On August 5, 2020 Verrica Pharmaceuticals Inc. ("Verrica") (Nasdaq: VRCA), a dermatology therapeutics company developing medications for viral skin diseases requiring medical interventions, reported financial results for the second quarter ended June 30, 2020 (Press release, Verrica Pharmaceuticals, AUG 5, 2020, View Source [SID1234563554]).
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"We have made recent key personnel changes that will be important as we work to resubmit the New Drug Application for VP-102, following receipt of a Complete Response Letter from the U.S. Food and Drug Administration. We’re encouraged that the FDA did not raise any clinical safety or efficacy questions, and having recently strengthened leadership in clinical, CMC, and regulatory affairs, we intend to request a Type A meeting with FDA during the third quarter to discuss next steps for resubmission of our NDA. We continue to believe VP-102 can potentially be approved as a safe, effective treatment for molluscum," said Ted White, Verrica’s President and Chief Executive Officer.
Business Highlights and Recent Developments
Verrica received a Complete Response Letter (CRL) from the U.S. Food and Drug Administration (FDA) regarding the New Drug Application (NDA) for VP-102, in which the FDA requested additional information regarding certain aspects of the CMC (Chemistry, Manufacturing, and Controls) process, as well as Human Factors validation. The Agency noted no clinical safety or efficacy deficiencies were identified. Verrica intends to request a Type A meeting with the FDA during the third quarter of 2020, and is committed to working to resubmit the NDA as quickly as possible.
The Company announced changes to its Board of Directors, as well as its CMC, and Regulatory Affairs leadership. Dr. Lawrence Eichenfield, a leading pediatric dermatologist, has been appointed to the Board. Dr. Eichenfield replaces Dr. Gary Goldenberg, who stepped down from the Board to assume the role of Verrica’s Chief Medical Officer. The Company also appointed Dr. Brad Catalone to the newly created position of Head of Drug Development.
Verrica entered into an Option Agreement with Torii Pharmaceutical Co., Ltd. (Torii) for the development and commercialization of Verrica’s product candidates for the treatment of molluscum contagiosum and common warts in Japan, including VP-102. Under the terms of the Option Agreement, Torii will pay Verrica USD $500,000 to secure the exclusive option. Torii may exercise the option to obtain exclusive license rights until the later of six months after the effective date of the Option Agreement, or ten business days after the Company notifies Torii that the FDA has accepted for filing the Company’s resubmission of the NDA for VP-102. If Torii exercises the option, the license agreement would provide for Torii to make an up-front payment of $11.5 million, up to an additional $58 million in aggregate payments contingent on achievement of specified development, regulatory, and sales milestones, and tiered transfer price payments for supply of product in the percentage range of the mid-30s to the mid-40s of net sales. Torii would be responsible for all development activities and costs in support of obtaining regulatory approval in Japan.
Two new pooled analyses of the Phase 3 CAMP trials of VP-102 in molluscum were presented as online posters at the virtual American Academy of Dermatology 2020 Annual Meeting. A pre-specified exploratory analysis showed VP-102 brought about a statistically significant percentage of patients with complete molluscum lesion clearance across all lesion count quartiles compared to vehicle. An additional post-hoc analysis showed any patient with baseline characteristics matching study protocol may be a candidate for complete lesion clearance after up to four VP-102 treatments.
Second Quarter 2020 Financial Results
Verrica reported a net loss of $9.4 million for the second quarter of 2020, compared to a $7.0 million net loss for the same period in 2019.
Research and development expenses were $3.5 million in the second quarter of 2020, compared to $3.9 million for the same period in 2019. The decrease was primarily attributable to decreased costs related to Verrica’s development of VP-102 for molluscum contagiosum, partially offset by increased compensation costs.
General and administrative expenses were $5.1 million in the second quarter of 2020, compared to $3.6 million for the same period in 2019. The increase was primarily a result of expenses related to increased headcount, an increase in insurance, professional fees and other operating costs, and an increase in expenses related to pre-commercial activities for VP-102.
Year-to-Date June 2020 Financial Results
Verrica reported a net loss of $19.2 million for the six months ended June 30, 2020, compared to a $14.5 million net loss for the same period in 2019.
Research and development expenses were $8.4 million for the six months ended June 30, 2020, compared to $8.4 million for the same period in 2019.
General and administrative expenses were $10.1 million for the six months ended June 30, 2020, compared to $7.1 million for the same period in 2019. The increase was primarily a result of expenses related to increased headcount, an increase in insurance, professional fees and other operating costs, and an increase in expenses related to pre-commercial activities for VP-102.
As of June 30, 2020, Verrica had aggregate cash, cash equivalents, and marketable securities of $79.6 million, which the Company believes will be sufficient to support planned operations at least through the fourth quarter of 2021.