Verrica Pharmaceuticals Inc (VRCA) Q2 2024 Earnings Call Highlights: Revenue Growth Amid Rising ...

GuruFocus News
3 min read

In This Article:

  • Total Revenue: $5.2 million for Q2 2024.

  • YCANTH Net Revenue: $4.9 million for Q2 2024.

  • Gross Product Margins: 93% for Q2 2024.

  • Research and Development Expenses: $3.3 million for Q2 2024, a decrease of $2.4 million from Q2 2023.

  • Selling, General and Administrative Expenses: $16.5 million for Q2 2024, an increase of $10.6 million from Q2 2023.

  • GAAP Net Loss: $17.2 million or $0.37 per share for Q2 2024.

  • Non-GAAP Net Loss: $14.4 million or $0.31 per share for Q2 2024.

  • Cash and Cash Equivalents: $31.9 million as of June 30, 2024.

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 (NASDAQ:VRCA) 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 (NASDAQ: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 (NASDAQ: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.

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