Release Date: August 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Verrica Pharmaceuticals Inc (VRCA, Financial) reported product revenue net of $4.9 million for YCANTH, reflecting growth in demand and expansion of distribution.
- The company successfully settled litigation with Dormer Laboratories, leading to the discontinuation of non-FDA-approved cantharidin products in the US.
- YCANTH received a permanent J-Code from CMS, enhancing visibility for commercial insurers and facilitating reimbursement processes.
- Positive preliminary efficacy data for VP-315 in treating basal cell carcinoma showed a 51% complete histologic clearance rate.
- Verrica Pharmaceuticals Inc (VRCA) has expanded its coverage footprint, reaching 234 million lives under coverage across various health plans.
Negative Points
- The company reported a GAAP net loss of $17.2 million for the second quarter of 2024, an increase from the previous year.
- Selling, general, and administrative expenses rose significantly to $16.5 million, driven by commercial activities for YCANTH.
- The cash and cash equivalents of $31.9 million are expected to fund operations only into the first quarter of 2025, indicating potential financial constraints.
- The removal of compounded cantharidin from the market is expected to take time, potentially affecting YCANTH's demand in the short term.
- Verrica Pharmaceuticals Inc (VRCA) faces competition from other companies entering the molluscum contagiosum treatment market, which could impact market share.
Q & A Highlights
Q: Can you provide metrics on the progress in removing compounded cantharidin and the expected timeline for resolution? Also, when do you expect stocking to normalize?
A: Ted White, CEO, explained that the last shipment of compounded cantharidin was in April 2024, with a six-month shelf life, so it should bleed out by the second half of the year. Terry Kohler, CFO, added that they expect inventory to normalize by early 2025 as demand grows.
Q: What is the pathway forward for VP-315 in basal cell carcinoma, considering the current surgical treatment paradigm?
A: Gary Goldenberg, CMO, stated that VP-315 has shown a 51% complete histologic clearance rate and a 71% reduction in tumor size for residual tumors in Phase 2 trials. This suggests it could be used between biopsy and surgery, potentially reducing the need for surgery or the size of surgical interventions.
Q: How are you prioritizing efforts to accelerate YCANTH's market presence, and what is the impact of same-day treatment and prior authorization barriers?
A: Ted White, CEO, emphasized removing prior authorizations, especially in managed Medicaid, and enhancing the co-pay program. They are also leveraging partnerships with Cencora and Vizient to improve market penetration and streamline processes for physicians.
Q: Are you seeing any new compounded cantharidin entering the market after the settlement with Dormer Labs?
A: Ted White, CEO, confirmed that there is no new compounded cantharidin entering the market, though some Dormer inventory is still being used up.
Q: With the recent approval of a competitor's product, how do you view the competitive landscape for YCANTH?
A: Ted White, CEO, acknowledged the approval of ZELSUVMI but sees it as beneficial, as it increases awareness of molluscum contagiosum treatment. He believes cantharidin remains the gold standard.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
