Verrica Pharmaceuticals reports Q3 EPS (43c), consensus (37c)

Reports Q3: Verrica recognized negative net product revenue of $1.9M in the third quarter of 2024 which relates to an increase in our return reserve for estimated returns from certain distributors of $1.7M. The Company determined that it was more than probable that product held by certain distributors will be returned based on the expiration of such product and the lower than previously forecasted sell-through with such distributors. There were no ex-factory sales in the third quarter of 2024 due to slower demand pull through. Verrica recognized collaboration revenue of $0.1M for the three months ended September 30 related to the Collaboration and License Agreement with Torii Pharmaceutical for supplies and development activity with Torii.”Following the close of the third quarter, we took decisive steps to significantly lower our operating expenses, and these actions are expected to materially reduce Verrica’s cash burn rate in the coming year. We are also exploring strategies to strengthen our balance sheet,” said Paul B. Manning, Chairman of the Board of Directors of Verrica. “Importantly, we expect that this leaner and more efficient operating structure will better complement our refined commercial strategy for YCANTH which, as previously announced, will now focus on driving demand for YCANTH across a set of more targeted territories that have a high prevalence of pediatric molluscum and strong reimbursement. As we focus our efforts on a refined commercial strategy, we continue to receive positive feedback on YCANTH from both patients and healthcare professionals.” As Verrica is now through the first year of sales of YCANTH since its commercial launch in September 2023, the Company has decided to announce dispensed applicator units in addition to previous financial disclosures. Dispensed applicator units totaled 7,706 in the third quarter of 2024, compared with 5,975 in the second quarter of 2024. The Company expects existing distributor inventory levels to support most demand for dispensed applicator units into the first quarter of 2025. The Company will continue to assess appropriate metrics for continued transparency of its business.