to discuss results is scheduled for November 12, 2026, at 4:30 pm ET.