Verrica Pharmaceuticals Inc.

Previous wording

We are a therapeutics company developing and commercializing medications for the treatment of dermatologic diseases, including skin cancers. Our commercial product and portfolio of product candidates are clinician administered therapies in areas of high unmet need. Our current product portfolio consists of one approved product with several potential follow-on indications, as well as an additional pipeline product. Our commercial product, YCANTH (VP-102), was approved by the U.S. Food and Drug Administration, or FDA, in July 2023 for the treatment of molluscum in adult and pediatric patients two years of age and older. YCANTH (VP-102) is a proprietary drug-device combination that contains a GMP-controlled formulation of cantharidin. We are currently developing YCANTH (VP-102) for a potential follow-on indication for the treatment of common warts. Our second development candidate, VP-315, is an oncolytic peptide-based injectable therapy for the potential treatment of dermatology oncologic conditions, including basal cell carcinoma or BCC.

Current wording

We are a therapeutics company developing and commercializing medications for the treatment of dermatologic diseases, including skin cancers. Our commercial product and portfolio of product candidates are clinician administered therapies in areas of high unmet need. Our current product portfolio consists of one approved product with several potential follow-on indications, as well as an additional pipeline product. Our commercial product, YCANTH (VP-102), was approved by the U.S. Food and Drug Administration, or FDA, in July 2023 for the treatment of molluscum in adult and pediatric patients two years of age and older. YCANTH (VP-102) is a proprietary drug-device combination that contains a GMP-controlled formulation of cantharidin. We are currently developing YCANTH (VP-102) for a potential follow-on indication for the treatment of common warts. Our second development candidate, VP-315, is an oncolytic peptide-based injectable therapy for the potential treatment of dermatology oncologic conditions, initially targeting basal cell carcinoma or BCC.

Previous wording

We commercially launched YCANTH (VP-102) in August 2023 in the United States for the treatment of molluscum. We have built a specialized sales organization consisting of 44 employee sales representatives in the United States focused on pediatric dermatologists, dermatologists, pediatricians and select other primary care healthcare providers.

Current wording

We commercially launched YCANTH (VP-102) in August 2023 in the United States for the treatment of molluscum. We have built a specialized sales organization which as of July 31, 2026, consisted of 45 employee sales representatives in the United States focused on pediatric dermatologists, dermatologists, pediatricians and select other primary care healthcare providers.

Previous wording

We are also advancing YCANTH (VP-102) for common warts through a separate regulatory approval process and have initiated a global Phase 3 program, or the Program, of YCANTH for the treatment of common warts with our partner, Torii. The first patient was dosed in the Program in December 2025. The Program is ongoing and new subjects continue to be enrolled.

Current wording

We are also advancing YCANTH (VP-102) for common warts through a separate regulatory approval process and have initiated a global Phase 3 program, or the Program, of YCANTH for the treatment of common warts with our partner, Torii. The first patient in the first Phase 3 clinical study (COVE-2) in the Program was dosed in the United States in

Previous wording

On October 20, 2025, we announced that the Committee for Medicinal Products for Human Use of the European Medicines Agency provided positive feedback which supports the filing of a Marketing Authorization Application for YCANTH (VP-102) as a treatment for molluscum contagiosum in the EU with no requirement to complete additional clinical studies. We currently retain all global rights to YCANTH outside of Japan and we are exploring non-dilutive partnerships to fund development and commercialization for YCANTH (VP-102) for the treatment of molluscum contagiosum, as well as for common warts if approved, in additional geographic regions outside of the United States and Japan.

Current wording

In July 2026, we entered into an exclusive distribution, marketing and supply agreement with Medomie Pharma Ltd. ("Medomie") pursuant to which Medomie received the exclusive rights to seek regulatory approval for and commercialize YCANTH for the treatment of molluscum contagiosum in Israel. We currently retain all global rights to YCANTH outside of Japan and Israel and we are exploring non-dilutive partnerships to fund development and commercialization for YCANTH (VP-102) for the treatment of molluscum contagiosum, as well as for common warts if approved, in additional geographic regions outside of the United States and Japan.

Previous wording

We are also developing VP-315 for the treatment of BCC and potentially additional dermatological oncology indications. In November 2025, we presented additional data at the Society for Immunotherapy of Cancer 40th Annual Meeting, which showed that VP-315 induced a robust local immune response with both cell-mediated and humoral components, effectively shifting the tumor microenvironment from an immunosuppressive to an anti-tumor state, and additional data regarding the histologic assessment in non-injected lesions that suggests a potential abscopal-like effect. Since that presentation, there has been a growing interest in this program across a broad audience. We believe this reflects the high response rates observed in the study and the potential for VP-315 to change the paradigm for the treatment of basal cell carcinoma, particularly for patients wishing to avoid or reduce their surgical burden and recovery. Our enthusiasm is further supported by the suggested potential for less scarring and improved compliance versus other therapeutic options such as surgery and topicals, as either a primary or neoadjuvant treatment for superficial and nodular tumors. We have also continued to evaluate the abscopal response in 14 observed but not treated lesions in the Phase 2 study and have reported that 3 out of the 14 lesions had complete histologic clearance and that there was a 67% overall reduction in tumor size across all 14 lesions. If this overall product profile could be demonstrated in pivotal Phase 3 testing, we believe VP-315 has the potential to emerge as a non-surgical, immunotherapy treatment option for basal cell carcinoma and other skin cancers.

Current wording

We are also developing VP-315 for the treatment of BCC and potentially additional dermatological oncology indications. In November 2025, we presented additional data at the Society for Immunotherapy of Cancer 40th Annual Meeting, which showed that VP-315 induced a robust local immune response with both cell-mediated and humoral components, effectively shifting the tumor microenvironment from an immunosuppressive to an anti-tumor state, and additional data regarding the histologic assessment in non-injected lesions that suggests a potential abscopal-like effect. Since that presentation, there has been a growing interest in this program across a broad audience. We believe this reflects the high response rates observed in the study and the potential for VP-315 to change the paradigm for the treatment of BCC, particularly for patients wishing to avoid or reduce their surgical burden and recovery. Our enthusiasm is further supported by the suggested potential for less scarring and improved compliance versus other therapeutic options such as surgery and topicals, as either a primary or neoadjuvant treatment for superficial and nodular tumors. We have also continued to evaluate the abscopal response in 14 observed but not treated lesions in the Phase 2 study and have reported that 3 out of the 14 lesions had complete histologic clearance and that there was a 67% overall reduction in tumor size across all 14 lesions. If this overall product profile could be demonstrated in pivotal Phase 3 testing, we believe VP-315 has the potential to emerge as a non-surgical, immunotherapy treatment option for BCC and other skin cancers.

Previous wording

On July 26, 2023, we entered into the Credit Agreement, pursuant to which we borrowed $50.0 million under the Loan Facility (as defined in Note 9), resulting in net proceeds of approximately $44.1 million after payment of certain fees and transaction related expenses. Amounts borrowed under the Loan Facility were scheduled to mature on July 26, 2028. On November 25, 2025, following the Private Placement described below, we fully extinguished the Loan Facility by paying a cash settlement amount of $35.0 million.

Current wording

On July 26, 2023, we entered into the OrbiMed Credit Agreement, pursuant to which we borrowed $50.0 million under the OrbiMed Loan Facility (as defined in Note 2), resulting in net proceeds of approximately $44.1 million after payment of certain fees and transaction related expenses. Amounts borrowed under the OrbiMed Loan Facility were scheduled to mature on July 26, 2028. On November 25, 2025, following the Private Placement described below, we fully extinguished the OrbiMed Loan Facility by paying a cash settlement amount of $35.0 million.

Previous wording

As of March 31, 2026, we had cash of $20.6 million. Based on our current business plan and current capital resources, combined with the uncertainty regarding the availability of additional funding, we have concluded that there is substantial doubt regarding our ability to continue as a going concern within one year after the date these consolidated financial statements are issued. Our consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result should we be unable to continue as a going concern.

Current wording

As of June 30, 2026, we had cash of $11.2 million. Based on our current business plan and current capital resources, including $12.5 million available under the PD Credit Agreement, combined with the uncertainty regarding the availability of additional funding, we have concluded that there is substantial doubt regarding our ability to continue as a going concern within one year after the date these consolidated financial statements are issued. Our consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result should we be unable to continue as a going concern.

Previous wording

We have incurred substantial operating losses since inception and expect to continue to incur significant losses for the foreseeable future and may never become profitable. As of March 31, 2026, we had an accumulated deficit of $334.6 million. We expect to continue to incur significant expenses and operating losses for the foreseeable future. Our expenses may increase in connection with our ongoing activities, as we:

Current wording

We have incurred substantial operating losses since inception and expect to continue to incur significant losses for the foreseeable future and may never become profitable. As of June 30, 2026, we had an accumulated deficit of $347.7 million. We expect to continue to incur significant expenses and operating losses for the foreseeable future. Our expenses may increase in connection with our ongoing activities, as we:

Previous wording

Product revenue, net was $4.3 million for the three months ended March 31, 2026, compared to $3.4 million for the three months ended March 31, 2025. The increase in product revenue, net was primarily related to an increase in deliveries of YCANTH to our distribution partners commensurate with an increase in dispensed applicator unit volume.

Current wording

Product revenue, net was $5.1 million for the three months ended June 30, 2026, compared to $4.5 million for the three months ended June 30, 2025. The increase in product revenue, net was primarily related to an increase in deliveries of YCANTH to our distribution partners commensurate with an increase in dispensed applicator unit volume.

Previous wording

License and collaboration revenue was $0.7 million for the three months ended March 31, 2026, compared to $17,000 for the three months ended March 31, 2025. License and collaboration revenue for the three months ended March 31, 2026 consisted primarily of commercial supply. License and collaboration revenue for the three months ended March 31, 2025 consisted of supplies and development activity with Torii.

Current wording

License and collaboration revenue was $0.8 million for the three months ended June 30, 2026, compared to $8.2 million for the three months ended June 30, 2025. License and collaboration revenue for the three months ended June 30, 2026 consisted primarily of commercial supply. License and collaboration revenue for the three months ended June 30, 2025 consisted of an $8.0 million milestone payment from Torii as well as supplies and development activity.

Previous wording

Cost of product revenue for the three months ended March 31, 2026 and 2025 was $0.5 million and $0.4 million, respectively, consisting primarily of product costs related to the sale of YCANTH (VP-102).

Current wording

Cost of product revenue for the three months ended June 30, 2026 and 2025 was $0.4 million and $0.3 million, respectively, consisting primarily of product costs related to the sale of YCANTH (VP-102).

Previous wording

Cost of license and collaboration revenue was $0.3 million and $14,000 for the three months ended March 31, 2026 and 2025. Cost of license and collaboration revenue consisted of commercial product and supplies and development activity with Torii.

Current wording

Cost of license and collaboration revenue was $0.4 million and $0.2 million for the three months ended June 30, 2026 and 2025. Cost of license and collaboration revenue consisted of commercial product and supplies and development activity with Torii.

Previous wording

Selling, general and administrative expenses were $10.0 million for the three months ended March 31, 2026, compared to $8.8 million for the three months ended March 31, 2025. Excluding the impact of stock-based compensation, the increase of $1.3 million was primarily a result of increased commercial spend, related to the expansion of the sales force.

Current wording

Selling, general and administrative expenses were $10.3 million for the three months ended June 30, 2026, compared to $8.9 million for the three months ended June 30, 2025. Excluding the impact of stock-based compensation, the increase of $1.3 million was primarily due to increased commercial spend related to the expansion of the sales force.

Previous wording

Research and development expenses were $3.9 million for the three months ended March 31, 2026, compared to $2.3 million for the three months ended March 31, 2025. Excluding the impact of stock-based compensation, the increase of $1.5 million was primarily due to the increased costs related to the Program.

Current wording

Research and development expenses were $6.0 million for the three months ended June 30, 2026, compared to $1.8 million for the three months ended June 30, 2025. Excluding the impact of stock-based compensation, the increase of $4.1 million was primarily due to the increased costs related to the Program.

Previous wording

Interest income was $0.2 million and $0.3 million for the three months ended March 31, 2026 and March 31, 2025, respectively. The decrease of $0.1 million was primarily due to lower cash balances.

Current wording

Interest income was $0.1 million and $0.2 million for the three months ended June 30, 2026, and June 30, 2025, respectively. The decrease of $0.1 million was primarily due to lower cash balances.

Previous wording

Interest expense was $0.2 million for the three months ended March 31, 2026 compared to $2.2 million for the three months ended March 31, 2025. The decrease of $2.0 million was primarily related to the settlement of the Loan Facility and termination of the Credit Agreement with OrbiMed in November 2025, as discussed in Note 9 to our consolidated financial statements.

Current wording

Interest expense was $0.2 million for the three months ended June 30, 2026, compared to $2.1 million for the three months ended June 30, 2025. The decrease of $2.0 million was primarily related to the settlement of the OrbiMed Loan Facility and termination of the OrbiMed Credit Agreement in November 2025, as discussed in Note 9 to our consolidated financial statements.

Previous wording

As of March 31, 2026, we had cash of $20.6 million. Since our inception, we have incurred negative cash flows from our operations. We have financed our operations since inception primarily through sales of our convertible preferred stock, the sale of our common stock, and $38.0 million from the Torii Agreement, which includes $8.0 million received in July 2025 and $10.0 million received in September 2025.

Current wording

As of June 30, 2026, we had cash of $11.2 million. Since our inception, we have incurred negative cash flows from our operations. We have financed our operations since inception primarily through sales of our convertible preferred stock, sales of our common stock, and $38.0 million from the Torii Agreement, which includes $8.0 million received in July 2025 and $10.0 million received in September 2025. Subsequent to June 30, 2026, we entered into the PD Credit Agreement that provides for committed borrowings and additional borrowing capacity, subject to certain conditions and covenant requirements.

Previous wording

On July 26, 2023, we entered into the Credit Agreement under which we borrowed $50.0 million, resulting in net proceeds to us of approximately $44.1 million after payment of certain fees and transaction related expenses. Amounts borrowed under the Loan Facility were set to mature on July 26, 2028. Based on our net revenue attributable to YCANTH on a trailing 12-month basis not meeting a specified amount set forth in the Credit Agreement as of December 31, 2024, we became obligated to start making principal payments starting in January 2025. We were obligated to repay the principal amount of the loan on the last day of each month in equal monthly installments through the maturity date, together with the applicable repayment premium and the exit fee. On November 25, 2025, we paid $35.0 million to fully settle the debt related to the Credit Agreement.

Current wording

On July 26, 2023, we entered into the OrbiMed Credit Agreement under which we borrowed $50.0 million, resulting in net proceeds to us of approximately $44.1 million after payment of certain fees and transaction related expenses. Amounts borrowed under the Loan Facility were set to mature on July 26, 2028. Based on our net revenue attributable to YCANTH on a trailing 12-month basis not meeting a specified amount set forth in the OrbiMed Credit Agreement as of December 31, 2024, we became obligated to start making principal payments starting in January 2025. We were obligated to repay the principal amount of the loan on the last day of each month in equal monthly installments through the maturity date, together with the applicable repayment premium and the exit fee. On November 25, 2025, we paid $35.0 million to fully settle the debt related to the OrbiMed Credit Agreement.

Previous wording

During the three months ended March 31, 2026, operating activities used $9.2 million of cash, primarily resulting from a net loss of $9.7 million partially offset by the change in obligation for the R&D funding arrangement of $1.3 million, non-cash stock-based compensation of $0.9 million, and the amortization of right-of-use assets related to operating and financing leases of $0.2 million. Net cash used by changes in operating assets and liabilities consisted primarily of an increase in accounts receivable of $2.5 million and a decrease in accrued expenses and other current liabilities of $0.6 million partially offset by a decrease in prepaid expenses and other assets of $0.4 million and an increase in deferred revenue of $0.2 million.

Current wording

During the six months ended June 30, 2026, operating activities used $18.4 million of cash, primarily resulting from a net loss of $22.8 million partially offset by the non-cash change in obligation for the R&D funding arrangement of $4.2 million, non-cash stock-based compensation of $2.1 million, and the amortization of right-of-use assets related to operating and financing leases of $0.4 million. Net cash used by changes in operating assets and liabilities consisted primarily of an increase in accounts receivable of $5.7 million, an increase in insurance recovery asset of $2.3 million, an increase in inventory of $0.5 million and a decrease in accounts payable of $0.5 million, partially offset by the change in legal settlement accrual of $4.0 million, increase in accrued expenses and other current liabilities of $1.7 million and an increase in deferred revenue of $0.6 million.

Previous wording

During the three months ended March 31, 2025, operating activities used $12.7 million of cash, primarily resulting from a net loss of $9.7 million partially offset by non-cash stock-based compensation of $1.0 million and non-cash interest expense of $0.7 million. Net cash used by changes in operating assets and liabilities consisted primarily of an increase in accounts receivable of $5.6 million partially offset by an increase in accrued expenses of $1.0 million and a decrease in prepaid expenses and other assets of $0.6 million.

Current wording

During the six months ended June 30, 2025, operating activities used $22.7 million of cash, primarily resulting from a net loss of $9.5 million partially offset by non-cash stock-based compensation of $1.9 million and non-cash interest expense of $1.4 million. Net cash used by changes in operating assets and liabilities consisted primarily of an increase in accounts receivable of $9.1 million and billed and unbilled license and collaboration revenue of $8.1 million partially offset by an increase in accounts payable and deferred revenue of $0.9 million and a decrease in prepaid expenses and other assets of $0.8 million.

Previous wording

We did not use any cash in investing activities during the three months ended March 31, 2026 or 2025.

Current wording

We did not use any cash in investing activities during the six months ended June 30, 2026 or 2025.

Previous wording

During the three months ended March 31, 2026, net cash used by financing activities of $0.1 million was primarily due to the repayment of financing leases.

Current wording

During the six months ended June 30, 2026, net cash used by financing activities of $0.2 million was primarily due to the repayment of financing leases.

Previous wording

During the three months ended March 31, 2025, net cash used by financing activities of $4.1 million was primarily due to the repayment of debt related to the Credit Agreement.

Current wording

During the six months ended June 30, 2025, net cash used by financing activities of $8.2 million was primarily due to the repayment of debt related to the OrbiMed Credit Agreement.

Previous wording

We have incurred substantial operating losses since inception and expect to continue to incur significant losses for the foreseeable future and may never become profitable. As of March 31, 2026, we had an accumulated deficit of $334.6 million. We believe our cash of $20.6 million as of March 31, 2026 will be sufficient to support our planned operations into the first quarter of 2027. Based on our current business plan and current capital resources, combined with the uncertainty regarding the availability of additional funding, we have concluded that there is substantial doubt regarding our ability to continue as a going concern within one year after the date these consolidated financial statements are issued. We plan to address the conditions that raise substantial doubt regarding our ability to continue as a going concern by, among other things, obtaining additional funding through equity offerings, debt financing, collaborations, strategic alliances and/or licensing arrangements. Our consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result should we be unable to continue as a going concern. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our capital resources sooner than we expect. Our future capital requirements, and timing, will depend on many factors, including:

Current wording

We have incurred substantial operating losses since inception and expect to continue to incur significant losses for the foreseeable future and may never become profitable. As of June 30, 2026, we had an accumulated deficit of $347.7 million. We believe our cash of $11.2 million as of June 30, 2026, together with the initial committed borrowing of $12.5 million available under the PD Credit Agreement entered into subsequent to June 30, 2026, will not be sufficient to support our planned operations for at least one year from the date these consolidated financial statements are issued. The PD Credit Agreement also provides for up to an additional $15.0 million borrowing capacity that is subject to compliance with certain financial and other covenants and the satisfaction of applicable borrowing conditions. If these conditions are satisfied and the additional borrowings become available, we believe our liquidity would be sufficient to extend our cash runway into 2028. Based on our current business plan and current capital resources, combined with the uncertainty regarding the availability of additional funding, we have concluded that there is substantial doubt regarding our ability to continue as a going concern within one year after the date these consolidated financial statements are issued. We plan to address the conditions that raise substantial doubt regarding our ability to continue as a going concern by, among other things, utilizing borrowings available under the PD Credit Agreement, subject to the terms and conditions thereof, and obtaining additional funding through equity offerings, debt financing, collaborations, strategic alliances and/or licensing arrangements. Our consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result should we be unable to continue as a going concern. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our capital resources sooner than we expect. Our future capital requirements, and timing, will depend on many factors, including: