WEST CHESTER, Pa. - Verrica Pharmaceuticals Inc. (NASDAQ: NASDAQ:VRCA), in collaboration with Japan's Torii Pharmaceutical Co. Ltd., has announced an amendment to their licensing agreement to conduct a global Phase 3 clinical trial for YCANTH®, a treatment for common warts. The trial is set to commence in the first half of 2025, to address a significant unmet medical need in dermatology.
Common warts, caused by the human papillomavirus (HPV), affect approximately 22 million people in the U.S., with children comprising half of those seeking treatment. Currently, there are no FDA-approved treatments for this condition, which Verrica identifies as a potential multibillion-dollar market opportunity.
The amended agreement allows for an equal split in the costs of the upcoming trial between Verrica and Torii, with Torii covering Verrica's share as an offset to future payments based on regulatory milestones and sales in Japan. Additionally, Torii is set to make an $8 million milestone payment to Verrica upon the first patient dosed in Japan during the Phase 3 trial.
The initiation of the global study is pending feedback from the U.S. FDA and Japan's Pharmaceuticals and Medical Device Agency (PMDA) regarding the trial design. Positive results from the trial could lead to a supplemental New Drug Application (sNDA) submission in the U.S. for the approval of YCANTH® for wart treatment, with potential marketing authorizations sought in the European Union and beyond.
YCANTH®, already FDA-approved for treating molluscum contagiosum, is a drug-device combination that delivers a controlled formulation of cantharidin through a single-use applicator. The Phase 2 COVE-1 clinical trial showed promising results, with 51% of subjects achieving complete clearance of all treatable warts by Day 84.
The partnership between Verrica and Torii began in March 2021 when Torii received an exclusive license to develop and commercialize Verrica's product candidates for molluscum contagiosum and common warts in Japan. The companies are now expanding their collaboration to meet the global demand for an effective common wart treatment.
This announcement is based on a press release statement.
InvestingPro Insights
As Verrica Pharmaceuticals Inc. (NASDAQ: VRCA) forges ahead with its plans to address the unmet medical need for common wart treatment through its global Phase 3 clinical trial, the company's financial and market metrics provide a backdrop to its strategic initiatives. According to InvestingPro data, Verrica has a market capitalization of roughly $402.57 million, reflecting the market's valuation of the company's potential. Despite challenges, such as weak gross profit margins indicated by the last twelve months as of Q1 2024, with a gross profit of -$12.83 million and a margin of -143.91%, the company has demonstrated significant returns with a 1-month price total return of 37.14% and a 6-month price total return of 199.37%.
InvestingPro Tips suggest that analysts are optimistic about sales growth for the current year, aligning with Verrica's ambitious clinical development plans. However, it's noteworthy that three analysts have revised their earnings downwards for the upcoming period, potentially reflecting the costs associated with the trial and the risks inherent in drug development. With the stock in overbought territory, according to the Relative Strength Index (RSI), investors may exercise caution. Nevertheless, Verrica's liquid assets exceed its short-term obligations, which could provide some financial stability as it embarks on this critical phase of clinical research.
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