ｳﾞｪﾘｶﾌｧｰﾏｼｭｰﾃｨｶﾙｽﾞの四半期報告

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


☒		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2025


☐		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____ to _____

Commission File Number: 001-38529

Verrica Pharmaceuticals Inc.

(Exact Name of Registrant as Specified in its Charter)


Delaware	46-3137900
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
44 West Gay Street, Suite 400 West Chester, PA	19380
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (484) 453-3300

N/A

(Former name, former address and former fiscal year, if changed since last report

Securities registered pursuant to Section 12(b) of the Act:

     Title of Each Class

     Trading
Symbol(s)

     Name of Each Exchange on which Registered

     Common Stock, $0.0001 par value

     VRCA

     The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of August 5, 2025, the registrant had 9,445,768 shares of common stock, $0.0001 par value per share, outstanding.

VERRICA PHARMACEUTICALS INC.

QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS


PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	1

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20

Item 3.	Quantitative and Qualitative Disclosures About Market Risks	30

Item 4.	Controls and Procedures	30

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	30

Item 1A.	Risk Factors	31

Item 5.	Other Information	31

Item 6.	Exhibits	31

Signatures		33

PART I. FINANCIAL INFORMATION

Item 1. Unaudited Financial Statements

VERRICA PHARMACEUTICALS INC.

BALANCE SHEETS

(in thousands, except share and per share amounts)

(Unaudited)


	June 30,			December 31,
	2025			2024
ASSETS
Current assets:
Cash and cash equivalents	$	15,396		$	46,329
Accounts receivable		9,193			48
License and collaboration receivable, billed and unbilled		8,178			29
Inventory		2,522			2,463
Prepaid expenses and other current assets		1,492			2,310
Total current assets		36,781			51,179
Property and equipment, net		315			589
Operating lease right-of-use asset		690			836
Finance lease right-of-use asset		945			1,154
Other non-current assets		376			376
Total assets	$	39,107		$	54,134
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable	$	2,321		$	1,896
Accrued expenses and other current liabilities		13,101			13,511
Deferred revenue		481			-
Current portion of long-term debt		12,673			12,938
Operating lease liability		328			315
Finance lease liability		318			352
Total current liabilities		29,222			29,012
Operating lease liability		416			583
Finance lease liability		579			768
Derivative liability		1,796			2,648
Long term debt		24,578			30,983
Total liabilities		56,591			63,994
Commitments and Contingencies (Note 6)
Stockholders’ deficit:
Preferred stock, $0.0001 par value; 10,000,000 shares authorized; no shares issued and outstanding as of June 30, 2025 and December 31, 2024		—			—
Common stock, $0.0001 par value; 200,000,000 authorized; 9,265,034 shares issued and 9,254,520 shares outstanding as of June 30, 2025 and 9,188,513 shares issued and 9,177,999 shares outstanding as of December 31, 2024		1			1
Treasury stock, at cost, 10,514 shares as of June 30, 2025 and December 31, 2024		—			—
Additional paid-in capital		299,080			297,166
Accumulated deficit		(316,565	)		(307,027	)
Total stockholders’ deficit		(17,484	)		(9,860	)
Total liabilities and stockholders’ deficit	$	39,107		$	54,134

The accompanying notes are an integral part of these financial statements.

VERRICA PHARMACEUTICALS INC.

STATEMENTS OF OPERATIONS

(in thousands, except share and per share amounts)

(Unaudited)


	For the Three Months Ended						For the Six Months Ended
	June 30,						June 30,
	2025			2024			2025			2024

Revenue:
Product revenue, net	$	4,534		$	4,892		$	7,956		$	8,124
License and collaboration revenue		8,168			285			8,185			879
Total revenue		12,702			5,177			16,141			9,003
Operating expenses:
Cost of product revenue		340			360			763			906
Cost of collaboration revenue		154			182			168			774
Selling, general and administrative		8,852			16,522			17,700			32,861
Research and development		1,846			3,319			4,130			8,267
Total operating expenses		11,192			20,383			22,761			42,808
Income (loss) from operations		1,510			(15,206	)		(6,620	)		(33,805	)
Other income (expense):
Interest income		228			393			565			991
Interest expense		(2,131	)		(2,368	)		(4,334	)		(4,687	)
Change in fair value of derivative liability		598			—			852			—
Other expense		(1	)		(5	)		(1	)		(16	)
Total other expense, net		(1,306	)		(1,980	)		(2,918	)		(3,712	)
Net income (loss)	$	204		$	(17,186	)	$	(9,538	)	$	(37,517	)

Net income (loss) per share, basic	$	0.02		$	(3.70	)	$	(1.01	)	$	(8.07	)
Weighted-average common shares outstanding, basic		9,488,055			4,650,227			9,485,907			4,649,297

Net income (loss) per share, diluted	$	0.02		$	(3.70	)	$	(1.01	)	$	(8.07	)
Weighted-average common shares outstanding, diluted		9,490,600			4,650,227			9,485,907			4,649,297

The accompanying notes are an integral part of these financial statements.

VERRICA PHARMACEUTICALS INC.

STATEMENTS OF STOCKHOLDERS’ DEFICIT

(in thousands, except share amounts)

(Unaudited)



															Total
	Common Stock				Additional		Subscription			Accumulated			Treasury Stock		Stockholders’
	Shares Issued		Amount		Paid-in Capital		Receivable			Deficit			Shares		(Deficit) Equity

January 1, 2025		9,188,508	$	1	$	297,166	$	—		$	(307,027	)		10,514	$	(9,860	)
Stock-based compensation		—		—		1,026		—			—			—		1,026
Vesting of restricted stock units		1,000		—		—		—			—			—		—
Net loss		—		—		—		—			(9,742	)		—		(9,742	)
March 31, 2025		9,189,508	$	1	$	298,192	$	—		$	(316,769	)		10,514	$	(18,576	)
Stock-based compensation		—		—		888		—			—			—		888
Exercise of pre-funded warrants		70,100		—				—			—			—		—
Vesting of restricted stock units		5,426		—				—			—			—		—
Net income		—		—		—		—			204			—		204
June 30, 2025		9,265,034	$	1	$	299,080	$	—		$	(316,565	)		10,514	$	(17,484	)




January 1, 2024		4,251,869	$	—	$	250,211	$	—		$	(230,448	)		10,514	$	19,763
Stock-based compensation		—		—		2,072		—			—			—		2,072
Exercise of stock options		650		—		8		(4	)		—			—		4
Net loss		—		—		—		—			(20,331	)		—		(20,331	)
March 31, 2024		4,252,519	$	—	$	252,291	$	(4	)	$	(250,779	)		10,514	$	1,508
Stock-based compensation		—		—		2,228		—			—			—		2,228
Exercise of stock options		3,600		—		146		4			—			—		150
Net loss		—		—		—		—			(17,186	)		—		(17,186	)
June 30, 2024		4,256,119	$	-	$	254,665	$	—		$	(267,965	)		10,514	$	(13,300	)

The accompanying notes are an integral part of these financial statements.

VERRICA PHARMACEUTICALS INC.

STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)


	For the Six Months Ended June 30,
	2025			2024
Cash flows from operating activities
Net loss	$	(9,538	)	$	(37,517	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation		1,914			4,300
Depreciation expense		96			227
Non-cash interest expense		1,359			999
Loss on disposal of fixed assets		178			141
Loss on termination of financing lease		4			—
Amortization of operating lease right-of-use asset		146			153
Amortization of finance lease right-of-use asset		165			294
Change in fair value of derivative liability		(852	)		—
Changes in operating assets and liabilities:
Prepaid expenses and other assets		818			(1,612	)
License and collaboration receivable, billed and unbilled		(8,149	)		(15	)
Inventory		(59	)		—
Accounts payable		425			(1,330	)
Deferred revenue		481			—
Accounts receivable		(9,145	)		(5,777	)
Accrued expenses and other current liabilities		(410	)		3,990
Operating lease liability		(154	)		(158	)
Net cash used in operating activities		(22,721	)		(36,305	)
Cash flows from investing activities
Purchases of property and equipment		—			(11	)
Net cash used in investing activities		—			(11	)
Cash flows from financing activities
Proceeds from exercise of stock options		—			154
Payment of debt amendment fees		—			(1,122	)
Repayment of debt		(8,029	)		—
Repayment of finance lease		(183	)		(333	)
Net cash used in financing activities		(8,212	)		(1,301	)
Net decrease in cash and cash equivalents		(30,933	)		(37,617	)
Cash and cash equivalents at the beginning of the period		46,329			69,547
Cash and cash equivalents at the end of the period	$	15,396		$	31,930

Supplemental disclosures
Cash paid for interest	$	2,975		$	3,688
Supplemental disclosure of noncash investing and financing activities:
Property and equipment purchases in accounts payable or accrued expenses and other current liabilities at period end	$	—		$	14
Finance lease liability extinguished as a result of lease termination	$	50		$	—
Right-of-use asset obtained in exchange for lease obligation	$	—		$	1,413

The accompanying notes are an integral part of these financial statements.

VERRICA PHARMACEUTICALS INC.

Notes to Financial Statements

(Unaudited)

Note 1—Organization and Description of Business Operations

Verrica Pharmaceuticals Inc. (the "Company") was formed on July 3, 2013 and is incorporated in the State of Delaware. The Company is a dermatology therapeutics company developing and selling medications for skin diseases requiring medical intervention. On July 21, 2023, the U.S. Food and Drug Administration ("FDA") approved YCANTH (VP-102) topical solution for the treatment of molluscum contagiosum in adult and pediatric patients two years of age and older.

Reverse Stock Split

At the close of trading on July 24, 2025, the Company effected a reverse stock split at a ratio of 1-for-10 shares of its common stock. As a result, every ten shares of the Company’s issued and outstanding common stock were automatically combined into one share. The reverse stock split affected all stockholders uniformly and did not alter any stockholder’s percentage ownership interest in the Company. This split reduced the number of issued shares of common stock from 92,650,404 shares to 9,265,034 shares of common stock. The number of shares of the Company's common stock outstanding was reduced from 92,545,260 to 9,254,520.

No fractional shares were issued as a result of the reverse stock split and the split did not impact the par value of the Company's common stock. Any fractional shares that would otherwise have resulted from the reverse stock split were rounded down to the next whole share.

While the reverse stock split occurred subsequent to the quarter ended June 30, 2025, the accompanying financial statements and footnotes have been adjusted to reflect the impact of the reverse stock split as though it had occurred in all periods presented.

Liquidity and Capital Resources

The Company has incurred substantial operating losses since inception and expects to continue to incur significant losses for the foreseeable future and may never become profitable. As of June 30, 2025, the Company has an accumulated deficit of $316.6 million and had cash outflows from operations of $22.7 million for the six months ended June 30, 2025. Based on the Company’s current business plan and current capital resources, consisting of cash and cash equivalents of $15.4 million as of June 30, 2025, combined with the uncertainty regarding the availability of additional funding and considering its debt obligations, including a requirement to maintain cash, cash equivalents and investments of at least $10.0 million at all times, the Company has concluded that substantial doubt exists regarding its ability to continue as a going concern within one year after the date these financial statements are issued. The Company plans to address the conditions that raise substantial doubt regarding its ability to continue as a going concern by, among other things, obtaining additional funding through equity offerings, debt financing and refinancings, collaborations, strategic alliances and/or licensing arrangements. The 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 financial statements do not include any adjustments to the carrying amounts and classification of recorded assets, liabilities and reported expenses that might result should the Company be unable to continue as a going concern.

There can be no assurance that the Company will be able to obtain additional liquidity when needed or under acceptable terms, if at all. If the Company is unable to raise capital when needed or on attractive terms, the Company would be forced to delay, reduce or eliminate commercialization efforts and development programs.

On June 27, 2025, the Company entered into the Second Amendment to the Collaboration and License Agreement (the "Second Amendment") with Torii Pharmaceutical Co., Ltd. ("Torii"), amending the Collaboration and License Agreement dated as of March 17, 2021, between the Company and Torii, as amended on May 14, 2024 (as amended, the "Torii Agreement"). The Second Amendment provided for the acceleration of an $8.0 million milestone payment which is presented as a license and collaboration receivable as of June 30, 2025. The $8.0 million milestone payment was paid to the Company in July 2025, following Torii's approval of the study plan and execution of the CRO agreement. The milestone payment was initially conditioned upon the dosing of the first patient as part of the Company's global Phase 3 program of VP-102 (TO-208 in Japan) in common warts (the "Phase 3 Program"), which it is sponsoring with Torii. Torii and the Company will equally split the cost of the Phase 3 Program, with Torii paying the first $40.0 million of out-of-pocket costs when due, and the Company repaying to Torii half of such costs over time. To repay its portion of the costs of the Phase 3 Program, the Company will offset amounts otherwise owed to Torii for future royalties, certain transfer price payments and remaining development milestones. To the extent that the cost of the Phase 3 Program exceeds $40.0 million, the Company will pay such excess costs, up to a specified maximum amount, and Torii will repay to the Company half of such costs. Torii will also pay to the Company a $10.0 million milestone payment (triggered upon the approval of TO-208, referred to as YCANTH in the U.S., for molluscum contagiosum in Japan), in cash, rather than as an offset to the Phase 3 Program as originally contemplated under the Torii Agreement. In addition, the Company will initiate a manufacturing transfer to Torii, expected to take several years, for Torii to be able to produce YCANTH (TO-208) applicators to be sold in Japan. In the interim, the Company will continue to receive from Torii a transfer price for applicators manufactured by the Company's manufacturing partners.

After the transfer of at least one component of the manufacturing process, the Company will begin receiving royalties related to net sales in Japan of applicators manufactured by Torii and/or its manufacturing partners in lieu of the transfer price for completed applicators.

The Company plans to secure additional capital in the future through equity or debt financings, partnerships, or other sources to carry out the Company’s planned commercial and development activities. If the Company is unable to raise capital when needed or on attractive terms, the Company would be forced to delay, reduce or eliminate continued commercialization efforts or research and development programs. In addition, the amount of proceeds the Company may be able to raise pursuant to its currently effective shelf registration statement on Form S-3 is limited. The Company is subject to the general instructions of Form S-3 known as the "baby shelf rules." Under these rules, the amount of funds the Company can raise through primary public offerings of securities in any 12-month period using its registration statement on Form S-3 is limited to one-third of the aggregate market value of the shares of the Company's common stock held by its non-affiliates. Therefore, the Company will be limited in the amount of proceeds it is able to raise by selling its securities using its Form S-3 until such time as the Company's public float exceeds $75.0 million.

On July 26, 2023, the Company entered into a Credit Agreement, pursuant to which the Company borrowed $50.0 million under the Loan Facility (as defined in Note 10) resulting in net proceeds of approximately $44.1 million after payment of certain fees and transaction related expenses. Amounts borrowed under the Loan Facility will mature on July 26, 2028, and payments of principal were originally not required under the Credit Agreement. Based on the Company's net revenue attributable to YCANTH on a trailing 12-month basis not meeting a specified amount set forth in the Credit Agreement (as amended) as of December 31, 2024, the Company became obligated to start making principal payments starting in January 2025. The Company is 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, the exit fee and interest.

The Credit Agreement contains customary events of default, including, but not limited to, nonpayment of principal, interest, fees or other amounts; material inaccuracy of a representation or warranty; failure to perform or observe covenants; cross-defaults with certain other indebtedness; bankruptcy and insolvency events; material monetary judgment defaults; impairment of any material definitive loan documentation; other material adverse effects; key permit and other regulatory events; key person events; and change of control. In addition, the Credit Agreement contains a financial covenant that the Company must maintain a liquidity of at least $10.0 million and that the Company’s quarterly and annual financial statements not be subject to any qualification or statement which is of a "going concern" or similar nature. On June 10, 2025, the requirement to deliver financial statements that are not subject to a qualification of a "going concern" was waived for the financial statements for the quarters ending June 30, 2025, September 30, 2025 and the quarter and the year ending December 31, 2025. If the requirement to deliver financial statements that are not subject to a qualification of a "going concern" is not waived for additional future periods or if additional financing is not raised to meet the liquidity test, the Company may be in default of the Credit Agreement in the near-term. Upon the occurrence of an event of default (subject to notice and grace periods), additional interest of 4% per annum applies and obligations under the Credit Agreement could be accelerated. As of June 30, 2025, the Company is in compliance with all applicable covenants under the Credit Agreement.

Note 2—Significant Accounting Policies

Basis of Presentation

The accompanying unaudited interim financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP"). Any reference in these notes to applicable guidance is meant to refer to the authoritative United States generally accepted accounting principles as found in the Accounting Standards Codification ("ASC") and Accounting Standards Update ("ASU") of the Financial Accounting Standards Board ("FASB").

Unaudited Interim Financial Statements

The accompanying unaudited interim financial statements have been prepared by the Company in accordance with US GAAP for interim information and pursuant to the rules and regulations of the SEC. Accordingly, certain information and footnote disclosures normally included in audited financial statements prepared in accordance with US GAAP have been condensed or omitted pursuant to such rules and regulations. These unaudited consolidated interim financial statements should be read in conjunction with the audited financial statements and related notes for the year ended December 31, 2024, filed as part of the Company's Annual Report.

These unaudited interim financial statements have been prepared on the same basis as the audited financial statements and, in management’s opinion, include all adjustments, consisting of only normal recurring adjustments, necessary for the fair presentation of the financial information for the interim periods. However, the results of operations for any interim period are not necessarily indicative of the results to be expected for the full fiscal year.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates and assumptions are based on current facts, historical experience as well as other pertinent industry and regulatory authority information, results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of revenues and expenses that are not readily apparent from other sources. Actual results may differ materially and adversely from these estimates. To the extent there are material differences between the estimates and actual results, the Company’s future results of operations will be affected.

Segments

Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker "CODM" in making decisions regarding resource allocation and assessing performance.

The Company views its operations and manages its business in one operating segment engaged in developing and selling medications for skin diseases requiring medical intervention. The Company’s Chief Executive Officer ("CEO"), as the CODM, regularly reviews the entity-wide financial and operational performance as a single unit. No financial information is disaggregated into separate lines of businesses and the Company does not differentiate the activities of its headquarters from the overall performance of the Company. The CEO makes resource allocation and business process decisions regarding the overall level of resources available and how to best deploy these resources.

The single segment’s principal measure of segment profit and loss is consolidated net income (loss). The CEO considers actual and forecasted consolidated revenues, significant expenses, and consolidated net loss when evaluating performance. Significant expenses are amounts that are regularly provided to the CEO and included in consolidated net loss and include selling, general and administrative expenses and research and development expenses.

The table below summarizes the significant revenue and expense categories regularly reviewed by the CEO for the three and six months ended June 30, 2025 and 2024:


	For the Three Months Ended						For the Six Months Ended
	2025			2024			2025			2024
Revenue	$	12,702		$	5,177		$	16,141		$	9,003
Less:
Selling, general and administrative:
Commercial (including payroll)		4,346			9,214			8,628			18,393
General and administrative (including payroll)		3,918			5,593			7,699			11,131
Stock-based compensation		588			1,715			1,373			3,337
Total selling, general and administrative		8,852			16,522			17,700			32,861
Research and development:
YCANTH (VP-102)		340			639			711			1,219
VP-315		33			462			194			2,850
Common warts		(93	)		160			(66	)		160
Stock-based compensation		300			513			541			963
Other unallocated expenses		1,266			1,545			2,750			3,075
Research and development		1,846			3,319			4,130			8,267
Cost of revenue		494			542			931			1,680
Other segment items (a)		1,306			1,980			2,918			3,712
Net income (loss)	$	204		$	(17,186	)	$	(9,538	)	$	(37,517	)

(a) Other segment items include interest income, interest expense, change in fair value of embedded derivative liability and other expenses.

Cash and Cash Equivalents

The Company considers all highly-liquid investments purchased with original maturities of 90 days or less at acquisition to be cash equivalents. Cash and cash equivalents include cash held in banks and money market mutual funds.

Cash and cash equivalents are financial instruments that are potentially subject to concentrations of credit risk. The Company’s deposits are in accounts at large financial institutions, and amounts may exceed federally insured limits. The Company believes it is not exposed to significant credit risk due to the financial strength of the depository institutions in which the funds are held. The Company has no financial instruments with off-balance sheet risk of loss.

Cash and cash equivalents as of June 30, 2025, includes a cash deposit of $0.2 million with Bank of America as required under the Commercial Credit Card Program with a balance equal to the outstanding credit limit on commercial credit cards.

Fair Value of Financial Instruments and Credit Risk

As of June 30, 2025, the Company’s financial instruments included cash equivalents, accounts payable, and notes payable. The carrying amount of cash equivalents and accounts payable approximated fair value, given their short-term nature. The carrying value of the Company's long term note payable (Note 10) approximates fair value as the interest rate is reflective of current market rates on debt with similar terms and conditions.

Cash equivalents subject the Company to concentrations of credit risk. However, the Company invests its cash in accordance with a policy objective that seeks to ensure both liquidity and safety of principal. The policy limits investments to instruments issued by the U.S. government, certain SEC registered money market funds that invest only in U.S. government obligations and various other low-risk liquid investment options, and places restrictions on portfolio maturity terms.

Accounts receivable trade subjects the Company to concentrations of credit risk as all of the Company's revenue is from sales of a single product, YCANTH (VP-102), sold to several pharmaceutical wholesalers/distributors (the "Customers").

Accounts Receivable

The Company had $9.2 million in accounts receivable as of June 30, 2025. As of June 30, 2025, the Company had no allowance for credit losses. An allowance for credit losses is determined based on the Company's assessment of the creditworthiness and financial condition of its customers, aging of receivables, as well as the general economic environment. Any allowance would reduce the net receivables to the amount that is expected to be collected. Current payment terms for YCANTH (VP-102) are generally 60 days from the shipment date.

Inventory

The Company values inventory at the lower of cost or net realizable value. Inventory cost is determined using the specific identification method. The Company regularly reviews its inventory quantities and, when appropriate, records a provision for obsolete and excess inventory to derive the new cost basis, which takes into account the Company’s sales forecast and corresponding expiry dates. The Company did not recognize any material obsolete inventory costs as cost of product revenue for the three and six months ended June 30, 2025 and 2024, respectively, due to the expiration of Product (as defined below).

Financial Instruments – Derivatives

The Company evaluates its financial instruments to determine if the financial instrument itself or any embedded components of a financial instrument potentially qualify as derivatives required to be separately accounted for in accordance with ASC Topic 815 - Derivatives and Hedging.

The derivative liability relates to a bifurcated settlement feature of the Company’s OrbiMed Credit Agreement (Note 10). The derivative liability is subject to re-measurement at each reporting period, at each balance sheet date and any change in fair value is recognized as a component of change in fair value of derivative liability in the statements of operations. The Company will continue to adjust the liability for changes in fair value until the final repayment of the Term Loan.

Revenue

The Company recognizes revenue from sales of a single product, YCANTH (VP-102) (the "Product") in accordance with ASC Topic 606 – Revenue from Contracts with Customers. YCANTH (VP-102) became available for commercial sale and shipment to patients with a prescription in the United States in the third quarter of 2023. The Company sells the Product to Customers who in turn sell the Product directly to clinics, hospitals, and federal healthcare programs. Revenue is recognized as the Product is physically delivered to the Customers.

Gross product sales are reduced by corresponding gross-to-net ("GTN") estimates using the expected value method, resulting in the Company’s reported “Product revenue, net” in the accompanying statements of operations. Product revenue, net reflects the amount the Company ultimately expects to realize in net cash proceeds, taking into account the current period gross sales and related cash receipts and the subsequent cash disbursements on these sales that the Company estimates for the various GTN categories discussed below. The GTN estimates are based upon information received from external sources, such as written or oral information obtained from our customers with respect to their period-end inventory levels and sales to end-users during the period, in combination with management’s informed judgments. Due to the inherent uncertainty of these estimates, the actual amount of product returns, government chargebacks, prompt pay discounts, commercial rebates, Medicaid rebates, co-pay assistance and distribution, data, and group purchasing organizations ("GPO") administrative fees may be materially above or below the amount estimated. Variance between actual amounts and estimated amounts may result in prospective adjustments to reported net product revenue.

Each of the GTN estimate categories are discussed below:

Product Returns Allowances: The Customers are contractually permitted to return purchased Product in certain circumstances. The Company records discrete reserves if Product held by customers, forecasted sales and expiration of Product warrant a reserve. As historical data for returns of the Product becomes available over time, the Company will utilize historical return rates of the Product in making its estimates. Returned Product is typically destroyed, since substantially all returns are due to expiry and cannot be resold.

Government Chargebacks: The Product is subject to pricing limits under certain federal government programs, including Medicare and the 340B drug pricing program. Qualifying entities (the "End-Users") purchase the Product from the Customers at their applicable qualifying discounted price. The chargeback amount the Company incurs represents the difference between the Company’s contractual sales price to the Customers and the end-user’s applicable discounted purchase price under the government program.

Medicaid Rebates: The Product is subject to state government-managed Medicaid programs, whereby rebates are issued to participating state governments. These rebates arise when a patient treated with the Product is covered under Medicaid, resulting in a discounted price for the Product under the applicable Medicaid program. The Medicaid rebate accrual calculations require the Company to project the magnitude of its sales, by state, that will be subject to these rebates.

Patient Assistance: The Company offers a voluntary co-pay patient assistance program intended to provide financial assistance to eligible patients with a prescription drug co-payment required by payors and coupon programs for cash payors. The calculation of the current liability for this assistance is based on an estimate of claims and the cost per claim that the Company expects to receive associated with YCANTH (VP-102) that has been recognized as revenue but remains in the distribution channel inventories at the end of each reporting period.

Distribution, Data, and GPO Administrative Fees: Distribution, data, and GPO administrative fees are paid to authorized wholesalers/distributors of the Company’s products for various commercial services including contract administration, inventory management, delivery of end-user sales data, and product returns processing. These fees are based on a contractually-determined percentage of the Company’s applicable sales.

Collaboration Revenues

The Company has generated collaboration revenue through its licensing and collaboration arrangements. The terms of the arrangements typically include payments to the Company of one or more of the following: nonrefundable, up-front license fees; regulatory and commercial milestone payments; payments for manufacturing supply services; materials shipped to support development; and royalties on net sales of licensed products.

In determining the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements, the Company performs the following steps:

(i) identification of the promised goods or services in the contract;

(ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract;

(iii) measurement of the transaction price, including the constraint on variable consideration;

(iv) allocation of the transaction price to the performance obligations; and

(v) recognition of revenue when (or as) the Company satisfies each performance obligation. The Company’s revenue arrangements may include the following:

Up-front License Fees: If a license is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenues from non-refundable, up-front fees allocated to the license when the license is transferred to the licensee and the licensee is able to use and benefit from the license. For licenses that are bundled with other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue from non-refundable, up-front fees. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition.

Milestone Payments: At the inception of an agreement that includes regulatory or commercial milestone payments, the Company evaluates whether each milestone is considered probable of being achieved and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the control of the Company or the licensee, such as regulatory approvals, are not considered probable of being achieved until those approvals are received. At each reporting period, the Company assesses the probability of achievement of each milestone under its current agreements. The Company recognized $8.0 million in development milestone revenue during the three months ended June 30, 2025 because it became probable that a development milestone would be met and that a significant reversal of revenue would not occur related to the previously constrained portion of the transaction price.

Royalties: If the Company is entitled to receive sales-based royalties from its collaborator, including milestone payments based on the level of sales, and the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur, provided the reported sales are reliably measurable, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied).

Manufacturing Supply and Research Services: Arrangements that include a promise for supply of drug substance or drug product for either clinical development or commercial supply at the licensee’s discretion are generally considered as options. The Company assesses if these options provide a material right to the licensee and if so, they are accounted for as separate performance obligations. If not, the supply services are recognized as collaboration revenue as the Company provides the services.

The Company receives payments from its licensees based on schedules established in each contract. Amounts are recorded as accounts receivable when the Company’s right to consideration is unconditional. The Company does not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the licensees and the transfer of the promised goods or services to the licensees will be one year or less.

Deferred Revenue: The Company records deferred revenue when a customer prepays for goods or services, or when the Company has an unconditional right to bill but has not yet delivered the performance obligation. Deferred revenue is primarily comprised of deposits on customer product orders yet to be delivered. The Company expects to recognize all of the deferred revenue within the next 6 months.

Cost of Product Revenue

Cost of product revenue includes the cost of inventory sold, which includes direct manufacturing, production and packaging materials for YCANTH (VP-102) sales.

Cost of Collaboration Revenue

Cost of collaboration revenue consisted of supplies and development activity with Torii.

Fair Value Measurement

ASC Topic 820, Fair Value Measurement, provides guidance on the development and disclosure of fair value measurements. Under this accounting guidance, fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability.

The accounting guidance classifies fair value measurements in one of the following three categories for disclosure purposes:

Level 1: Quoted prices in active markets for identical assets or liabilities.

Level 2: Inputs other than Level 1 prices for similar assets or liabilities that are directly or indirectly observable in the marketplace.

Level 3: Unobservable inputs which are supported by little or no market activity and values determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation.

At June 30, 2025, the Company’s financial instruments included cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, notes payable and a derivative liability. The carrying amount of accounts payable, accounts receivable and accrued expenses approximates fair value due to the short-term maturities of these instruments. Notes payable are carried at amortized cost, which approximates fair value.

The following table presents the Company’s fair value information for liabilities measured at fair value on a recurring basis. The Company had no liabilities measured at fair value on a recurring basis at June 30, 2024.


	As of June 30, 2025
	(Level 1)		(Level 2)		(Level 3)
Recurring fair value measurements
Derivative liability	$	—	$	—	$	1,796

The following is a rollforward of the derivative liability:


Balance at December 31, 2024	$	2,648
Change in fair value		(852	)
Balance at June 30, 2025	$	1,796

The Company estimated the fair value of the derivative liability using a lattice model with an interest rate lattice consistent with the Hull-White model. The derivative liability was classified within Level 3 of the fair value hierarchy due to the use of unobservable inputs. The key inputs into the lattice model for the derivative liability were as follows:


	June 30, 2025
Expected term (years)		3.07
Credit spread		12.3	%

Net Income (Loss) Per Share

Basic net income (loss) per share is computed by dividing net income (loss) attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period including pre-funded warrants to purchase shares of common stock that were issued in an underwritten offering in February 2023 and November 2024 (Note 7). The pre-funded warrants to purchase common stock are included in the calculation of basic and diluted net loss per share as the exercise price of $0.0001 per share is non-substantive and is virtually assured. Diluted net income (loss) per share includes the effect from the potential exercise of securities, such as stock options, unvested restricted stock units, and common stock warrants, which would result in the issuance of incremental shares of common stock, using the treasury stock method. Potential shares of common stock are excluded from the diluted per share calculation when their effect is anti-dilutive, including in periods of net loss or when inclusion does not result in a decrease in earnings per share.


	For the Three Months Ended June 30,					For the Six Months Ended June 30,
	2025		2024			2025			2024

Net income (loss) attributable to common stockholders - basic	$	204	$	(17,186	)	$	(9,538	)	$	(37,517	)
Weighted average common shares outstanding - basic		9,488,055		4,650,227			9,485,907			4,649,297
Net income (loss) per share - basic	$	0.02	$	(3.70	)	$	(1.01	)	$	(8.07	)


Net income (loss) attributable to common stockholders - diluted	$	204	$	(17,186	)	$	(9,538	)	$	(37,517	)
Weighted average common shares outstanding - basic		9,488,055		4,650,227			9,485,907			4,649,297
Restricted stock units		1,715		-			-			-
Stock options		830		-			-			-
Warrants		-		-			-			-
Weighted average common shares outstanding - diluted		9,490,600		4,650,227			9,485,907			4,649,297
Net income (loss) per share - diluted	$	0.02	$	(3.70	)	$	(1.01	)	$	(8.07	)

The table below provides potential shares outstanding that were not included in the computation of diluted net loss per common share, as the inclusion of these securities would have been anti-dilutive:


	June 30,
	2025		2024
Shares issuable upon exercise of stock options		1,066,643		665,652
Non-vested shares under restricted stock grants		25,000		83,400
Shares issuable upon exercise of warrants pursuant to debt financing		51,855		51,855
Shares issuable upon exercise of warrants pursuant to Torii amendment		50,000		50,000
Shares issuable upon exercise of Series A and B warrants pursuant to 2024 equity financing		4,775,406		—
Total		5,968,904		850,907

Recent Accounting Pronouncements

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 is intended to improve income tax disclosure requirements by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) the disaggregation of income taxes paid by jurisdiction. The guidance makes several other changes to the income tax disclosure requirements as well. The guidance in ASU 2023-09 will be effective for annual reporting periods in fiscal years beginning after December 15, 2024. The Company is currently evaluating the impact that the adoption of ASU 2023-09 will have on its financial statements and disclosures.

In November 2024, the FASB issued ASU No. 2024-03, Disaggregation of Income Statement Expenses. ASU 2024-03 requires additional disclosure of specific types of expenses included in the expense captions presented on the face of the income statement as well as disclosures about selling expenses. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted. The requirements will be applied prospectively with the option for retrospective application. The Company is currently evaluating the impact that the adoption of ASU 2024-03 will have on its financial statements and disclosures.

Note 3 —Inventory

Upon FDA approval of YCANTH (VP-102) for the treatment of molluscum contagiosum on July 21, 2023, the Company began capitalizing the purchases of saleable inventory of YCANTH (VP-102) from suppliers. Inventory consisted of the following (in thousands):


	June 30,		December 31,
	2025		2024
Raw materials	$	1,008	$	1,082
Work in process		523		664
Finished goods		991		717
Total inventory	$	2,522	$	2,463

Note 4—Property and Equipment

Property and equipment, net consisted of (in thousands):



	June 30,			December 31,
	2025			2024
Machinery and equipment	$	737		$	1,164
Office equipment		326			326
Office furniture and fixtures		303			303
Leasehold improvements		54			54
		1,420			1,847
Accumulated depreciation		(1,105	)		(1,258	)
Total property and equipment, net	$	315		$	589

Depreciation expense for the three months ended June 30, 2025 and 2024 was $45,000 and $0.1 million, respectively. Depreciation expense for the six months ended June 30, 2025 and 2024 was $0.1 million and $0.2 million, respectively.

Note 5—Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following (in thousands):


	June 30, 2025		December 31, 2024
Gross to net reserves	$	9,609	$	10,316
Compensation and related costs		1,850		1,173
Commercial-related costs		349		407
Professional fees		381		618
Clinical trials and drug development		546		892
Other current liabilities		366		105
Total accrued expenses and other current liabilities	$	13,101	$	13,511

Note 6—Commitments and Contingencies

Litigation

On June 6, 2022, plaintiff Kranthi Gorlamari ("Plaintiff") filed a putative class action complaint captioned Gorlamari v. Verrica Pharmaceuticals Inc., et al., in the U.S. District Court for the Eastern District of Pennsylvania against us and certain of our current and former officers and directors ("Defendants"). On January 12, 2023, the Plaintiff filed an amended complaint alleging that Defendants violated federal securities laws by, among other things, failing to disclose certain manufacturing deficiencies at the facility where our contract manufacturer produced bulk solution for the YCANTH (VP-102) drug device and that such deficiencies posed a risk to the prospects for regulatory approval of YCANTH (VP-102) for the treatment of molluscum. The amended complaint seeks unspecified compensatory damages and other relief on behalf of Plaintiff and all other persons and entities which purchased or otherwise acquired our securities between May 19, 2021 and May 24, 2022 (the "Putative Class Period").

On January 12, 2024, the Court granted in part and denied in part Defendants’ motion to dismiss the amended complaint. The Court held that Plaintiff’s claims relating to statements made in May and June 2021 were sufficiently pled, but dismissed Plaintiff’s claims relating to all other statements made during the Putative Class Period. On January 26, 2024, Plaintiff filed a second amended complaint in an attempt to cure certain of the deficiencies identified in the January 12, 2024 ruling. Defendants’ motion to dismiss the second amended complaint was fully briefed as of April 22, 2024. On September 3, 2024, the Court granted in part and denied in part Defendants’ motion to dismiss the second amended complaint. The Court dismissed Plaintiff’s claims related to one of the two individual defendants but held that Plaintiff’s claims against the Company and the other individual defendant were sufficiently pled.

On July 21, 2025, the Court granted the parties' joint stipulation in the Cohen and Cannon derivative lawsuits to consolidate the two actions and stay the consolidated action. On July 24, 2025, the plaintiff in the Bonaccorso derivative lawsuit filed a corrected complaint to clarify that the named plaintiff "is not Joseph (Joe) Bonaccorso, the former Chief Commercial Officer" of the Company. On July 29, 2025, the plaintiff in the Bonaccorso derivative lawsuit filed a notice voluntarily dismissing the action without prejudice.

The Company is also involved in ordinary, routine legal proceedings that are not considered by management to be material. In the opinion of Company counsel and management, the ultimate liabilities resulting from such legal proceedings will not materially affect the financial position of the Company or its results of operations or cash flows.

Note 7—Stockholders’ Deficit

Common Stock

The Company had authorized 200,000,000 shares of common stock, $0.0001 par value per share, as of June 30, 2025 and December 31, 2024. Each share of common stock is entitled to one vote. Common stock owners are entitled to dividends when funds are legally available and declared by the Board.

November 2024 Offering

In November 2024, the Company sold 4,551,824 shares of its common stock, and in lieu of common stock to certain investors, pre-funded warrants to purchase 223,595 shares of its common stock, with accompanying Series A warrants to purchase 2,387,703 shares of its common stock at an exercise price of $10.68 per share of common stock and Series B warrants to purchase 2,387,703 shares of its common stock at an exercise price of $13.35 per share of common stock (the "November 2024 Offering"). The offering price was $8.90 per share of common stock and accompanying Series A and Series B warrants, or $8.899 per pre-funded warrant and accompanying Series A and Series B warrants. The Series A warrants expire in November 2025 and the Series B warrants expire in November 2029. The November 2024 Offering resulted in net proceeds of approximately $39.6 million after deducting underwriting discounts and commissions, and offering expenses of $2.9 million. Pre-funded warrants for 66,095 and 70,100 shares of common stock were exercised in December 2024 and April 2025, respectively.

Warrants

The following table summarizes the Company’s outstanding warrants, all of which are exercisable for shares of common stock:


	June 30, 2025
	Number of warrants		Exercise Price		Expiration Date
Equity classified warrants
Pre-funded warrants issued pursuant to 2023 underwritten public offering		148,148	$	0.0001	No expiration
Warrants issued in connection with OrbiMed debt facility		51,855	$	34.5040	7/26/2033
Warrants issued in connection with Torii amendment		50,000	$	95.6000	5/14/2034
Pre-funded warrants issued pursuant to 2024 underwritten public offering		87,400	$	0.0001	No expiration
Series A warrants issued pursuant to 2024 underwritten public offering		2,387,703	$	10.6800	11/21/2025
Series B warrants issued pursuant to 2024 underwritten public offering		2,387,703	$	13.3500	11/20/2029

The OrbiMed warrants are eligible for a price adjustment if the Company consummates any share distribution at a price per common shares less than the exercise price. As a result of the November 2024 Offering, the OrbiMed warrant exercise price was adjusted down to $34.50 per share. The Torii warrants become exercisable at different clinical milestones related to the global Phase 3 Program for common warts (See Note 11 for more details).

Note 8—Stock-Based Compensation

Stock-based compensation expense, which includes expense for both options and restricted stock units, has been reported in the Company’s statements of operations as follows (in thousands):


	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2025		2024		2025		2024
Selling, general and administrative	$	588	$	1,715	$	1,373	$	3,337
Research and development		300		513		541		963
Total stock-based compensation	$	888	$	2,228	$	1,914	$	4,300

Stock Options

The following table summarizes the Company’s stock option activity for the six months ended June 30, 2025:


						Weighted average
				Weighted average		remaining contractual		Aggregate intrinsic
	Number of shares			exercise price		term (in years)		value
Outstanding as of December 31, 2024		800,544		$	49.50		7.3
Granted		549,670			6.29
Exercised		—			—				—
Forfeited		(105,476	)		25.12
Expired		(178,095	)		96.69
Outstanding as of June 30, 2025		1,066,643		$	21.76		8.8	$	5,893
Options vested and exercisable as of June 30, 2025		233,313		$	62.75		6.1	$	—

The aggregate intrinsic value in the above table is calculated as the difference between fair market value of the Company’s common stock price and, as of June 30, 2025, the exercise price of the stock options. The weighted average grant date fair value per share for the employee and non-employee stock options granted during the six months ended June 30, 2025 was $4.29. As of June 30, 2025, the total unrecognized compensation related to unvested stock option awards granted was $5.4 million, which the Company expects to recognize over a weighted-average period of 2.43 years.

Restricted Stock Units

Compensation expense related to RSUs is recognized in the Company’s statements of operations based on the fair market value at the date of grant over the period expected to vest. As of June 30, 2025, the remaining unrecognized compensation expense related to the RSUs was $30,586, which the Company expects to recognize over a weighted average service period of 0.27 years.

The following table summarizes the Company's restricted stock unit activity for the six months ended June 30, 2025:


				Weighted Average
				Grant Date Fair
	Number of Shares			Value
Nonvested as of December 31, 2024		38,426		$	22.40
Granted		—			—
Forfeited		(7,000	)		48.00
Vested		(6,426	)		48.00
Nonvested as of June 30, 2025		25,000		$	17.50

Note 9—Leases

The Company leases office space located in West Chester, Pennsylvania that serves as the Company’s headquarters. The initial term expires on September 1, 2027. Base rent over the initial term is approximately $2.4 million, and the Company is also responsible for its share of the landlord’s operating expenses.

The Company leased office space in Scotch Plains, New Jersey under an agreement classified as an operating lease, which commenced on May 1, 2022 and was due to expire on April 30, 2025. In September 2024, the Company terminated the agreement effective November 30, 2024. No termination fees were incurred.

The Company entered into a fleet program to provide vehicles for its sales force. The vehicles are leased for a term of 52 months and classified as finance leases. On December 31, 2024, the Company reduced the right-of-use assets by $1.6 million and right-of use liabilities by $1.5 million related to these finance leases.

There were no additional right-of-use assets or right-of-use liabilities recorded during the three and six months ended June 30, 2025.

The components of lease expense are as follows (in thousands):


	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2025		2024		2025		2024
Finance lease cost:
Amortization right-of-use assets	$	81	$	156	$	165	$	294
Interest on lease liabilities	$	18	$	46		38		90
Total finance lease costs	$	99	$	202	$	203	$	384
Operating lease:
Operating lease costs	$	85	$	97	$	171	$	194

Maturities of the Company’s operating leases, excluding short-term leases, as of June 30, 2025 are as follows (in thousands):


	Operating			Finance
2025 (remaining 6 months)	$	181		$	198
2026		366			344
2027		246			320
2028		-			133
Thereafter		-			-
Total lease payments		793			995
Less imputed interest		(49	)		(98	)
Lease liability	$	744		$	897

The weighted average remaining lease term and discount rates for the Company's leases as of June 30, 2025 are as follows:



	Operating			Finance
Weighted average remaining lease term (years)		2.17			2.96
Weighted average discount rate		6.25	%		7.76	%

Note 10—Debt

On July 26, 2023 (the "Closing Date"), the Company entered into a Credit Agreement (the "Credit Agreement"), by and between the Company, as borrower, and OrbiMed Royalty & Credit Opportunities IV, LP, a Delaware limited partnership (the "Initial Lender"), as a lender, and each other lender that may from time to time become a party thereto (each, including the Initial Lender, and together with their affiliates, successors, transferees and assignees, the "Lenders"), and OrbiMed Royalty & Credit Opportunities IV, LP, as administrative agent for the Lenders (in such capacity, the "Administrative Agent"). The Credit Agreement provides for a five-year senior secured credit facility in an aggregate principal amount of up to $125.0 million (the "Loan Facility"). The Company borrowed $50.0 million under the Credit Agreement on July 26, 2023, resulting in net proceeds of approximately $44.1 million after payment of certain fees and transaction related expenses. The Company will not be able to borrow any additional funds under the Credit Agreement.

Amounts borrowed under the Loan Facility will mature on July 26, 2028 (the "Maturity Date"). Based on the Company's 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, the Company became obligated to start making principal payments starting on January 1, 2025. The Company is 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. Beginning December 31, 2024, the Company recorded a derivative liability related to the accelerated settlement of the Credit Agreement.

During the term of the Loan Facility, interest payable in cash by the Company shall accrue on any outstanding balance due at a rate per annum equal to the higher of (x) the Secured Overnight Financing Rate ("SOFR") rate (which is the forward-looking term rate for a one-month tenor based on the secured overnight financing rate administered by the CME Group Benchmark Administration Limited) and (y) 4.00% plus, in either case, 8.00%. During an event of default, any outstanding amount under the Loan Facility will bear interest at a rate of 4.00% in excess of the otherwise applicable rate of interest. The Company paid or will pay certain fees with respect to the Loan Facility, including an upfront fee, an unused fee on the undrawn portion of the Loan Facility, an administration fee, a prepayment premium and an exit fee, as well as certain other fees and expenses of the Administrative Agent and the Lenders.

The Credit Agreement contains customary events of default, including, but not limited to, nonpayment of principal, interest, fees or other amounts; material inaccuracy of a representation or warranty; failure to perform or observe covenants; cross-defaults with certain other indebtedness; bankruptcy and insolvency events; material monetary judgment defaults; impairment of any material definitive loan documentation; other material adverse effects; key permit and other regulatory events; key person events; and change of control. In addition, the Credit Agreement contains a financial covenant that the Company must maintain a liquidity of at least $10.0 million and that the Company’s quarterly and annual financial statements not be subject to any qualification or statement which is of a "going concern" or similar nature. The qualification of a "going concern" was waived for the financial statements for the quarters ending June 30, 2025, September 30, 2025 and the quarter and year ending December 31, 2025. Upon the occurrence of an event of default (subject to notice and grace periods), additional interest of 4% per annum applies and obligations under the Credit Agreement could be accelerated. As of June 30, 2025, the Company was in compliance with all covenants under the Credit Agreement, as amended.

On the Closing Date, the Company also issued the Initial Lender warrants to purchase up to 51,855 shares of the Company’s common stock, at an exercise price of $60.26 per share, which have a term of 10 years from the issuance date.

On each of December 20, 2023 and January 31, 2024, the Company entered into an amendment to the Credit Agreement in order to extend a deadline for a specified regulatory milestone. For the second amendment on January 31, 2024, the Company paid an up front amendment fee of $250,000 and agreed to make an additional payment of $250,000 if a specified regulatory milestone is not achieved by a specified date.

On May 6, 2024, the Company entered into an amendment to the Credit Agreement (the "Third Amendment") pursuant to which the Lenders waived the going concern requirement under Section 7.1(b) of the Credit Agreement with respect to the financial statements for the quarter ended March 31, 2024. In connection with the Third Amendment, the Company paid an amendment fee of $100,000.

On June 26, 2024, the Company entered into an amendment to the Credit Agreement (the "Fourth Amendment") changing the commencement date of the Revenue Test to September 30, 2024. In connection with the Fourth Amendment, the Company paid an amendment fee of $500,000.

On August 2, 2024, the Company entered into the fifth amendment and waiver to the Credit Agreement (the "Fifth Amendment") pursuant to which the Lenders waived the going concern requirement under Section 7.1(b) of the Credit Agreement with respect to the financial statements for the quarters ended June 30, 2024 and September 30, 2024, the commencement date for the Revenue Test was changed to December 31, 2024 and the exit fee for the Initial Loans (as defined in the Credit Agreement) was increased from 5.00% to 7.50%.

On February 18, 2025, the Company entered into a waiver to the Credit Agreement pursuant to which the Lenders waived specified covenants under the Credit Agreement, including the requirements under Section 7.1(b) and Section 7.1(c) of the Credit Agreement that there be no "going concern" qualification with respect to the financial statements for the year ended December 31, 2024 and the quarter ended March 31, 2025.

On June 10, 2025, the Company entered into the sixth amendment and waiver to the Credit Agreement (the "Sixth Amendment") pursuant to which the Lenders waived specified covenants under the Credit Agreement, including the requirements under Section 7.1(b) and Section 7.1(c) of the Credit Agreement that there be no "going concern" qualification with respect to the financial statements for the quarters ending June 30, 2025, September 30, 2025 and the quarter and year ending December 31, 2025. In connection with the Sixth Amendment, the Company paid an amendment fee of $110,465.

For the three and six months ended June 30, 2025, the Company recognized interest expense related to the Credit Agreement of $2.1 million and $4.3 million, of which $1.4 million and $2.9 million, respectively, was interest on the term loan and $0.7 million and $1.4 million, respectively, was non-cash interest expense related to the amortization of deferred debt issuance costs and accrual of the final payment fee. For the three and six months ended June 30, 2024, the Company recognized interest expense related to the Credit Agreement of $2.3 million and $4.6 million, of which $1.8 million and $3.6 million was interest on the term loan and $0.5 million and $1.0 million was non-cash interest expense related to the amortization of deferred debt issuance costs and accrual of the final payment fee.

The following table summarizes the composition of debt reflected on the balance sheet as of June 30, 2025 (in thousands):


	As of June 30, 2025
	Short-term			Long-term			Total
Gross proceeds	$	13,953		$	29,070		$	43,023
Accrued final payment fee		1,047			2,180			3,227
Accrued repayment fee		581			47			628
Unamortized debt discount and issuance costs		(2,908	)		(6,719	)		(9,627	)
Total debt, net	$	12,673		$	24,578		$	37,251

The aggregate maturities of debt are as follows:




	Debt		Final payment fee		Repayment fee		Total
2025 (6 months remaining)	$	6,976	$	524	$	302	$	7,802
2026		13,953		1,047		326		15,326
2027		13,953		1,047		-		15,000
2028		8,141		609		-		8,750
Total	$	43,023	$	3,227	$	628	$	46,878

Note 11—License and Collaboration Agreements

Torii Agreements

On March 17, 2021, the Company entered into a collaboration and license agreement (the "Torii Agreement") with Torii, pursuant to which the Company granted Torii an exclusive license to develop and commercialize the Company’s product candidates that contain a topical formulation of cantharidin for the treatment of molluscum contagiosum and common warts in Japan, including YCANTH (VP-102). Additionally, the Company granted Torii a right of first negotiation with respect to additional indications for the licensed products and certain additional products for use in the licensed field, in each case in Japan.

The Company previously received milestone payments from Torii in prior periods totaling $20.0 million. As of June 30, 2025, the Company is entitled to receive from Torii an additional $50.0 million in aggregate payments, including the $8.0 million milestone payment received in July 2025, contingent on achievement of specified development, regulatory, and sales milestones, in addition to transfer price payments for supply of product, which will begin to be replaced by royalty payments as part of the manufacturing transfer. The transfer and royalty payments shall be payable, on a product-by-product basis, beginning on the first commercial sale of such product and ending on the latest of (a) expiration of the last-to-expire valid claim contained in certain licensed patents in Japan that cover such product, (b) expiration of regulatory exclusivity for the first indication for such product in Japan, and, (c) (i) with respect to the first product, ten years after first commercial sale of such product, and, (ii) with respect to any other product, the later of (x) ten years after first commercial sale of the first product and (y) five years after first commercial sale of such product.

The Torii Agreement expires on a product-by-product basis upon expiration of Torii’s obligation under the agreement to make transfer price payments for such product. Torii has the right to terminate the agreement upon specified prior written notice to us. Additionally, either party may terminate the agreement in the event of an uncured material breach of the agreement by, or insolvency of, the other party. The Company may terminate the agreement in the event that Torii commences a legal action challenging the validity, enforceability or scope of any licensed patents.

On March 7, 2022, the Company executed a Clinical Supply Agreement with Torii, whereby the Company will supply product to Torii for use in clinical trials and other development activities. The Company recognized collaboration revenue of $0.2 million and $0.3 million for the three months ended June 30, 2025 and 2024 respectively and $0.2 million and $0.9 million for the six months ended June 30, 2025 and 2024 related to supplies and development activity pursuant to this agreement. The costs of collaboration revenue consists of expenses incurred by the Company for manufacturing supply to support development and testing services pursuant to the Torii Clinical Supply Agreement.

On May 14, 2024, the Company entered into the First Amendment to the Torii Agreement (the "First Amendment"). Pursuant to the First Amendment, the Company and Torii will equally split the cost of a global Phase 3 program of YCANTH (VP-102) for the treatment of common warts (the "Program"), with Torii paying all the costs when due and the Company repaying Torii half of the costs (the "Company Portion"). The results of the Program will be utilized by the Company in the filing of its new drug application with the FDA for YCANTH (VP-102) for the treatment of common warts. The Company Portion accrues interest annually at the greater of (i) the one-month SOFR plus 2% and (ii) 6%.

Torii may recoup our share of the costs plus applicable interest against certain development milestone payments in the Torii Agreement that would otherwise be due to the Company under the terms of the Torii Agreement. In addition, if Torii has not received payment or other recoupment in full of the Company Portion plus applicable interest within 60 months after the date on which Torii made its first payment for the Program costs, Torii may invoice the Company for the remaining Company Portion plus applicable interest. No material costs were incurred during the six months ended June 30, 2025.

In conjunction with the First Amendment, the Company issued Torii a warrant to purchase up to 50,000 shares of the Company’s common stock at an exercise price per share of $95.60. The warrant has a term of ten years and is exercisable only with respect to the shares that have vested as of the date of exercise. The shares underlying the warrant will vest as follows: one-third on the date the first patient is dosed in the Program, one-third on the date that the database lock with respect to the Trial occurs, and one-third on the date the Company submits a new drug application to the FDA for YCANTH (VP-102) for the treatment of common warts.

On June 27, 2025, the Company entered into the Second Amendment to the Torii Agreement with Torii. The Second Amendment provided for the acceleration of an $8.0 million milestone fee payment, which was paid to the Company in July 2025. Under the Second Amendment, Torii has also agreed to pay to the Company a $10.0 million milestone payment (triggered upon the approval of TO-208, referred to as YCANTH in the U.S., for molluscum contagiosum in Japan), in cash, rather than as an offset to costs of the Phase 3 Program as originally contemplated under the Torii Agreement. In addition, the Company will initiate a manufacturing transfer to Torii, expected to take several years, for Torii to be able to produce YCANTH (TO-208) applicators to be sold in Japan. In the interim, the Company will continue to receive from Torii a transfer price for applicators manufactured by the Company's manufacturing partners. After the transfer of at least one component of the manufacturing process, the Company will begin receiving royalties related to net sales in Japan of applicators manufactured by Torii and/or its manufacturing partners in lieu of the transfer price for completed applicators.

Lytix Agreement

In August 2020, the Company entered into an exclusive license agreement with Lytix Biopharma AS ("Lytix") for the use of licensed technology, referred to as VP-315, to research, develop, manufacture, have manufactured, use, sell, have sold, offer for sale, import, and otherwise commercialize products for use in all malignant and pre-malignant dermatological indications, other than metastatic melanoma and metastatic Merkel cell carcinoma (the "Lytix Agreement"). As part of the Lytix Agreement, the Company has paid Lytix milestone fees of $3.6 million in previous periods. The Company is also obligated to pay up to $111.0 million contingent on achievement of specified development, regulatory, and sales milestones, as well as tiered royalties based on worldwide annual net sales ranging in the low double digits to the mid-teens, subject to certain customary reductions. The Company’s obligation to pay royalties expires on a country-by-country and product-by-product basis on the later of the expiration or abandonment of the last to expire licensed patent covering VP-315 anywhere in the world and expiration of regulatory exclusivity for VP-315 in such country. Additionally, all upfront fees and milestone-based payments received by the Company from a sublicensee will be treated as net sales and will be subject to the royalty payment obligations under the Lytix Agreement, and all royalties received by the Company from a sublicensee shall be shared with Lytix at a rate that is initially 50% but decreases based on the stage of development of VP-315 at the time such sublicense is granted.

Note 12 – Related Parties

Our Chief Executive Officer, Jayson Rieger, and our Chief Operating Officer, David Zawitz, are former employees of, and current consultants to, PBM Capital Group, LLC, an entity controlled by Paul B. Manning, a significant investor of the Company.

Note 13 – Subsequent Event

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law. This legislation includes changes to U.S. federal tax law, which may be subject to further clarification and the issuance of interpretive guidance. The Company is assessing the legislation and its effect on its financial statements. However, due to the existence of a full valuation allowance against the Company's U.S. federal deferred tax assets, the Company does not currently expect the enactment of the OBBBA to have a material impact on its financial statements. The Company will continue to analyze the OBBBA and will reflect any impact in the period of enactment.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with (i) our unaudited interim financial statements and the related notes thereto included elsewhere in this Quarterly Report on Form 10-Q and (ii) our audited financial statements and notes thereto and management’s discussion and analysis of financial condition and results of operations for the years ended December 31, 2024 and 2023 included in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the Securities and Exchange Commission (the "SEC") on March 11, 2025. Our financial statements have been prepared in accordance with U.S. GAAP. Unless otherwise indicated, all information in this Quarterly Report on Form 10-Q gives effect to a 1-for-10 reverse stock split of our common stock that became effective on July 24, 2025, and all references to shares of common stock outstanding and per share amounts give effect to the reverse stock split.

We own various U.S. federal trademark applications and unregistered trademarks, including our company name and YCANTH. All other trademarks or trade names referred to in this Quarterly Report on Form 10-Q are the property of their respective owners. Solely for convenience, the trademarks and trade names in this report are referred to without the symbols ® and ™, but such references should not be construed as an indication that their respective owners will not assert, to the fullest extent under applicable law, their rights thereto.

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (the "Exchange Act"), including, without limitation, statements regarding our expectations, beliefs, intentions or future strategies that are signified by the words "expect," "anticipate," "intend," "believe," "may," "plan," "seek" or similar language. All forward-looking statements included in this document are based on information available to us on the date hereof, and we assume no obligation to update any such forward-looking statements. Our business and financial performance are subject to substantial risks and uncertainties. Our actual results could differ materially from those discussed in these forward-looking statements. In evaluating our business, you should carefully consider the information set forth in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 11, 2025, in this Quarterly Report under Part II - Item 1A "Risk Factors," and in our other filings with the SEC.

Overview

We are a dermatology therapeutics company developing and selling medications for skin diseases requiring medical intervention. 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 contagiosum 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.

Commercial Product

We commercially launched YCANTH (VP-102) in August 2023 in the United States for the treatment of molluscum contagiosum. We have built a specialized sales organization consisting of 37 employee sales representatives in the United States focused on pediatric dermatologists, dermatologists, and select pediatricians.

Additional Pipeline Products

YCANTH (VP-102) - Treatment of Common Warts

We also plan to advance YCANTH (VP-102) for common warts through a separate regulatory approval process and have begun the Phase 3 Program with our partner, Torii. We expect to dose the first patient in the Phase 3 Program in the United States in the fourth quarter of 2025.

In the future, we also intend to pursue commercialization for YCANTH (VP-102) for the treatment of molluscum contagiosum, as well as YCANTH (VP-102) for common warts if approved, in additional geographic regions, either alone or together with a strategic partner.

VP-315 - Treatment of Basal Cell Carcinoma

We are also developing VP-315 for the treatment of BCC and potentially additional dermatological oncology indications. We held an end-of-Phase 2 meeting with the FDA in the first quarter and expect to report additional data by the end of 2025, which we believe will help inform next steps for the advancement of the program into Phase 3 clinical trials.

Liquidity Overview

Since our inception in 2013, our operations have focused on developing YCANTH (VP-102), organizing and staffing our company, business planning, raising capital, establishing our intellectual property portfolio and conducting clinical trials. We have funded our operations primarily through the sale of equity and equity-linked securities and through borrowings under loan agreements.

On July 26, 2023, we entered into a Credit Agreement, pursuant to which we borrowed $50.0 million under the Loan Facility (as defined in Note 10), resulting in net proceeds of approximately $44.1 million after payment of certain fees and transaction related expenses. Amounts borrowed under the Loan Facility will 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 on January 1, 2025. We are 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.

The Credit Agreement contains customary events of default, including, but not limited to, nonpayment of principal, interest, fees or other amounts; material inaccuracy of a representation or warranty; failure to perform or observe covenants; cross-defaults with certain other indebtedness; bankruptcy and insolvency events; material monetary judgment defaults; impairment of any material definitive loan documentation; other material adverse effects; key permit and other regulatory events; key person events; and change of control. In addition, the Credit Agreement contains a financial covenant that we must maintain a liquidity of at least $10.0 million and that our quarterly and annual financial statements not be subject to any qualification or statement which is of a "going concern" or similar nature. The requirement to deliver financial statements that do not include a qualification of a "going concern" was waived for the financial statements for the quarters ending June 30, 2025, September 30, 2025 and the quarter and year ending December 31, 2025. If the requirement to deliver financial statements that do not include a qualification of a "going concern" is not waived for additional future periods or if additional financing is not raised to meet the liquidity test, we may be in default of the debt agreement in the near-term. Upon the occurrence of an event of default (subject to notice and grace periods), additional interest of 4% per annum applies and obligations under the Credit Agreement could be accelerated. As of June 30, 2025, we were in compliance with all covenants under the Credit Agreement as amended.

In November 2024, we closed an underwritten offering of 4,551,824 shares of our common stock (and, in lieu of common stock to certain investors that so chose, pre-funded warrants to purchase 223,595 shares of our common stock, or the pre-funded warrants), and in either case, accompanying Series A warrants to purchase 2,387,703 shares of our common stock at an exercise price of $10.68 per share of common stock, or the Series A Warrants, and Series B warrants to purchase 2,387,703 shares of our common stock at an exercise price of $13.35 per share of common stock, or the Series B Warrants, at a combined public offering price of $8.90 per share of common stock and accompanying Series A and Series B Warrants (or $8.899 per Pre-Funded Warrant and accompanying Series A and Series B Warrants). The offering resulted in net proceeds of $39.6 million, after deducting underwriting discounts and commissions, and offering expenses.

As of June 30, 2025, we had cash and cash equivalents of $15.4 million. Based on our current business plan and current capital resources, combined with the uncertainty regarding the availability of additional funding and considering our debt obligations, including a requirement to maintain cash, cash equivalents and investments of at least $10.0 million at all times, we have concluded that there is substantial doubt regarding our ability to continue as a going concern within one year after the date these financial statements are issued. 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, 2025, we had an accumulated deficit of $316.6 million. Our 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 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 plan to secure additional capital in the future through equity or debt financings, partnerships, or other sources to carry out our planned commercial and development activities. If we are unable to raise capital when needed or on attractive terms, we would be forced to delay, reduce or eliminate continued and future commercialization efforts and/or research and development programs.

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:

•

continue to establish our commercialization infrastructure and scale up external manufacturing and distribution capabilities to commercialize YCANTH (VP-102) for the treatment of molluscum contagiosum and product candidates for which we may obtain regulatory approval; continue our ongoing clinical programs evaluating VP-102 for the treatment of common warts and VP-315 for the treatment of BCC and potentially additional dermatological oncology indications;

•

pursue regulatory approvals for YCANTH (VP-102) for the treatment of common warts and VP-315 for the treatment of BCC;

•

adapt our regulatory compliance efforts to incorporate requirements applicable to marketed products;

•

maintain, expand and protect our intellectual property portfolio;

•

hire and retain clinical, manufacturing, commercialization and scientific personnel; and

•

incur additional legal, accounting and other expenses while operating as a public company.

Reverse Stock Split

On July 25, 2025, we effected a one-for-ten (1-for-10) reverse stock split (the "Reverse Stock Split"). Pursuant to their terms, a proportionate adjustment was made to the per share exercise price and number of shares issuable under all of the Company’s outstanding options and warrants, and the number of shares authorized for issuance pursuant to the Company’s equity incentive plans have been reduced proportionately. The Reverse Stock Split did not reduce the number of authorized shares of common stock and did not alter the par value.

All share and per share amounts of common stock presented in this Quarterly Report on Form 10-Q have been retroactively adjusted to reflect the Reverse Stock Split.

Critical Accounting Estimates

Our management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities as of the dates of the balance sheets and the reported amounts of expenses during the reporting periods. In accordance with GAAP, we evaluate our estimates and judgments on an ongoing basis.

A summary of our significant accounting policies are disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024. However, we believe that the additional accounting policies disclosed in Note 2 to our financial statements are important to understanding and evaluating our reported financial results.

Components of Results of Operations

Product Revenue, Net

We recognize revenue from sales of YCANTH (VP-102), or the Product, in accordance with ASC Topic 606 – Revenue from Contracts with Customers. YCANTH (VP-102) is available for commercial sale and shipment for the treatment of patients by a healthcare provider in the United States. We sell the Product to several pharmaceutical wholesalers and distributors, or the Customers, who in turn sell the Product directly to clinics, hospitals, and federal healthcare programs. Revenue is recognized as the Product is physically delivered to the Customers.

Gross product sales are reduced by corresponding gross-to-net, or GTN, estimates using the expected value method, resulting in our reported “Product revenue, net” in the accompanying statements of operations. Product revenue, net reflects the amount we ultimately expect to realize in net cash proceeds, taking into account the current period gross sales and related cash receipts and the subsequent cash disbursements on these sales that we estimate for the various GTN categories as well as adjustments for any potential future product returns from customers. The GTN estimates are based upon information received from external sources, such as written or oral information obtained from our customers with respect to their period-end inventory levels and sales to end-users during the period, in combination with management’s informed judgments. Due to the inherent uncertainty of these estimates, the actual amount of product returns, government chargebacks, prompt pay discounts, commercial rebates, Medicaid rebates, co-pay assistance and distribution, data, and group purchasing organizations, or GPOs, administrative fees may be materially above or below the amount estimated. Variance between actual amounts and estimated amounts may result in prospective adjustments to reported net product revenue.

License and Collaboration Revenue

License and collaboration revenue represents revenue from the Torii Agreement pursuant to which we granted Torii an exclusive license to develop and commercialize our product candidates that contain a topical formulation of cantharidin for the treatment of molluscum contagiosum and common warts in Japan, including YCANTH (VP-102).

Operating Expenses

Cost of Product Revenue

Cost of product revenue includes the cost of inventory sold, which includes direct manufacturing and supply chain costs. Cost of product revenue also includes period costs related to excess and obsolete inventory write-downs.

Cost of Collaboration Revenue

The costs of collaboration revenue consists of payments for manufacturing supply to support development and testing services pursuant to the Torii Clinical Supply Agreement.

Selling, General and Administrative Expenses

Selling, general and administrative expenses consist principally of salaries and related costs for personnel in sales, executive and administrative functions, including stock-based compensation, travel expenses and recruiting expenses. Other selling, general and administrative expenses include cost of samples, sponsorships, consumer and health care professional marketing and advertising expense, insurance costs, and professional fees for audit, tax and legal services.

Research and Development Expenses

Research and development expenses consist of expenses incurred in connection with the discovery and development of YCANTH (VP-102) for the treatment of molluscum contagiosum, potential follow-on indications for YCANTH (VP-102), including common warts, and our other product candidates in addition to VP-315 for BCC. We expense research and development costs as incurred. These expenses include:

•

expenses incurred under agreements with contract research organizations, or CROs, as well as investigative sites and consultants that conduct our clinical trials and preclinical studies;

•

manufacturing and supply scale-up expenses and the cost of acquiring and manufacturing preclinical and clinical trial supply and commercial supply, including manufacturing validation batches;

•

outsourced professional scientific development services;

•

employee-related expenses, which include salaries, benefits and stock-based compensation;

•

expenses relating to regulatory activities; and

•

laboratory materials and supplies used to support our research activities.

Research and development activities are central to our business model. Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. We expect our research and development expenses to increase over the next several years as we increase personnel costs, including stock-based compensation, initiate and conduct clinical trials of YCANTH (VP-102) in patients with common warts and VP-315 for BCC and potentially additional dermatological oncology indications and prepare regulatory filings for our product candidates.

The successful development of our product candidates is highly uncertain. At this time, we cannot reasonably estimate or know the nature, timing and costs of the efforts that will be necessary to complete the remainder of the development of, or when, if ever, material net cash inflows may commence from YCANTH (VP-102) or our other product candidates. This uncertainty is due to the numerous risks and uncertainties associated with the duration and cost of clinical trials, which vary significantly over the life of a project as a result of many factors, including:

•

the number of clinical sites included in the trials;

•

the length of time required to enroll suitable patients;

•

the number of patients that ultimately participate in the trials;

•

the number of doses patients receive;

•

the duration of patient follow-up; and

•

the results of our clinical trials.

Our expenditures are subject to additional uncertainties, including the manufacturing process for our product candidates, the terms and timing of regulatory approvals, and the expense of filing, prosecuting, defending and enforcing any patent claims or other intellectual property rights. We may never succeed in achieving regulatory approval for our product candidates. We may obtain unexpected results from our clinical trials.

We may elect to discontinue, delay or modify clinical trials of our product candidates. A change in the outcome of any of these variables with respect to the development of a product candidate could mean a significant change in the costs and timing associated with the development of that product candidate. For example, if the FDA or other regulatory authorities were to require us to conduct clinical trials beyond those that we currently anticipate, or if we experience significant delays in enrollment in any of our clinical trials, we could be required to expend significant additional financial resources and time on the completion of clinical development.

Results of Operations for the Three Months Ended June 30, 2025 and 2024

The following table summarizes our results of operations (in thousands):


	For the Three Months Ended June 30,
	2025			2024			Change
Total revenue
Product revenue, net	$	4,534		$	4,892		$	(358	)
License and collaboration revenue		8,168			285			7,883
Total revenue		12,702			5,177			7,525
Operating expenses:
Cost of product revenue		340			360			(20	)
Cost of collaboration revenue		154			182			(28	)
Selling, general and administrative		8,852			16,522			(7,670	)
Research and development		1,846			3,319			(1,473	)
Total operating expenses		11,192			20,383			(9,191	)
Income (loss) from operations		1,510			(15,206	)		16,716
Other income (expense):
Interest income		228			393			(165	)
Interest expense		(2,131	)		(2,368	)		237
Change in fair value of derivative liability		598			—			598
Other expense		(1	)		(5	)		4
Total other expense, net		(1,306	)		(1,980	)		674
Net income (loss)	$	204		$	(17,186	)	$	17,390

Product Revenue, Net

Product revenue, net was $4.5 million for the three months ended June 30, 2025, compared to $4.9 million for the three months ended June 30, 2024. Product revenue, net, related to the delivery of YCANTH (VP-102) to our distribution partners. For the three months ended June 30, 2024, product revenue, net included an initial one-time stock-in related to the expansion of our specialty distribution network to bring on an additional specialty distributor, which represented approximately 54% of product revenue, net in the period.

License and Collaboration Revenue

License and collaboration revenue was $8.2 million for the three months ended June 30, 2025, compared to $0.3 million for the three months ended June 30, 2024. 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. Collaboration revenue for the three months ended June 30, 2024 consisted of supplies and development activity with Torii.

Cost of Product Revenue

Cost of product revenue for the three months ended June 30, 2025 and 2024 was $0.3 million and $0.4 million, respectively, consisting primarily of product costs related to the sale of YCANTH (VP-102).

Cost of Collaboration Revenue

Cost of collaboration revenue was $0.2 million for the three months ended June 30, 2025 and 2024. Cost of collaboration revenue consisted of supplies and development activity with Torii.

Selling, General and Administrative Expenses

Selling, general and administrative expenses were $8.9 million for the three months ended June 30, 2025, compared to $16.5 million for the three months ended June 30, 2024. The decrease of $7.7 million was primarily due to lower expenses related to commercial activities for YCANTH (VP-102), including decreases in compensation, stock compensation, benefits and travel due to reduced sales force of $5.7 million, decreased marketing and sponsorship costs of $1.1 million, and decreased legal costs of $0.9 million.

Research and Development Expenses

Research and development expenses were $1.8 million for the three months ended June 30, 2025, compared to $3.3 million for the three months ended June 30, 2024. The decrease of $1.5 million was primarily related to decreased chemistry, manufacturing and controls (CMC) and medical affairs costs of $0.6 million, as well as decreased clinical operations costs of $0.8 million, mostly related to the clinical trial for VP-315.

The following table summarizes our research and development expense by product candidate or, for unallocated expenses, by type, for the three months ended June 30, 2025 and 2024. Unallocated expenses include compensation and other personnel-related costs (in thousands):


	For the Three Months Ended June 30,
	2025			2024		Change
YCANTH (VP-102)	$	340		$	639	$	(299	)
VP-315		33			462		(429	)
Common warts		(93	)		160		(253	)
Stock based compensation		300			513		(213	)
Other unallocated expenses		1,266			1,545		(279	)
Research and development expense	$	1,846		$	3,319	$	(1,473	)

Interest Income

Interest income was $0.2 million for the three months ended June 30, 2025 compared to $0.4 million for the three months ended June 30, 2024. The decrease of $0.2 million was primarily due to a lower cash balance.

Interest Expense

Interest expense was $2.1 million for the three months ended June 30, 2025 compared to $2.4 million for the three months ended June 30, 2024 and consisted of interest expense on the OrbiMed Credit Agreement as described in Note 10 to our financial statements for each period. The decrease of $0.2 million was related to a lower outstanding principal balance under our Credit Agreement with OrbiMed.

Change in Fair Value of Derivative Liability

The change in the fair value of the derivative liability for the three months ended June 30, 2025 and 2024 was $0.6 million and $0 million, respectively, due to principal payments starting in January 2025, relating to the Credit Agreement.

Results of Operations for the Six Months Ended June 30, 2025 and 2024

The following table summarizes our results of operations (in thousands):


	For the Six Months Ended June 30,
	2025			2024			Change
Revenue:
Product revenue, net	$	7,956		$	8,124		$	(168	)
License and collaboration revenue		8,185			879			7,306
Total revenue		16,141			9,003			7,138
Operating expenses:
Cost of product revenue		763			906			(143	)
Cost of collaboration revenue		168			774			(606	)
Selling, general and administrative		17,700			32,861			(15,161	)
Research and development		4,130			8,267			(4,137	)
Total operating expenses		22,761			42,808			(20,047	)
Loss from operations		(6,620	)		(33,805	)		27,185
Other income (expense):
Interest income		565			991			(426	)
Interest expense		(4,334	)		(4,687	)		353
Change in fair value of derivative liability		852			-			852
Other expense		(1	)		(16	)		15
Total other expense, net		(2,918	)		(3,712	)		794
Net loss	$	(9,538	)	$	(37,517	)	$	27,979

Product Revenue, Net

Product revenue, net was $8.0 million for the six months ended June 30, 2025, compared to $8.1 million for the six months ended June 30, 2024. For the six months ended June 30, 2024, product revenue, net included an initial one-time stock-in related to the expansion of our specialty distribution network to bring on an additional specialty distributor, which represented approximately 32% of product revenue, net in the period.

License and Collaboration Revenue

License and collaboration revenue was $8.2 million for the six months ended June 30, 2025, compared to $0.9 million for the six months ended June 30, 2024. License and collaboration revenue for the six months ended June 30, 2025 consisted of an $8.0 million milestone payment from Torii as well as supplies and development activity. License and collaboration revenue for the six months ended June 30, 2024 consisted of supplies and development activity with Torii.

Cost of Product Revenue

Cost of product revenue for the six months ended June 30, 2025 and 2024 was $0.8 million and $0.9 million, respectively, consisting primarily of product costs related to the sale of YCANTH (VP-102).

Cost of Collaboration Revenue

Cost of collaboration revenue was $0.2 million for the six months ended June 30, 2025, compared to $0.8 million for the six months ended June 30, 2024. The decrease of $0.6 million was primarily due to decreased manufacturing supply required to support development and testing services pursuant to the Torii Clinical Supply Agreement.

Selling, General and Administrative Expenses

Selling, general and administrative expenses were $17.7 million for the six months ended June 30, 2025, compared to $32.9 million for the six months ended June 30, 2024. The decrease of $15.2 million was primarily due to lower expenses related to commercial activities for YCANTH (VP-102), including decreases in compensation, stock compensation, recruiting fees, benefits and travel due to reduced sales force of $10.6 million, decreased marketing and sponsorship costs of $3.2 million and decreased legal, general and administrative costs of $1.4 million.

Research and Development Expenses

Research and development expenses were $4.1 million for the six months ended June 30, 2025, compared to $8.3 million for the six months ended June 30, 2024. The decrease of $4.1 million was primarily related to decreased clinical trial costs for VP-315 of $2.6 million and decreased regulatory and medical affairs costs of $0.7 million.

The following table summarizes our research and development expense by product candidate or, for unallocated expenses, by type, for the six months ended June 30, 2025 and 2024. Unallocated expenses include compensation and other personnel-related costs (in thousands):


	For the Six Months Ended June 30,
	2025			2024		Change

VP-315	$	194		$	2,850	$	(2,656	)
YCANTH (VP-102)		711			1,219		(508	)
Common warts		(66	)		160		(226	)
Stock based compensation		541			963		(422	)
Other unallocated expenses		2,750			3,075		(325	)
Research and development expense	$	4,130		$	8,267	$	(4,137	)

Interest Income

Interest income was $0.6 million for the six months ended June 30, 2025 compared to $1.0 million for the six months ended June 30, 2024. The decrease of $0.4 million was primarily due to a lower cash balance.

Interest Expense

Interest expense was $4.3 million for the six months ended June 30, 2025 compared to $4.7 million for the six months ended June 30, 2024 and consisted of interest expense on the OrbiMed Credit Agreement as described in Note 10 to our financial statements for each period. The decrease of $0.4 million was related to a lower outstanding principal balance under our Credit Agreement with OrbiMed.

Change in Fair Value of Derivative Liability

The change in the fair value of the derivative liability for the six months ended June 30, 2025 and 2024 was $0.9 million and $0 million, respectively, due to the principal payments starting in January 2025 relating to the Credit Agreement.

Liquidity and Capital Resources

As of June 30, 2025, we had cash and cash equivalents of $15.4 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 $28.0 million from the Torii Agreement, which includes $8.0 million received in July 2025. In November 2024, we closed an underwritten offering of 4,551,824 shares of our common stock and, in lieu of common stock to certain investors that so chose, pre-funded warrants to purchase 223,595 shares of our common stock, and in either case, accompanying Series A Warrants to purchase 2,387,703 shares of our common stock at an exercise price of $10.68 per share of common stock and Series B Warrants to purchase 2,387,703 shares of our common stock at an exercise price of $13.35 per share of common stock, at a combined public offering price of $8.90 per share of common stock and accompanying Series A and Series B Warrants (or $8.899 per Pre-Funded Warrant and accompanying Series A and Series B Warrants). The offering resulted in net proceeds of $39.6 million, after deducting underwriting discounts and commissions, and offering expenses.

On July 21, 2023, the FDA approved YCANTH (VP-102) topical solution for the treatment of molluscum contagiosum in adult and pediatric patients two years of age and older. Our first commercial sale of YCANTH (VP-102) occurred in August 2023.

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 will 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 are 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.

In addition, the Credit Agreement contains a financial covenant that we must maintain a liquidity of at least $10.0 million and also requires that our quarterly and annual financial statements not be subject to any qualification or statement which is of a "going concern" or similar nature. The requirement to deliver financial statements that are not subject to a qualification of a "going concern" was waived for the financial statements for the quarters ending June 30, 2025, September 30, 2025 and the year ending December 31, 2025. If the requirement to deliver financial statements that are not subject to a qualification of a "going concern" is not waived for additional future periods or if we don’t raise additional financing, we may be in default of our debt in the near-term.

During the term of the Credit Agreement, interest payable in cash by us will accrue on any outstanding balance due under the Credit Agreement at a rate per annum equal to the higher of (x) the SOFR rate (which is the forward-looking term rate for a one-month tenor based on the secured overnight financing rate administered by the CME Group Benchmark Administration Limited) and (y) 4.00% plus, in either case, 8.00%. During an event of default, any outstanding amount under the Credit Agreement will bear interest at a rate of 4.00% in excess of the otherwise applicable rate of interest. We will pay certain fees with respect to the Credit Agreement, including an upfront fee, an unused fee on the undrawn portion of the Credit Agreement, an administration fee, a prepayment premium and an exit fee, as well as certain other fees and expenses of the Administrative Agent and the Lenders.

Cash Flows

The following table summarizes our cash flows (in thousands):


	For the Six Months Ended June 30,
	2025			2024
Net cash used in operating activities	$	(22,721	)	$	(36,305	)
Net cash used in investing activities		—			(11	)
Net cash used in financing activities		(8,212	)		(1,301	)
Net decrease in cash and cash equivalents	$	(30,933	)	$	(37,617	)

Operating Activities

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 noncash interest 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.

During the six months ended June 30, 2024, operating activities used $36.3 million of cash, primarily resulting from a net loss of $37.5 million partially offset by non-cash stock-based compensation of $4.3 million and non-cash interest expense of $1.0 million. Net cash used by changes in operating assets and liabilities consisted primarily of increases in accounts receivable of $5.8 million and prepaid expenses and other assets of $1.6 million partially offset by a net increase in accounts payable and accrued expenses of $2.7 million.

Investing Activities

We did not use any cash in investing activities during the six months ended June 30, 2025. During the six months ended June 30, 2024 net cash used in investing activities of $11,000 was for the purchase of property and equipment.

Financing Activities

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 Credit Agreement.

During the six months ended June 30, 2024, net cash used by financing activities of $1.3 million was primarily due to $1.1 million of debt amendment costs paid related to the Credit Agreement.

Funding Requirements

Our first commercial sale of YCANTH (VP-102) occurred in August 2023 to a specialty pharmacy distributor. While we expect to continue to generate revenue from the sale of YCANTH (VP-102), our expenses may increase in connection with our ongoing activities, particularly as we continue the research and development of, continue or initiate clinical trials of, and seek marketing approval for, our product candidates. We will need substantial additional financing to fund our operations. If we are unable to raise capital when needed or on attractive terms, we would be forced to reduce operating expenses, delay, reduce or eliminate our research and development programs and/or continued and future commercialization efforts. In addition, the amount of proceeds we may be able to raise pursuant to our currently effective shelf registration statement on Form S-3 is limited. We are subject to the general instructions of Form S-3 known as the "baby shelf rules." Under these rules, the amount of funds we can raise through primary public offerings of securities in any 12-month period using our registration statement on Form S-3 is limited to one-third of the aggregate market value of the shares of our common stock held by non-affiliates. Therefore, we will be limited in the amount of proceeds we are able to raise by selling securities using our Form S-3 until such time as our public float exceeds $75.0 million.

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, 2025, we had an accumulated deficit of $316.6 million. We believe our cash, and cash equivalents of $15.4 million as of June 30, 2025 and the $8.0 million milestone payment received from Torii in July 2025 will be sufficient to support our planned operations into the fourth quarter of 2025.

Based on our current business plan and current capital resources, combined with the uncertainty regarding the availability of additional funding and considering our debt obligations, including a requirement to maintain cash, cash equivalents and investments of at least $10.0 million at all times, we have concluded there is substantial doubt regarding our ability to continue as a going concern within one year after the date these 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 and refinancings, collaborations, strategic alliances and/or licensing arrangements. While beyond our control, we could receive (A) a $10.0 million milestone payment for regulatory approval of YCANTH (TO-208) in Japan for the treatment of molluscum, which may occur before the end of 2025, and (B) up to $25.0 million upon the exercise of the Series A Warrants issued in conjunction with the November 2024 Equity Financing, which have an exercise price of $10.68 per share and expire in November 2025. Either of these may result in additional liquidity during 2025 and alleviate the substantial doubt regarding our ability to continue as a going concern. We cannot predict with certainty that these funds will be received and alleviate the substantial doubt. Our 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 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:

•

our ability to maintain compliance with our covenants under our Credit Agreement;

•

the level of sales achieved, and costs related to the commercialization of YCANTH (VP-102) for the treatment of molluscum contagiosum;

•

the costs, timing and outcome of regulatory review of our product candidates;

•

the scope, progress, results and costs of our clinical trials;

•

the scope, prioritization and number of our research and development programs;

•

the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims;

•

our ability to maintain compliance with covenants under our loan agreements;

•

the extent to which we acquire or in-license other product candidates and technologies;

•

the impact on the timing of our clinical trials and our business;

•

the costs to scale up and secure manufacturing arrangements for commercial production of YCANTH (VP-102) for the treatment of molluscum contagiosum and any product candidate we successfully commercialize; and

•

the costs of establishing and maintaining sales and marketing capabilities for YCANTH (VP-102) for the treatment of molluscum contagiosum and any product candidate that obtains regulatory approval.

Identifying potential product candidates and conducting preclinical studies and clinical trials is a time-consuming, expensive and uncertain process that takes many years to complete, and we may never generate the necessary data or results required to obtain marketing approval and achieve product sales. In addition, YCANTH (VP-102), and our other product candidates, if approved, may not achieve commercial success. Our commercial revenues will be derived solely from sales of YCANTH (VP-102) in the near term. We may need to continue to rely on additional financing to achieve our business objectives. Adequate additional financing may not be available to us on acceptable terms, or at all.

Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through a combination of equity offerings, debt financings, collaborations, strategic alliances and licensing arrangements. Our ability to raise additional capital may be adversely impacted by potential worsening global economic conditions and the disruptions to, and volatility in, the credit and financial markets in the United States and worldwide. To the extent that we raise additional capital through the sale of equity or convertible debt securities, ownership interests of existing stockholders may be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect our existing stockholders’ rights. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.

If we raise funds through additional collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or to grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

Contractual Obligations and Commitments

As of June 30, 2025, there have been no material changes to our contractual obligations and commitments as previously discussed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Item 3. Quantitative and Qualitative Disclosures About Market Risks

There have been no material changes to our quantitative and qualitative disclosures about market risk as previously disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Interim Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Quarterly Report on Form 10-Q to ensure that the information required to be disclosed by us in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that information required to be disclosed in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Interim Chief Financial Officer, to allow timely decisions regarding required disclosures. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost benefit relationship of possible controls and procedures. Based on such evaluation, our Chief Executive Officer and Interim Chief Financial Officer has concluded that our disclosure controls and procedures were effective as of June 30, 2025.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(b) and 15d-15(b) of the Exchange Act that occurred during the quarter ended June 30, 2025, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item. 1 Legal Proceedings

On January 12, 2024, the Court granted in part and denied in part Defendants’ motion to dismiss the amended complaint. The Court held that Plaintiff’s claims relating to statements made in May and June 2021 were sufficiently pled, but dismissed Plaintiff’s claims relating to all other statements made during the Putative Class Period. On January 26, 2024, Plaintiff filed a second amended complaint in an attempt to cure certain of the deficiencies identified in the January 12, 2024 ruling. Defendants’ motion to dismiss the second amended complaint was fully briefed as of April 22, 2024. On September 3, 2024, the Court granted in part and denied in part Defendants’ motion to dismiss the second amended complaint. The Court dismissed Plaintiff’s claims related to one of the two individual defendants but held that Plaintiff’s claims against us and the other individual defendant were sufficiently pled.

In addition, on October 21, 2024, May 12, 2025, and June 26, 2025, plaintiffs Ivan S. Cohen, Paul Cannon, and Joseph Bonaccorso, respectively, each filed a putative stockholder derivative lawsuit in the U.S. District Court for the Eastern District of Pennsylvania. Each derivative complaint names us as a nominal defendant and purports to bring claims on our behalf against certain of our current and former directors and officers for alleged violations of the federal securities laws and breaches of their fiduciary duties in relation to substantially the same factual allegations as the above-described putative class action lawsuit. Each derivative complaint primarily seeks to recover for us compensatory damages for losses allegedly sustained related to the facts alleged, restitution, and punitive damages. On December 16, 2024, the Court granted the parties' joint stipulation to stay the Cohen derivative lawsuit. On July 21, 2025, the Court granted the parties’ joint stipulation in the Cohen and Cannon derivative lawsuits to consolidate the two actions and stay the consolidated action. On July 24, 2025, the plaintiff in the Bonaccorso derivative lawsuit filed a corrected complaint to clarify that the named plaintiff "is not Joseph (Joe) Bonaccorso, the former Chief Commercial Officer" of the Company. On July 29, 2025, the plaintiff in the Bonaccorso derivative lawsuit filed a notice voluntarily dismissing the action without prejudice.

We are involved in ordinary, routine legal proceedings that are not considered by management to be material. We believe the ultimate liabilities resulting from such legal proceedings will not materially affect our financial position or our results of operations or cash flows.

Item 1A. Risk Factors

Our business is subject to risks and events that, if they occur, could adversely affect our financial condition and results of operations and the trading price of our securities. In addition to the other information set forth in this quarterly report on Form 10-Q, you should carefully consider the factors described in Part I, Item 1A. "Risk Factors" of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the Securities and Exchange Commission on March 11, 2025.

We completed a reverse stock split of our shares of common stock, which may reduce and may limit the market trading liquidity of the shares due to the reduced number of shares outstanding and may potentially have an anti-takeover effect.

We completed the reverse stock split of our common stock by a ratio of 1-for-10, effective July 24, 2025. The liquidity of our common stock may be adversely affected by the reverse stock split as a result of the reduced number of shares outstanding following the reverse stock split. In addition, the reverse stock split may increase the number of stockholders who own odd lots of our common stock, creating the potential for such stockholders to experience an increase in the cost of selling their shares and greater difficulty affecting such sales. Reducing the number of outstanding shares of our common stock through the reverse stock split is intended, absent other factors, to increase the per share market price of our common stock. However, other factors, such as our financial results, market conditions and the market perception of our business may adversely affect the market price of our common stock. As a result, there can be no assurance that the reverse stock split will result in the intended benefits, that the market price of our common stock will remain higher following the reverse stock split or that the market price of our common stock will not decrease in the future.

Item 5. Other Information

Rule 10b5-1 Trading Arrangements and Non-Rule 10b5-1 Trading Arrangements

During the three months ended June 30, 2025, none of our directors or officers (as defined in Rule 16a-1(f) under the Exchange Act) adopted, modified or terminated a "Rule 10b5-1 trading arrangement" or a "non-Rule 10b5-1 trading arrangement" (as each term is defined in Item 408 of Regulation S-K).

Item 6. Exhibits

EXHIBIT INDEX


Exhibit No.		Description

3.1 (1)		Amended and Restated Certificate of Incorporation.

3.2 (2)		Certificate of Amendment of the Amended and Restated Certificate of Incorporation

3.2 (3)		Amended and Restated Bylaws.

10.1		Sixth Amendment and Waiver to Credit Agreement dated as of June 10, 2025, by and between the Company and OrbiMed Royalty & Credit Opportunities IV, LP.

10.2+^		Second Amendment to Collaboration and License Agreement, dated as of June 27, 2025, by and between the Company and Torii Pharmaceuticals Co., Ltd.

31.1		Certification of Chief Executive Officer and President (Principal Executive Officer), pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).

31.2		Certification of Interim Chief Financial Officer (Interim Principal Financial Officer), pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).

32.1*		Certifications of Chief Executive Officer and President (Principal Executive Officer) and Interim Chief Financial Officer (Interim Principal Financial Officer), pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).

101.INS		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.

101.SCH		Inline XBRL Taxonomy Extension Schema Document

104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

(1) Previously filed as Exhibit 3.3 to the Company’s Registration Statement on Form S-1 (File No. 333-225104), filed with the Securities and Exchange Commission on May 22, 2018.

(2) Previously filed as Exhibit 3.1 to the Company's Current Report on Form 8-K (File No. 001-38529), filed with the Securities and Exchange Commission on July 23, 2025.

(3) Previously filed as Exhibit 3.4 to the Company's Registration Statement on Form S-1 (File No. 333-225104), filed with the Securities and Exchange Commission on May 22, 2018.

+ Certain portions of this exhibit, indicated by asterisks, have been omitted pursuant to Item 601(b)(10) of Regulation S-K because they are not material and would likely cause competitive harm to the registrant if publicly disclosed.

^ Pursuant to Item 601(a)(5) of Regulation S-K promulgated by the SEC, certain exhibits and schedules to this agreement have been omitted. The Company hereby agrees to furnish supplementally to the SEC, upon its request, any or all of such omitted exhibits or schedules.

* These certifications are being furnished solely to accompany this quarterly report pursuant to 18 U.S.C. Section 1350, and are not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and are not to be incorporated by reference into any filing of the registrant, whether made before or after the date hereof, regardless of any general incorporation language in such filing Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Signatures



	VERRICA PHARMACEUTICALS INC.

August 12, 2025	By:	/s/ Jayson Rieger
		Jayson Rieger
		Chief Executive Officer and President
		(Principal Executive Officer)

	By:	/s/ John J. Kirby
		John J. Kirby
		Interim Chief Financial Officer
		(Interim Principal Financial Officer)

EX-10.1 2 vrca-ex10_1.htm EX-10.1 EX-10.1

Exhibit 10.1

SIXTH AMENDMENT AND WAIVER TO CREDIT AGREEMENT

This SIXTH AMENDMENT AND WAIVER TO CREDIT AGREEMENT (this “Amendment”) is made and entered into as of June 10, 2025 by and among VERRICA PHARMACEUTICALS INC., a Delaware corporation (the “Borrower”), the Lenders party hereto (the “Lenders”), and ORBIMED ROYALTY & CREDIT OPPORTUNITIES IV, LP, as administrative agent for the Lenders (together with its Affiliates, successors, transferees and assignees, the “Administrative Agent”).

WHEREAS, the Borrower, the Lenders and the Administrative Agent entered into a Credit Agreement, dated as of July 26, 2023 (as amended by that First Amendment to Credit Agreement, dated as of December 20, 2023, as further amended by that certain Second Amendment to Credit Agreement, dated as of January 31, 2024, as further amended by that certain Third Amendment and Waiver to Credit Agreement, dated as of May 6, 2024, as further amended by that certain Fourth Amendment to Credit Agreement, dated as of June 26, 2024, and as further amended by that certain Fifth Amendment and Waiver to Credit Agreement, dated as of August 2, 2024, and as further modified by that certain Waiver, dated as of February 18, 2025, the “Existing Credit Agreement”; the Existing Credit Agreement as may be further amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), pursuant to which the Lenders have extended credit to the Borrower on the terms set forth therein;

WHEREAS, pursuant to Section 7.1(b) of the Credit Agreement, the Borrower is required, among other things, to deliver to the Administrative Agent consolidated financial statements of the Borrower and its Subsidiaries for each Fiscal Quarter, which financial statements shall be without any “going concern” or like qualification (the “Quarterly Going Concern Requirement”);

WHEREAS, the Borrower has requested that the Lenders waive, solely in respect of the Borrower’s quarterly unaudited financial statements for the Fiscal Quarters ending June 30, 2025, September 30, 2025 and December 31, 2025 (the “Specified Quarterly Financials”), the Quarterly Going Concern Requirement, and the Lenders agree to provide such waiver on the terms and subject to the conditions set forth herein;

WHEREAS, pursuant to Section 7.1(c) of the Credit Agreement, the Borrower is required, among other things, to deliver to the Administrative Agent audited financial statements of the Borrower and its Subsidiaries for each Fiscal Year, which financial statements shall be without any “going concern” or like qualification (the “Annual Going Concern Requirement”);

WHEREAS, the Borrower has requested that the Lenders waive, solely in respect of the Borrower’s annual audited financial statements for the Fiscal Year ending December 31, 2025 (the “Specified Annual Financials”), the Annual Going Concern Requirement, and the Lenders agree to provide such waiver on the terms and subject to the conditions set forth herein;

WHEREAS, pursuant to Section 10.1 of the Credit Agreement, the Credit Agreement may be amended or waived by an instrument in writing signed by the Borrower and the Lenders and acknowledged by the Administrative Agent; and

WHEREAS, the Borrower and the Lenders desire to amend or waive certain provisions of the Existing Credit Agreement as provided in this Amendment.

NOW, THEREFORE, in consideration of the mutual agreements herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

Definitions; Loan Document. Capitalized terms used herein without definition shall have the meanings assigned to such terms in the Credit Agreement. This Amendment shall constitute a Loan Document for all purposes of the Credit Agreement and the other Loan Documents.

Amendments to Existing Credit Agreement. Subject to satisfaction of the conditions set forth in Section 4 of this Amendment:

Section 1.1 of the Existing Credit Agreement is hereby amended by inserting the following definitions in alphabetical order:

“Sixth Amendment” is that certain Sixth Amendment and Waiver to Credit Agreement, dated as of June 10, 2025, by and among the Borrower, the Lenders party thereto and the Administrative Agent.

“Sixth Amendment Fee” is defined in the Sixth Amendment.

Section 4.4(e) of the Existing Credit Agreement is hereby amended by inserting the phrase “, Sixth Amendment Fee” after each reference to “Fourth Amendment Fee”.

Waiver. Subject to the effectiveness of this Amendment and the terms and conditions set forth herein (a) solely with respect to the Specified Quarterly Financials required to be delivered pursuant to Section 7.1(b) of the Credit Agreement, the Lenders agree to waive the Quarterly Going Concern Requirement, and (b) solely with respect to the Specified Annual Financials required to be delivered pursuant to Section 7.1(c) of the Credit Agreement, the Lenders agree to waive the Annual Going Concern Requirement.

Conditions to Effectiveness of Amendment. This Amendment shall be deemed to be effective as of June 10, 2025 upon the satisfaction of the following conditions:

Receipt by the Lenders, the Administrative Agent and the Borrower of a counterpart signature of the others to this Amendment duly executed and delivered by each of the Lenders, the Administrative Agent and the Borrower; and

Receipt by the Administrative Agent, for the account of each Lender on a pro rata basis, an amendment fee in an aggregate amount equal to $110,465.12 (the “Sixth Amendment Fee”), which shall be fully earned, due and payable by the Borrower upon the execution of this Amendment.

Expenses. The Borrower agrees to pay on demand all expenses of the Administrative Agent and the Lenders (including, without limitation, the fees and out-of-pocket expenses of Covington & Burling LLP, counsel to the Administrative Agent and the Lenders) incurred in connection with the negotiation, preparation, execution and delivery of this Amendment.

Representations and Warranties. The Borrower represents and warrants to the Lenders, as of the effective date of this Amendment, as follows:

The representations and warranties of the Borrower and the Subsidiaries contained in the Credit Agreement or any other Loan Document (provided that schedules III and IV to the Security Agreement are deemed to have been supplemented by the schedules delivered to the Administrative Agent or their counsel as of the date hereof) are true and correct in all material respects as of the date hereof (except (i) with respect to representations and warranties expressly made as of an earlier date, in which case such representations and warranties are true and correct in all material respects as of such earlier date and (ii) if any such representation or warranty contains any materiality qualifier, such representation or warranty is true and correct in all respects).

No Default or Event of Default under the Credit Agreement has occurred and is continuing or would result from the effectiveness of this Amendment.

No Implied Amendment or Waiver. Except as expressly set forth in this Amendment, this Amendment shall not, by implication or otherwise, limit, impair, constitute a waiver of or otherwise affect any rights or remedies of the Administrative Agent and the Lenders under the Credit Agreement or the other Loan Documents, or alter, modify, amend or in any way affect any of the terms, obligations or covenants contained in the Credit Agreement or the other Loan Documents, all of which shall continue in full force and effect. Nothing in this Amendment shall be construed to imply any willingness on the part of the Administrative Agent or any Lender to agree to or grant any similar or future amendment, consent or waiver of any of the terms and conditions of the Credit Agreement or the other Loan Documents.

Waiver and Release. TO INDUCE THE ADMINISTRATIVE AGENT AND THE LENDERS TO AGREE TO THE TERMS OF THIS AMENDMENT, THE BORROWER AND ITS AFFILIATES (COLLECTIVELY, THE “RELEASING PARTIES”) REPRESENT AND WARRANT THAT, AS OF THE DATE HEREOF, THERE ARE NO CLAIMS OR OFFSETS AGAINST, OR RIGHTS OF RECOUPMENT WITH RESPECT TO, OR DISPUTES OF, OR DEFENSES OR COUNTERCLAIMS TO, THEIR OBLIGATIONS UNDER THE LOAN DOCUMENTS, AND IN ACCORDANCE THEREWITH THE RELEASING PARTIES:

WAIVE ANY AND ALL SUCH CLAIMS, OFFSETS, RIGHTS OF RECOUPMENT, DISPUTES, DEFENSES AND COUNTERCLAIMS, WHETHER KNOWN OR UNKNOWN, ARISING PRIOR TO THE DATE HEREOF.

FOREVER RELEASE, RELIEVE, AND DISCHARGE THE ADMINISTRATIVE AGENT, THE LENDERS, THEIR AFFILIATES AND THEIR RESPECTIVE OFFICERS, DIRECTORS, SHAREHOLDERS, MEMBERS, PARTNERS, PREDECESSORS, SUCCESSORS, ASSIGNS, ATTORNEYS, ACCOUNTANTS, AGENTS, EMPLOYEES, AND REPRESENTATIVES (COLLECTIVELY, THE “RELEASED PARTIES”), AND EACH OF THEM, FROM ANY AND ALL CLAIMS, LIABILITIES, DEMANDS, CAUSES OF ACTION, DEBTS, OBLIGATIONS, PROMISES, ACTS, AGREEMENTS, AND DAMAGES, OF WHATEVER KIND OR NATURE, WHETHER KNOWN OR UNKNOWN, SUSPECTED OR UNSUSPECTED, CONTINGENT OR FIXED, LIQUIDATED OR UNLIQUIDATED, MATURED OR UNMATURED, WHETHER AT LAW OR IN EQUITY, WHICH THE RELEASING PARTIES EVER HAD, NOW HAVE, OR MAY, SHALL, OR CAN HEREAFTER HAVE, DIRECTLY OR INDIRECTLY ARISING OUT OF OR IN ANY WAY BASED UPON, CONNECTED WITH, OR RELATED TO MATTERS, THINGS, ACTS, CONDUCT, AND/OR OMISSIONS AT ANY TIME FROM THE BEGINNING OF THE WORLD THROUGH AND INCLUDING THE DATE HEREOF, INCLUDING WITHOUT LIMITATION ANY AND ALL CLAIMS AGAINST THE RELEASED PARTIES ARISING UNDER OR RELATED TO ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREBY.

IN CONNECTION WITH THE RELEASE CONTAINED HEREIN, ACKNOWLEDGE THAT THEY ARE AWARE THAT THEY MAY HEREAFTER DISCOVER CLAIMS PRESENTLY UNKNOWN OR UNSUSPECTED, OR FACTS IN ADDITION TO OR DIFFERENT FROM THOSE WHICH THEY KNOW OR BELIEVE TO BE TRUE, WITH RESPECT TO THE MATTERS RELEASED HEREIN. NEVERTHELESS, IT IS THE INTENTION OF THE RELEASING PARTIES, THROUGH THIS AMENDMENT AND WITH ADVICE OF COUNSEL, FULLY, FINALLY, AND FOREVER TO RELEASE ALL SUCH MATTERS, AND ALL CLAIMS RELATED THERETO, WHICH DO NOW EXIST, OR HERETOFORE HAVE EXISTED. IN FURTHERANCE OF SUCH INTENTION, THE RELEASES HEREIN GIVEN SHALL BE AND REMAIN IN EFFECT AS A FULL AND COMPLETE RELEASE OR WITHDRAWAL OF SUCH MATTERS NOTWITHSTANDING THE DISCOVERY OR EXISTENCE OF ANY SUCH ADDITIONAL OR DIFFERENT CLAIMS OR FACTS RELATED THERETO.

COVENANT AND AGREE NOT TO BRING ANY CLAIM, ACTION, SUIT, OR PROCEEDING AGAINST THE RELEASED PARTIES, DIRECTLY OR INDIRECTLY, REGARDING OR RELATED IN ANY MANNER TO THE MATTERS RELEASED HEREBY, AND FURTHER COVENANT AND AGREE THAT THIS AMENDMENT IS A BAR TO ANY SUCH CLAIM, ACTION, SUIT, OR PROCEEDING.

REPRESENT AND WARRANT TO THE RELEASED PARTIES THAT THEY HAVE NOT HERETOFORE ASSIGNED OR TRANSFERRED, OR PURPORTED TO ASSIGN OR

TRANSFER, TO ANY PERSON OR ENTITY ANY CLAIMS OR OTHER MATTERS HEREIN RELEASED.

ACKNOWLEDGE THAT THEY HAVE HAD THE BENEFIT OF INDEPENDENT LEGAL ADVICE WITH RESPECT TO THE ADVISABILITY OF ENTERING INTO THIS RELEASE AND HEREBY KNOWINGLY, AND UPON SUCH ADVICE OF COUNSEL, WAIVE ANY AND ALL APPLICABLE RIGHTS AND BENEFITS UNDER, AND PROTECTIONS OF, CALIFORNIA CIVIL CODE SECTION 1542, AND ANY AND ALL STATUTES AND DOCTRINES OF SIMILAR EFFECT. CALIFORNIA CIVIL CODE SECTION 1542 PROVIDES AS FOLLOWS:

A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release, and that if known by him or her, would have materially affected his or her settlement with the debtor or released party.

Counterparts; Governing Law. This Amendment may be executed by the parties hereto in several counterparts, each of which shall be an original and all of which shall constitute together but one and the same agreement. Delivery of an executed counterpart of a signature page to this Amendment by email (e.g., “pdf” or “tiff”) or telecopy shall be effective as delivery of a manually executed counterpart of this Amendment. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).

10.

Agent Authorization. Each of the Lenders party hereto, constituting all of the Lenders, hereby authorizes and directs the Administrative Agent to execute and deliver the acknowledgment to this Amendment.

[Remainder of Page Intentionally Left Blank]

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective officers thereunto duly authorized as of the day and year first above written.


	VERRICA PHARMACEUTICALS INC. as the Borrower

	By: /s/ David Zawitz
	Name: David Zawitz
	Title: Chief Operating Officer

     ORBIMED ROYALTY & CREDIT OPPORTUNITIES IV, LP,
as a Lender

     By: OrbiMed ROF IV LLC,

    

            its General Partner
 
By:  OrbiMed Advisors LLC,
        its Managing Member

     By:  /s/ Matthew Rizzo

    

     Name:  Matthew Rizzo

    

     Title:    Member

     ORBIMED ROYALTY & CREDIT OPPORTUNITIES IV OFFSHORE, LP,
as a Lender

     By: OrbiMed ROF IV LLC,

    

            its General Partner
 
By:  OrbiMed Advisors LLC,
        its Managing Member

     By:  /s/ Mathew Rizzo

    

     Name:  Matthew Rizzo

    

     Title:    Member

      
ACKNOWLEDGED BY:

     ORBIMED ROYALTY & CREDIT OPPORTUNITIES IV, LP
as the Administrative Agent

     By: OrbiMed ROF IV LLC,

    

            its General Partner
 
 By:  OrbiMed Advisors LLC,
         its Managing Member

     By:  /s/ Matthew Rizzo

    

     Name: Matthew Rizzo

    

     Title:    Member

    

EX-10.2 3 vrca-ex10_2.htm EX-10.2 EX-10.2

Exhibit 10.2

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL. OMISSIONS ARE DESIGNATED [***].

Execution Copy

SECOND AMENDMENT TO THE COLLABORATION AND LICENSE AGREEMENT

This Second Amendment to the Collaboration and License Agreement (the

“Second Amendment”) is entered into as of June 27, 2025 (the “Second Amendment Effective Date”), by and between Verrica Pharmaceuticals Inc., a company incorporated under the laws of Delaware and having an address at 44 West Gay Street, Suite 400, West Chester, Pennsylvania, USA 19380 (“Verrica”) and Torii Pharmaceutical Co., Ltd., a company incorporated under the laws of Japan and having its principal place of business at 4-1 Nihonbashi-Honcho 3-chome, Chuo- ku, Tokyo 103-8439, Japan (“Licensee”). Verrica and Licensee are sometimes referred to herein individually as a “Party” and collectively as the “Parties.”

RECITALS

Whereas, Verrica and Licensee are each a party to that certain Collaboration and License Agreement, dated as of March 17, 2021, as previously amended by that certain First Amendment to Collaboration and License Agreement dated as of May 14, 2024 (collectively, the “Original Agreement”);

Whereas, the Parties have agreed to make certain changes to the Original Agreement to adjust the cost sharing mechanism for the CW Study, to provide Licensee with the right to manufacture the Product for commercialization in the Territory, and to adjust certain milestone payments, transfer price mechanics and royalty payments as set forth in greater detail herein; and

Whereas, the Parties now wish to amend the Original Agreement in accordance with Section 15.3 thereof to reflect these changes.

AGREEMENT

Now, Therefore, in consideration of the foregoing and of the mutual covenants herein contained, the Parties hereby agree to amend the terms of the Original Agreement as provided below.

Definitions. Any capitalized term used but not defined in this Second Amendment shall have the meaning given to such term in the Original Agreement.

Amendment to the Agreement.

2.1 The definition of “Second Amendment Effective Date” as set forth in this Second Amendment is hereby incorporated by reference into the Original Agreement.

2.2 Article 1 of the Original Agreement is hereby amended by adding the following definitions in appropriate alphabetical order:

“Cosmetic Variance Product” has the meaning provided in Section 7.2.

“Creditable Cosmetic Variance Product” has the meaning provided in Section 7.2.

“First CW Milestone” has the meaning provided in Section 8.2.

“Licensee Responsible Portion” has the meaning provided in Section 4.10(c)(y).

“Manufacturing Technology Transfer” has the meaning provided in Section 7.9.

“Royalty Product” has the meaning provided in Section 8.5(a).

“Royalty Report” has the meaning provided in Section 8.5(b).

2.3.

Sections 1.132, 1.133 and 1.141 of the Original Agreement are hereby deleted in their entireties.

2.4.

Section 1.151 of the Original Agreement is hereby amended and restated by replacing such Section with the following:

“Transfer Price” has the meaning provided in Section 8.4.”

2.5.

Section 2.2 of the Original Agreement is hereby amended and restated by replacing such article with the following:

“2.2 Effectiveness of Manufacturing License. The Manufacturing License shall become effective on the Second Amendment Effective Date.”

2.6.

Section 2.4(a) is hereby amended and restated by replacing such article with the following:

“(a) Promptly after the Effective Date, Verrica shall make available to Licensee all copies of Verrica Know-How existing as of the Effective Date, including non-clinical study data, Clinical Trial data and any other study data, related to or reasonably useful in the development of Product in the Field in the Territory that Verrica has filed with the FDA on or before the Effective Date in a form and format in Verrica’s possession (i.e., compliant with the CDISC or SaaS data set or SaaS export file, at Verrica’s discretion). On an ongoing basis during the Term pursuant to a transfer plan agreed to by the Parties, Verrica shall make available to Licensee any and all copies of Verrica Know-How, to the extent not previously provided to Licensee under this Section 2.4(a), that is necessary or reasonably useful for Licensee (i) to practice the License and (ii) to exercise Licensee’s rights and perform Licensee’s obligations under this Agreement. Without limiting the generality of the foregoing, Verrica shall provide to Licensee true and complete copies of all written, graphic or electronic embodiments of Data generated by or on behalf of, or otherwise Controlled by, Verrica or any of its Affiliates, including all draft and final reports of any material preclinical study or Clinical Trial of Compound or Product, and all pharmacology, toxicology, pharmacokinetic and other data with respect to Compound or Product, and Licensee may use the Data contained in such reports solely within the scope of the License.”

2.7.

Sections 4.10(b) to (e) of the Original Agreement are hereby amended and restated by replacing such article with the following:

“(b) “CW Study Costs” means all external fees, costs, and expenses incurred by either Party in the performance of and in accordance with the CW Study Plan including the tests that may be required by an applicable Regulatory Authority, provided that the CW Study Costs shall not exceed [***] percent [***] of [***] Dollars [***] (i.e., [***] Dollars [***]. For clarity, CW Study Costs shall not include (i) either Party’s internal costs (including but not limited to, costs related to consultation with and application for approval of a Regulatory Authority, and outside advisor’s consultation fees), and or (ii) any consultation fees to be paid to any Regulatory Authority.

(c) Subject to the Parties receiving the applicable approvals from Regulatory Authorities necessary to initiate the CW Study, Verrica and Licensee shall be equally responsible for the CW Study Costs, provided that

(x) Licensee shall pay one hundred percent (100%) of the budgeted CW Study Costs up to forty million Dollars ($40,000,000) when due and then Verrica shall repay Licensee fifty percent (50%) of the CW Study Costs paid by Licensee (such amount, the “Verrica Responsible Portion”) in accordance with clauses (d), (e), and (f) below; and

(y) to the extent the CW Study Costs exceed forty million Dollars ($40,000,000), Verrica shall pay one hundred percent (100%) of the CW Study Costs up to [***] Dollars [***] when due and then Licensee shall repay Verrica fifty percent (50%) of the CW Study Costs paid by Verrica (such amount, the “Licensee Responsible Portion”) in accordance with clauses (d), (e), and (f) below, provided that Licensee may offset any Verrica Responsible Portion that has not been repaid against Licensee Responsible Portion in accordance with Section 4.10(e)(iv) below; provided further that, if there is insufficient Verrica Responsible Portion that has not been repaid to fully offset Licensee Responsible Portion within sixty (60) months after the date on which Licensee made its first payment of CW Study Costs, then Licensee shall repay the remaining Licensee Responsible Portion within [***] days after receipt of invoice for such payment from Verrica.

Each Party shall pay all invoiced CW Study Costs that such Party is responsible for paying under clause (x) or (y) above (as applicable) directly to the applicable Third Party in accordance with the payment methods and conditions that are separately provided in an agreement to be entered by and among Verrica, Licensee and a Third Party CRO, provided that Verrica (a) will use reasonable best efforts to minimize the number of Third Party invoices and (b) within [***] days after the end of each Calendar Quarter, will provide to Licensee a summary report of the Verrica Responsible Portion of the CW Study Costs incurred by Licensee in the preceding Calendar Quarter until the Verrica Responsible Portion as well as the accrued interest has been fully repaid by Verrica to Licensee. Such summary report shall include (i) the amount of the Verrica Responsible Portion paid by Licensee and the payment date, (ii) accrued interest, (iii) the amount of the Verrica Responsible Portion that has already been offset pursuant to Section 4.10(e), if any, and (iv) the total amount of the outstanding Verrica Responsible Portion, including the accrued interest Verrica owes to Licensee as of the end of such Calendar Quarter. With respect to the Third Party CRO agreement referenced in this Section 4.10(c), notwithstanding the above, the Parties will strive to act by consensus regarding the terms, conditions and/or provisions of such Third Party CRO agreement. However, in the event that the Parties cannot unanimously agree to any such term, condition and/or provision other than those related to payment, Verrica’s Chief Executive Officer will have all final decision-making authority with respect to any such term, condition and/or provision; provided that, in the exercise of his or her final decision-making authority, Verrica’s Chief Executive Officer will give good faith consideration to, and take into account, Licensee’s position on any such term, condition and/or provision.

(d) The Verrica Responsible Portion shall accrue interest at a per annum rate that is the higher of (i) the one-month SOFR plus two (2) percentage points or (ii) six percent (6%). Such interest shall accrue during the period from the date that Licensee pays the first invoice related to the applicable CW Study Costs until the date that Licensee has received, in full, the Verrica Responsible Portion of the CW Study Costs.

(e) Licensee shall have the right to recoup its payment for the Verrica Responsible Portion plus applicable interest or any other amounts payable by Verrica to Torii under this Agreement or otherwise by offsetting such amount against the following payments owed by Licensee to the development milestone payment of [***] Dollars [***] for the [***] (for clarity, Licensee may not offset Verrica Responsible Portion against any other development milestone payment);

Verrica:

(i)

(ii)

with respect to any Product manufactured entirely by Verrica or its CMO, any Transfer Price payments pursuant to Section 8.4, provided that in no case shall the offset by Licensee reduce the Transfer Price payments to less than [***] Dollars [***] per assembled Product excluding the Breaking Tool); and

(iii)

any Royalty Payment pursuant to Section 8.5; and

(iv)

any Licensee Responsible Portion that has not been repaid.

Until all of the Verrica Responsible Portion plus applicable interest have been recouped or paid, within [***] days after the end of each calendar month, Verrica shall provide Licensee with a report of monthly profit and loss statement, the status of cash and cash equivalents, and the simple number of Applicators dispensed.”

2.8.

Sections 7.1 through 7.4 of the Original Agreement are hereby amended and restated by replacing such sections with the following:

“7.1 General. Subject to the terms and conditions of this Agreement (including Section 2.2) and the applicable Supply Agreement, until the completion of the Manufacturing Technology Transfer, Verrica shall sell and supply, or cause to be supplied, to Licensee, and Licensee shall purchase from Verrica all of Licensee’s, its Affiliates’ and its and their Sublicensees reasonably requested amounts of Product or components thereof (including the Proprietary Applicator/Breaking Tool Components) for (i) Clinical Trials and other non-clinical development and registration activities in the Field in the Territory, as described in additional detail in Section 7.2, and (ii) commercial distribution in the Field in the Territory, as described in additional detail in Sections 7.2 and 7.3. Verrica shall supply Licensee with Product or components thereof in (1) the form/dosage/formulation(s) that have been developed as of the Effective Date and that are available from Verrica's CMO as of the Effective Date; or (2) any form/dosage/formulation that, at the time of supply, is being used outside of the Territory by or on behalf of Verrica and that is available for supply by Verrica to Licensee (whether directly or through a CMO) for use in the Field in the Territory, or (3) any form/dosage/formulation agreed by Verrica and Licensee in accordance with Sections 4.6 and 7.5, in each case, as is set forth in the Clinical Supply Agreement or Commercial Supply Agreement, as applicable. Licensee is responsible, at Licensee’s sole cost and expense, for (x) any cartoning, packaging and labeling of the Products in accordance with the Applicable Laws in the Territory and (y) the distribution of Products in the Field in the Territory.

7.2.

Supply Agreements. Verrica shall manufacture and supply, or have manufactured and have supplied, Product or components thereof (including the Proprietary Applicator/Breaking Tool Components) to Licensee for use in Clinical Trials and other development and registration activities with respect to Product in the Field in the Territory before the completion of Manufacturing Technology Transfer, in accordance with (a) Applicable Law, (b) any requirements by the applicable Regulatory Authority for the Product in the Territory that are set forth in the Clinical Supply Agreement and/or the corresponding quality agreement, and (c) a written clinical supply agreement to be negotiated in good faith and entered into by the Parties as soon as practicable following the Effective Date and in accordance with the principles and terms set forth in Exhibit 7.2 (the “Clinical Supply Agreement”). The Parties acknowledge and agree that the Parties entered into the Clinical Supply Agreement on March 7, 2022.

Verrica shall manufacture and supply, or have manufactured and have supplied, Product or components thereof (including the Proprietary Applicator/Breaking Tool Components) to Licensee for commercial distribution in the Field in the Territory before the completion of Manufacturing Technology Transfer, in accordance with (i) Applicable Law, (ii) any requirements by the applicable Regulatory Authority for the Product in the Territory that are set forth in the Commercial Supply Agreement and/or the corresponding quality agreement, and (iii) a written commercial supply agreement to be negotiated in good faith and entered into by the Parties not later than the anticipated first MAA filing for the Product in the Field in the Territory and in accordance with the principles and terms set forth in Exhibit 7.2 (the “Commercial Supply Agreement”).

The Parties shall also agree on written quality agreements to be negotiated in good faith simultaneously with the Clinical Supply Agreement and Commercial Supply Agreement. The Supply Agreements will contain other normal and customary terms and conditions for such supply agreement and will be consistent with, and will be designed to permit Verrica to comply with its obligations under, Verrica’s corresponding supply agreements with its CMOs of Compound and Product, and shall not impose on Verrica obligations with respect to Product manufactured by any such CMO that are in excess of such CMO’s obligations to Verrica with respect to Product as of the Effective Date unless otherwise agreed between the Parties; provided, however, that to the extent that the terms of any agreement between Verrica and any CMO engaged by Verrica to manufacture the Compound or Product for clinical or commercial use in the Field in the Territory (a “CMO Agreement”) are insufficient to (1) permit the supply of the Product in the Field in the Territory in accordance with Applicable Law or (2) comply with any requirements by the applicable Regulatory Authority for the Product in the Territory that are set forth in the Supply Agreement and/or the corresponding quality agreement applicable to clinical or commercial use, then Verrica shall use Commercially Reasonable Efforts to amend such CMO Agreement as necessary to reasonably address such insufficiencies. As may be further set forth in the Commercial Supply Agreement, if Verrica supplies Licensee with drug product that meets all specifications but does not meet the mutually agreed cosmetic preferences set forth in the quality agreement (excluding cap defects) (a “Cosmetic Variance Product”), then to the extent that more than [***] percent [***] for each lot of such drug product is Cosmetic Variance Product (“Creditable Cosmetic Variance Product”), Verrica shall credit half the price paid by Licensee for such Creditable Cosmetic Variance Product against any amounts payable by Licensee to Verrica for subsequent supply of drug product.

7.3.

After Manufacturing Technology Transfer. After the completion of Manufacturing Technology Transfer, Licensee, either by itself or through its own CMOs, shall be solely responsible for the manufacture and supply of all of Licensee’s, its Affiliates’ and its and their Sublicensees’ requirements of Product or components thereof, at Licensee’s own cost and expense.

7.4.

Supply Price; Royalty Payment. The transfer price for Product supplied by or on behalf of Verrica to Licensee (a) under the Commercial Supply Agreement will be at the Transfer Price, as set forth in Section 8.4, and (b) under the Clinical Supply Agreement as separately agreed by the Parties in writing. For commercial Product manufactured by Licensee or its CMO, Licensee shall make royalty payments to Verrica in accordance with Section 8.5.”

2.9.

Section 7.8 of the Original Agreement is hereby deleted in its entirety and replaced with “Intentionally Omitted”.

2.10.

Section 7.9 of the Original Agreement are hereby amended and restated by replacing such sections with the following:

“7.9 Manufacturing Technology Transfer. Promptly after the Second Amendment Effective Date, the Parties shall coordinate the logistics of initiation and completion of a technology transfer of the process and technology that is then-used to manufacture the Product (including, for clarity, Breaking Tools) to Licensee or its CMO (the “Manufacturing Technology Transfer”), which shall be performed in accordance with a mutually agreed technology transfer plan.

As part of the Manufacturing Technology Transfer, Verrica shall (a) make available to Licensee (or its designee) any and all copies of Verrica Know-How, to the extent not previously provided to Licensee, that is necessary or reasonably useful for Licensee to practice the Manufacturing License; and (b) provide Licensee (or its designee) with reasonable technical assistance (which may include reasonable access to Verrica’s technical personnel involved in the manufacture of the Product) to enable Licensee (or its designee) to manufacture the Product and components thereof. In addition, upon Licensee’s request, Verrica shall introduce Licensee to the relevant Verrica CMOs and use Commercially Reasonable Efforts to facilitate the direct discussions between Licensee and the relevant Verrica CMOs so that Licensee may be able to directly engage such CMOs to manufacture and supply the Product or components thereof. Licensee shall reimburse Verrica for both out- of-pocket cost and internal cost incurred by Verrica to provide the Manufacturing Technology Transfer. The Manufacturing Technology Transfer shall be deemed completed when Licensee (or its designee, including CMOs engaged by Licensee) is able to perform, and has in fact commenced performing, the full range of manufacturing operations required to produce the Product, including the preparation of the bulk drug product solution, the packaging of bulk solution into ampules and the assembly of the Applicators, but excluding the manufacture of the active pharmaceutical ingredient. In connection with the Manufacturing Technology Transfer, Verrica shall also cooperate and shall cause its CMOs to cooperate, with Licensee in filing necessary regulatory filings in connection with the change of manufacturing facility at Licensee’s costs and expenses. Both Parties shall use best efforts to complete the Manufacturing Technology Transfer as quickly as possible.”

2.11.

The third development milestone in the third row in the table in Section 8.2 shall be replaced with the following:

     [***]

$8,000,000

2.12.

The following sentence is added to the end of Section 8.2.

“Notwithstanding anything to the contrary in this Agreement, Licensee shall pay Verrica for the First CW Milestone no later than [***] days after receipt of an invoice from Verrica, which Verrica may send on or after the Second Amendment Effective Date.”

2.13.

Section 8.4 of the Original Agreement is hereby amended and restated by replacing such article with the following:

“8.4. Transfer Price Payment. Subject to any applicable reduction set forth in Section 8.6, Licensee shall pay to Verrica a purchase price in accordance with Schedule 8.4 (the “Transfer Price”) in accordance with the payment and reporting schedule set forth therein, for Licensee’s purchase of each unit of Product or other items supplied by or on behalf of Verrica to Licensee under the Commercial Supply Agreement.”

2.14.

Section 8.5 of the Original Agreement is hereby amended and restated by replacing such section with the following:

“8.5 Royalty Payment.

(a)

Royalty Rate. During the Transfer Price Payment Term for a Product and subject to any applicable reduction set forth in Section 8.6, Licensee shall make quarterly non- refundable running royalty payments to Verrica on Net Sales of the Product manufactured by Licensee (or its own CMOs) (such Product, “Royalty Product”) at a royalty rate equal to [***].

(b)

Royalty Report and Payment. Within [***] days after the end of each Calendar Quarter during which there are Net Sales of Royalty Product in the Territory, Licensee shall prepare and send to Verrica a report (“Royalty Report”) stating: (i) the total amount of Net Sales of each Royalty Product during such Calendar Quarter, and the detailed and total deductions from gross amounts invoiced (or otherwise charged) to arrive at such Net Sales; (ii) the sales in units of each Royalty Product and gross amounts invoiced for such sales, on a Product-by-Product basis during such Calendar Quarter; (iii) the total amount of Royalty Product used as samples or as part of compassionate use, named patient use or indigent patient program (and specifying the total amount of Royalty Product used in each such way); (iv) a detailed description of the inventory of Royalty Product being held by Licensee or any Distributors at the end of each Calendar Quarter; and (v) the total amount of royalty payment for such Calendar Quarter owed by Licensee to Verrica, calculated at the applicable royalty rate set forth in Section 8.5(a) above. Verrica shall issue an invoice for the royalty payment promptly after receiving Royalty Report and, within [***] Business Days after receiving such invoice, Licensee shall pay the royalty payment to Verrica. ”

2.15.

Section 8.6 of the Original Agreement is hereby amended and restated by replacing such section with the following:

“8.6 Transfer Price and Royalty Reductions.

(a)

Third Party Licenses. Subject to the remainder of this Section 8.6 and the rights and obligation of the Parties set forth in Section 10.7, if Licensee or its Affiliate or Sublicensee (as applicable) is required to obtain one or more licenses under issued and unexpired Patents of Third Parties (excluding Sublicensees) that are necessary for the approved use, sale, offer for sale or import of a given Product in the Territory ( each a “Third Party License”), then Licensee may credit [***] percent [***] of the royalties (including upfront payments, milestone payments and other types of consideration for such Third Party License) actually paid by Licensee or such Affiliate or Sublicensee (as applicable) under such Third Party Licenses with respect to sales of such Product in the Territory in a given Calendar Quarter against the Transfer Price or royalty (as applicable) payable by Licensee to Verrica with respect to Product sold in such Calendar Quarter.

(b)

Generic. If during any Calendar Quarter during the Transfer Price Payment Term, (i) any Generic Product to a Product is sold in the Territory, then the Transfer Price or royalty rate with respect to Net Sales of such Product in the Territory (as applicable) shall be reduced by [***] percent [***] of the otherwise applicable price or rate set forth in Section 8.4(a) or Section 8.5(a), and (ii) all of the Generic Products to a Product in the aggregate have a market share of [***] percent [***] or more in the Territory in a Calendar Quarter (measured in local currency, as reported by an agreed market intelligence service), then the Transfer Price or royalty rate with respect to Net Sales of the Product in the Territory (as applicable) shall be reduced by [***] of the otherwise applicable price or rate set forth in Section 8.4(a) or Section 8.5(a).”

2.16.

Section 13.7 of the Original Agreement is hereby amended and restated by replacing such section with the following:

“Neither expiration nor termination of this Agreement relieves either Party of any obligation or liability accruing prior to such expiration or termination, nor does expiration or termination of this Agreement preclude either Party from pursuing all rights and remedies it may have under this Agreement, at law or in equity, with respect to breach of this Agreement. Without limiting the foregoing, the following provisions of this Agreement will survive the expiration or termination of this Agreement: Article 1 (Definitions), Section 2.2 (Effectiveness of Manufacturing License), Section 2.7 (Non- Compete), Section 2.8 (Grant-Back Licenses to Verrica), Section 4.9 (Records), Section 4.10(f) (Phase 3 Global Common Warts Study), Section 7.9 (Manufacturing Technology Transfer), Sections 8.4 (Transfer Price Payment), 8.5 (Royalty Payment), 8.7 (Exchange Rate; Manner and Place of Payment), 8.8 (Late Payments), 8.9 (Audits), and 8.10 (Taxes; Cooperation) (each solely to the extent pertaining to amounts becoming due or to sales made during the Term), Article 9 (Confidentiality), Section 10.1(a) (Inventions), Sections 10.2(b) (Joint Patents), 10.2(d) (Cooperation of the Parties), 10.3(a) (Notice; Procedures), 10.3(b)(ii) (Joint Patents), 10.3(c) (Cooperation), 10.3(d) (Recovery) (each solely with respect to Joint Patents), Section 11.6 (Disclaimer), Article 12 (Indemnification; Insurance; Liability Limitations), Section 13.1 (Term), Section 13.6

(Effect of Expiration or Termination), this Section 13.7 (Accrued Obligations; Survival), Article 14 (Dispute Resolution) and Article 15 (Miscellaneous).”

2.17.

Section 15.9 with respect to notices to Verrica are updated to include the following:


If to Verrica:	Verrica Pharmaceuticals Inc. 44 West Gay Street, Suite 400 West Chester, Pennsylvania 19380 United States of America Attention: Chief Legal Officer Email: [***]
With a copy to:	Verrica Pharmaceuticals Inc. 44 West Gay Street, Suite 400 West Chester, Pennsylvania 19380 United States of America Attention: ChiefExecutive Officer
With a further copy to:	Cooley LLP 500 Boylston Street Boston, Massachusetts 02116-3736 United States of America Attention: [*] Email: [*]

Miscellaneous.

3.1 Full Force and Effect. Except as herein expressly amended, the Original Agreement shall remain in full force and effect and enforceable against each Party in accordance with its terms. Unless the context otherwise requires, the term “Agreement” as used in the Original Agreement shall be deemed to refer to the Original Agreement as amended hereby.

3.2 Counterparts. This Second Amendment may be executed in two or more counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument. The Parties agree that execution of this Second Amendment by exchanging executed signature pages in .pdf format shall have the same legal force and effect as the exchange of original signatures.

3.3 Precedence of Schedule 8.4 Over Other Agreements. Notwithstanding anything to the contrary in the Original Agreement or any other agreement entered into solely between Verrica and the Licensee, the Parties hereby agree that, as of the Second Amendment Effective Date, in the event of any conflict or inconsistency between the terms of Schedule 8.4 attached to this Second Amendment and the terms of the Original Agreement or any such other agreement, the terms of Schedule 8.4 shall govern and control. For the avoidance of doubt, the terms of Schedule 8.4 shall supersede and replace any conflicting or inconsistent provisions in the Original Agreement or any such other agreement, with respect to the subject matter addressed in Schedule 8.4.

[Remainder of page intentionally blank.]

IN WITNESS WHEREOF, the Parties have caused their duly authorized officers to execute and deliver this Second Amendment to the Collaboration and License Agreement as of the date first written above.

VERRICA PHARMACEUTICALS INC.

By: /s/ Jayson Rieger

Name: Jayson Rieger, Ph.D., MBA

Title: President and Chief Executive Officer

TORII PHARMACEUTICAL CO., LTD.

By: /s/ Nobumasa Kondo

Name: Nobumasa Kondo

Title: Representative Director, President and Chief Executive Officer I, Jayson Rieger, certify that:

Signature Page to Second Amendment to the Collaboration and License Agreement

EX-31.1 4 vrca-ex31_1.htm EX-31.1 EX-31.1

Exhibit 31.1

VERRICA PHARMACEUTICALS INC.

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I have reviewed this Quarterly Report on Form 10-Q for the period ended June 30, 2025 of Verrica Pharmaceuticals Inc. (the “registrant”);

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 12, 2025

     /s/ Jayson Rieger

    

     Jayson Rieger

    

     President and Chief Executive Officer

    

     (Principal Executive Officer)

    

EX-31.2 5 vrca-ex31_2.htm EX-31.2 EX-31.2

Exhibit 31.2

VERRICA PHARMACEUTICALS INC.

CERTIFICATION OF INTERIM PRINCIPAL FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, John J. Kirby, certify that:

I have reviewed this Quarterly Report on Form 10-Q for the period ended June 30, 2025 of Verrica Pharmaceuticals Inc. (the “registrant”);

(a)

(b)

(c)

(d)

(a)

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 12, 2025

     /s/ John J. Kirby

    

     John J. Kirby

    

     Interim Chief Financial Officer

    

     (Interim Principal Financial Officer)

    

EX-32.1 6 vrca-ex32_1.htm EX-32.1 EX-32.1

Exhibit 32.1

VERRICA PHARMACEUTICALS INC.

PRINCIPAL EXECUTIVE OFFICER AND INTERIM PRINCIPAL FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to the requirement set forth in Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. §1350), Jayson Rieger, President and Chief Executive Officer of Verrica Pharmaceuticals Inc. (the “Company”), and John J. Kirby, Interim Chief Financial Officer of the Company, each hereby certifies that, to the best of his knowledge:

The Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2025, to which this Certification is attached as Exhibit 32.1 (the “Periodic Report”), fully complies with the requirements of Section 13(a) or Section 15(d) of the Exchange Act; and

The information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

IN WITNESS WHEREOF , the undersigned have set their hands hereto as of the 12th day of August, 2025.


/s/ Jayson Rieger				/s/ John J. Kirby
Jayson Rieger				John J. Kirby
President and Chief Executive Officer (Principal Executive Officer)				Interim Chief Financial Officer (Interim Principal Financial Officer)

* This certification accompanies the Form 10-Q to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act (whether made before or after the date of the Form 10-Q), irrespective of any general incorporation language contained in such filing.