Verrica to receive a $8 million milestone payment for initiation of the global study in July 2025, ahead of previous schedule

Verrica Pharmaceuticals, a dermatology therapeutics company developing and selling medications for skin diseases requiring medical interventions, announced that it has entered into the second amendment to its existing Collaboration and Licensing Agreement with Torii Pharmaceutical Co. Ltd. to initiate a global pivotal Phase 3 clinical trial of Verrica’s product, YCANTH, for the treatment of common warts.

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“We are extremely excited to begin our global Phase 3 program in common warts, which has the potential to transform our company by expanding YCANTH’s label to one of the most prevalent skin conditions,” said Jayson Rieger, PhD, MBA, President and Chief Executive Officer of Verrica. Dr. Rieger continued, “This amendment reflects our extensive collaboration with Torii as we have together worked with regulatory authorities to optimize the clinical program across Japan and the United States, creating strategic, development and financial synergies for both companies. With no currently FDA approved prescription products available to address the approximately 22 million people in the U.S. impacted by common warts, we believe that expanding YCANTH’s label to include this indication would provide millions of patients with a new treatment option in this multi-billion dollar market. As part of the amended agreement, Verrica has now finalized a path to receive up to $18 million in new, non-dilutive capital in 2025, including an accelerated $8 million milestone payment from Torii to be paid in July 2025 and, if Torii obtains approval for molluscum contagiosum in Japan, which we expect to occur as early as the end of 2025, an additional milestone payment of $10 million in cash. Importantly, Verrica will also maintain its ownership of global rights to YCANTH for all indications in all territories outside of Japan.”

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Dr. Rieger continued, “Verrica is proud to embark on this clinical program with Torii, who continues to be an outstanding and supportive development partner. We also appreciate the continued support from OrbiMed, our lending partner, who has been of great assistance throughout the restructuring of our company and the implementation of our new commercial strategy for YCANTH. As a result of our continued execution of our strategy, we recently secured an amendment to our Credit Agreement with OrbiMed whereby the requirement that there be no ‘going concern’ qualification to our financial statements was waived for the remainder of 2025.”

Dr. Rieger added, “As we enter the second half of 2025, the added flexibility and non-dilutive cash resources from the amended agreements with Torii and OrbiMed place us in a far stronger position to continue executing on our YCANTH commercial strategy and moving forward with our label expansion efforts. We remain focused on driving demand for YCANTH as the only FDA approved and commercially available therapy for the treatment of molluscum contagiosum, and we look forward to providing an update on YCANTH dispensed applicator unit growth in July.”

Amendments to YCANTH Collaboration and License Agreement with Torii

  • Torii has agreed to accelerate the $8 million milestone payment to Verrica for initiating the global Phase 3 program to be triggered now, rather than waiting until the first patient is dosed in the trial, providing Verrica with a significant source of non-dilutive capital earlier than expected under the prior arrangement. Verrica expects to receive the $8 million cash payment from Torii in July 2025.
  • Torii has agreed to pay Verrica a $10 million milestone payment for the Japanese approval of YCANTH (TO-208 in Japan) for molluscum in cash, rather than as an offset to trial costs. The approval decision is expected to occur by the end of 2025.
  • Verrica expects to dose the first patient in the global Phase 3 program in the United States in the fourth quarter of 2025.
  • Torii will continue to split the costs of the global Phase 3 program with Verrica on a 50/50 basis and will pay the first $40 million of the trial costs, representing approximately 90% of the current trial budget. To repay its half of the trial costs, Verrica will offset amounts otherwise owed by Torii for future royalties, certain transfer price payments and remaining development milestones (not including the $8 million and $10 million milestone payments noted above).
  • Verrica will initiate a manufacturing transfer to Torii for YCANTH (TO-208) applicators to be sold in Japan, which is expected to take several years.  In the interim, Verrica will continue to receive from Torii a transfer price for applicators manufactured by Verrica’s manufacturing partners.  After the transfer of at least one component of the manufacturing process, Verrica will begin receiving royalties related to net sales in Japan of applicators manufactured by Torii and/or its manufacturing partners.

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Source – GlobeNewswire