Verrica Pharmaceuticals Inc. (VRCA): Business Model Canvas [Apr-2026 Updated]

You're looking at Verrica Pharmaceuticals Inc. right now, and honestly, the story is all about executing the YCANTH launch while banking significant non-dilutive cash. As of Q3 2025, they pulled in $10.7 million from their Torii milestone, which really helps fund the focused commercial push for the only FDA-approved molluscum treatment. The near-term focus is clear: drive that $3.6 million in net product revenue while keeping SG&A tight at $9.4 million for the quarter, all while prepping for the common warts data read-out. This canvas breaks down exactly how they are managing that tightrope walk between commercial execution and pipeline development-dive in to see the full structure.

Verrica Pharmaceuticals Inc. (VRCA) - Canvas Business Model: Key Partnerships

You're looking at the core relationships Verrica Pharmaceuticals Inc. (VRCA) relies on to get its products to market and fund its pipeline development as of late 2025. These aren't just casual agreements; they are critical financial and logistical lifelines, especially given the company's recent financial restructuring.

Torii Pharmaceutical for Japanese and global common warts development

The collaboration with Torii Pharmaceutical Co. Ltd. is central to advancing YCANTH for common warts globally and securing near-term cash. This partnership was amended in July 2025 to kick off the global Phase 3 clinical trial for common warts, a condition affecting about 22 million patients in the United States alone with no current FDA-approved prescription therapy.

This amendment brought in immediate, non-dilutive capital for Verrica Pharmaceuticals Inc. The company was set to receive $18 million in cash milestone payments from Torii in 2025. Specifically, an accelerated $8 million milestone payment was received in July 2025 for initiating the global study, ahead of the original schedule. An additional $10 million cash milestone is due upon the approval of YCANTH for molluscum contagiosum in Japan, which is expected by the end of 2025. This collaboration revenue was significant, contributing $10.7 million in Q3 2025 alone.

Financially, Torii is shouldering a large part of the immediate clinical burden for the common warts Phase 3 program. Torii agreed to fund the first $40 million of out-of-pocket costs, which represents approximately 90% of the current clinical budget. Ultimately, the companies will split the total costs of the global Phase 3 program on a 50/50 basis. Verrica Pharmaceuticals Inc. will repay its half through future royalties, transfer price payments, and by offsetting amounts otherwise owed by Torii. Verrica Pharmaceuticals Inc. wisely retains ownership of global rights to YCANTH for all indications outside of Japan.

Lytix Biopharma AS for VP-315 (oncolytic peptide) licensing

Verrica Pharmaceuticals Inc. holds a worldwide license agreement with Lytix Biopharma AS to develop and commercialize VP-315, an oncolytic peptide immunotherapy, for dermatologic oncology indications, focusing initially on basal cell carcinoma (BCC) and squamous cell carcinoma. Lytix Biopharma AS retains the rights to all other cancer indications.

The financial structure of this partnership involves specific obligations for both parties. Verrica Pharmaceuticals Inc. is solely responsible for development, regulatory filings, and commercialization in dermatology, while Lytix Biopharma AS is responsible for manufacturing the active pharmaceutical ingredient (API). The agreed upon royalty rates start in the low double digits and escalate to the mid-teens based on net sales achieved. As of the first half of 2025, Verrica Pharmaceuticals Inc. planned to request an End-of-Phase 2 meeting with the FDA to determine the next steps for VP-315 development in BCC.

Specialty distribution partners for YCANTH logistics

Getting YCANTH to the point of care relies on a network of distribution partners, which includes local independent pharmacies, buying groups, hospitals, and government entities. Product revenue, net, for Verrica Pharmaceuticals Inc. is recorded upon the delivery of YCANTH to these distribution partners. FFF Enterprises is noted as one of the entities handling the distribution of YCANTH as of late 2025.

The logistics strategy evolved in early 2025; Verrica Pharmaceuticals Inc. launched a single applicator packaging configuration in the first quarter of 2025 to improve convenience and access for its independent and specialty pharmacy network. This was supported by a significant reduction in YCANTH inventory levels held by distribution partners in Q4 2024, suggesting healthier sell-through.

Here are the key volume and revenue metrics related to product movement through this channel as of Q3 2025:

OrbiMed for debt financing and credit agreement

OrbiMed was a critical lender, providing a $125 million debt financing facility in July 2023. Initially, $50 million was borrowed at closing, with an additional $75 million available in tranches contingent on achieving specified revenue milestones. The term loan bore interest at a rate based on the one-month SOFR, subject to a 4% floor per annum, plus an 8% margin per annum. This facility was set to mature in July 2028.

This debt relationship was fundamentally altered by a late 2025 financing event. Verrica Pharmaceuticals Inc. secured approximately $50 million in gross proceeds from a private investment in public equity (PIPE) financing, expected to close around November 25, 2025. A key purpose of this new capital was to fully retire the debt facility with OrbiMed. Specifically, $35.0 million of the net PIPE proceeds was earmarked to repay the outstanding obligations and terminate all commitments under the Credit Agreement with OrbiMed. This move eliminates the burden of interest and principal payments and extends the expected cash runway into mid-2027. Furthermore, an amendment to the Credit Agreement in 2025 saw the requirement for no 'going concern' qualification to financial statements waived for the remainder of 2025.

Contracted specialty pharmacy partners for prescription fulfillment

The fulfillment of YCANTH prescriptions is managed through a network of contracted specialty pharmacy partners. Dispensed applicator units are defined as those shipped to healthcare professionals from these contracted pharmacy partners for fulfillment. This is one of the three primary channels for product delivery, alongside sales to independent/regional pharmacies and direct buy-and-bill sales to clinics.

The success of this fulfillment channel is reflected in the unit sales growth. For the nine months ending September 30, 2025, Verrica Pharmaceuticals Inc. dispensed 37,642 applicator units, marking a 120% increase over the prior year period. The third quarter of 2025 saw 14,093 units dispensed, a sequential increase of 4.9% over the 13,434 units dispensed in the second quarter of 2025.

The company's cash position as of September 30, 2025, stood at $21.1 million. Finance: draft 13-week cash view by Friday.

Verrica Pharmaceuticals Inc. (VRCA) - Canvas Business Model: Key Activities

You're looking at the core actions Verrica Pharmaceuticals Inc. is taking to drive value from its assets as of late 2025. It's all about execution now, turning clinical progress into revenue and preparing the next wave of products.

Commercialization and sales of YCANTH in the U.S.

Verrica Pharmaceuticals Inc. is focused on growing the adoption of YCANTH for molluscum contagiosum, which serves as the financial base for other activities. The company has seen significant unit growth, indicating increasing provider acceptance.

The unit sales trajectory for YCANTH in the U.S. through the first three quarters of 2025 shows acceleration:

The gross product margin for the first quarter of 2025 was approximately 88%. Commercially insured patients pay $25 per YCANTH treatment visit for up to two applicators. The nine months ended September 30, 2025, saw dispensed units increase by 120% compared to the 17,119 units dispensed in the prior year period.

Global Phase 3 clinical trial for YCANTH in common warts

A major activity is advancing YCANTH for common warts, which represents one of the largest unmet needs in medical dermatology, with approximately 22 million patients in the U.S. alone. This is being done in partnership with Torii Pharmaceutical Co. Ltd.

Key milestones and cost-sharing details for this trial include:

• Torii Pharmaceutical provided an accelerated $8 million cash milestone payment in July 2025 upon initiation of the global Phase 3 program.
• Torii will fund the first $40 million of the trial costs, which is about 90% of the current trial budget.
• Verrica Pharmaceuticals Inc. and Torii will split the remaining costs on a 50/50 basis.
• The company expects first patient enrollment in the United States by the end of 2025.

Phase 2 (COVE-1) data for common warts showed that 51% of subjects in Cohort 2 achieved complete clearance of all treatable warts by Day 84. That trial also showed a 51% reduction in the number of warts compared to baseline by Day 84.

Research and development for pipeline assets like VP-315

Verrica Pharmaceuticals Inc. is actively developing VP-315, an oncolytic peptide immunotherapy for non-melanoma skin cancers, focusing initially on basal cell carcinoma (BCC). The company completed its End-of-Phase 2 meeting with the FDA and expects to report data soon.

Clinical efficacy data reported for VP-315 in its Phase 2 BCC trial includes:

• 97% calculated objective response rate (ORR).
• 86% overall tumor-size reduction.
• 51% complete histologic clearance rate.

The financial commitment to R&D reflects pipeline progression. Research and development expenses for the nine months ended September 30, 2025, totaled $6.3 million, down from $10.7 million for the same period in 2024. This decrease included a reduction of $2.7 million in clinical trial costs for VP-315.

Managing the supply chain and manufacturing of YCANTH

Key activities involve managing the physical product flow for YCANTH, especially concerning the Japanese market with Torii Pharmaceutical. Verrica Pharmaceuticals Inc. received a $10 million cash milestone payment in September 2025 when Torii received approval for YCANTH (TO-208) for molluscum in Japan. Verrica will initiate a manufacturing transfer to Torii for applicators sold in Japan over the next several years. In the interim, Verrica receives a transfer price for applicators manufactured by its partners.

Executing a focused, capital-efficient commercial strategy

The strategy involves leaning out operations to prioritize spend that creates value. This is evident in the reduction of operating expenses year-over-year while growing revenue.

Financial results for the first quarter of 2025 illustrate this efficiency:

• GAAP net loss was $9.7 million, compared to $20.3 million in Q1 2024.
• Non-GAAP net loss was $7.8 million, compared to $17.8 million in Q1 2024.
• Selling, general, and administrative expenses were $8.8 million in Q1 2025, down from $16.3 million in Q1 2024.

As of March 31, 2025, Verrica had aggregate cash and cash equivalents of $29.6 million. The company expects to launch YCANTH Rx, a new non-dispensing pharmacy option, in the fourth quarter of 2025. Finance: draft 13-week cash view by Friday.

Verrica Pharmaceuticals Inc. (VRCA) - Canvas Business Model: Key Resources

The Key Resources for Verrica Pharmaceuticals Inc. (VRCA) center on its proprietary product, intellectual property, financial stability, and human capital, all geared toward dermatology commercialization and development.

YCANTH (VP-102) is a critical resource, standing as the only FDA-approved molluscum treatment, having received its approval based upon the positive results from two successful Phase 3 clinical trials involving approximately 500 patients.

The company's foundation is secured by its intellectual property protecting the cantharidin-based formulation, which underpins the exclusivity of YCANTH in the market.

Financially, Verrica Pharmaceuticals Inc. maintained aggregate cash and cash equivalents of $21.1 million as of September 30, 2025. This position was bolstered by $18 million in cash milestone payments received from Torii Pharmaceutical in 2025.

The success of the commercial product is reflected in key operational metrics:

The company's human capital is structured as a lean, focused commercial and R&D team, a result of a restructuring announced in October 2024 aimed at reducing operating expenses by approximately fifty percent.

Specifics on the team and operational focus include:

• Sales force size was 36 representatives targeting key specialties as of the Q3 2025 report.
• Selling, General, and Administrative Expenses for Q3 2025 were $9.4 million, a decrease of $5.8 million from Q3 2024, showing cost control.
• The company plans to expand the sales force from 45 to 50 representatives in 2026.
• Research and development expenses for Q3 2025 were $2.2 million.

The clinical data from two successful Phase 3 trials for YCANTH supports its current market position and future indications, such as the ongoing global Phase 3 program for common warts, for which the first U.S. patient dosing was expected in Q4 2025.

The intellectual property is further supported by the company retaining global rights to YCANTH outside of Japan through its agreement with Torii Pharmaceutical.

Verrica Pharmaceuticals Inc. (VRCA) - Canvas Business Model: Value Propositions

You're looking at the core value Verrica Pharmaceuticals Inc. (VRCA) offers to the market, centered on its approved product, YCANTH, and its pipeline potential. The primary value proposition is delivering the first and only FDA-approved, non-surgical treatment for molluscum contagiosum, which is a highly contagious viral skin infection affecting an estimated 6 million people in the United States, primarily children.

For prescribers, the value lies in the convenience of the administration. YCANTH is a proprietary drug-device combination product containing cantharidin delivered via a single-use applicator, allowing for precise, topical, in-office application directly to the lesions. This in-office application model supports the prescriber workflow, which is key for adoption in dermatology and pediatric practices. The commercial momentum shows this is resonating; for the nine months ending September 30, 2025, Verrica Pharmaceuticals Inc. dispensed 37,642 YCANTH applicator units, a 120% increase over the same period in 2024.

The financial results from the third quarter of 2025 underscore the commercial traction. Net YCANTH product revenue for Q3 2025 was $3.6 million, contributing to total revenue of $14.3 million for the quarter, which also included $10.7 million in license and collaboration revenue. The company is definitely focused on expanding this base, aiming to establish YCANTH as the standard of care for molluscum contagiosum.

Beyond molluscum, Verrica Pharmaceuticals Inc. is offering the potential for a new standard of care in common warts, which the company views as the largest remaining unmet need in medical dermatology. This is being pursued with YCANTH (VP-102) in a global Phase 3 clinical program co-sponsored with Torii Pharmaceutical Co. Ltd. The initiation of this program triggered an $8 million milestone payment in July 2025, and the partner is committed to funding the first $40 million of the trial costs, representing approximately 90% of the current trial budget.

The pipeline extends further with VP-315, an oncolytic peptide candidate targeting non-melanoma skin cancers, including basal cell carcinoma (BCC). The company received positive feedback from the FDA regarding the study design for a Phase 3 program for VP-315 in BCC, signaling a clear path forward for this asset.

To ensure patients can access the approved therapy, Verrica Pharmaceuticals Inc. has structured access programs. For commercially insured patients using the YCANTH Copay Assistance Program, the out-of-pocket cost is just $25 per treatment visit, up to two applicators. This program has a lifetime maximum benefit of $2,805 or 4 applicators, whichever is met first. Furthermore, the company secured a permanent J-Code, J7354, for YCANTH, which became fully published on April 1, 2024, a move expected to streamline billing and accelerate utilization within the U.S. Medicaid and Medicare patient populations. A separate Patient Assistance Program exists for those with no or denied health insurance coverage who demonstrate qualifying financial need.

Here's a quick look at the commercial and pipeline milestones as of late 2025:

The in-office application model is supported by these access points, which help reduce the friction for both the provider and the patient. You can see the focus is clearly on maximizing the current asset while de-risking the future with pipeline advancements, which is a defintely sound strategy for a specialty pharma company.

• Only FDA-approved, non-surgical treatment for molluscum contagiosum.
• Convenient, topical, in-office application for prescribers.
• Potential new treatment for common warts (largest unmet need in dermatology).
• Pipeline asset (VP-315) targeting non-melanoma skin cancers.
• Patient copay assistance programs to ensure access.

Verrica Pharmaceuticals Inc. (VRCA) - Canvas Business Model: Customer Relationships

You're looking at how Verrica Pharmaceuticals Inc. (VRCA) connects with the dermatologists and patients who use YCANTH. It's a mix of direct engagement, system support, and digital outreach, all focused on driving adoption for their molluscum treatment.

Dedicated, focused sales force engaging prescribers

Verrica Pharmaceuticals Inc. has been refining its direct engagement strategy. As of October 2025, the total sales force stood at 45 sales representatives. This team is focused on getting YCANTH into the hands of prescribers. To be fair, the company has been streamlining costs; Selling, General, and Administrative Expenses in Q3 2025 were $9.4 million, a decrease of $5.8 million year-over-year, which included a reduction in sales force costs of about $3.5 million (excluding stock-based compensation). Still, the plan is to grow this direct engagement, with a stated intention to increase the sales force size to 50 in 2026.

High-touch support for reimbursement and patient access

Getting the product to the patient involves navigating insurance, and Verrica Pharmaceuticals Inc. has specific structures in place. Approximately 225 million lives are eligible to receive YCANTH covered by insurance. For commercially insured patients, the out-of-pocket cost is structured to be just $25 per YCANTH treatment visit, covering up to two applicators. The Verrica Patient Assistance Program exists to help eligible patients manage other out-of-pocket costs, which is a key part of their patient access strategy.

Here's a quick look at the adoption metrics supporting this access strategy:

Digital engagement and medical education for dermatologists

The company supports its field efforts with digital resources. Healthcare professionals can find information and request a representative at YCANTHPro.com. The acceleration in dispensed units, which saw a 32.8% sequential growth from Q1 2025 to Q2 2025, shows that this focused commercial and access strategy is working to drive demand among both dermatology and pediatric physician practices.

Launching YCANTH Rx, a new non-dispensing pharmacy option

A significant customer relationship enhancement is planned for the end of 2025. Verrica Pharmaceuticals Inc. expects to launch YCANTH Rx, a new non-dispensing pharmacy option, in the fourth quarter of 2025. This new option is specifically designed to streamline the prescription process for prescribers. It acts as a single point for writing prescriptions, assisting with benefits investigation, processing prior authorizations, and enrolling patients in the company's copay assistance program. Prescriptions sent to YCANTH Rx will then be routed to a contracted dispensing pharmacy within their network.

The focus for this new channel will be on metrics like time to fill and the total number of scripts fulfilled once it is live.

Verrica Pharmaceuticals Inc. (VRCA) - Canvas Business Model: Channels

You're looking at how Verrica Pharmaceuticals Inc. (VRCA) gets YCANTH to the people who need it, which is a mix of traditional and newer specialty routes as of late 2025. This is definitely a multi-pronged approach to market access.

Specialty distribution partners selling to pharmacies

Verrica Pharmaceuticals Inc. utilizes its distribution partners to move product to the pharmacy level. The company has noted a significant reduction in inventory levels at these distributors, suggesting that shipments are closely tracking underlying market demand from dispensed applicators for the second consecutive quarter as of Q2 2025. Net YCANTH revenue, which reflects shipments to these distribution partners, was $3.6 million in the third quarter of 2025.

Local independent and regional pharmacies

Verrica Pharmaceuticals Inc. has been actively adding local independent regional pharmacies to its distribution network, alongside its national specialty pharmacy partners. This expansion is part of a focused commercial strategy to make YCANTH available where healthcare professionals prefer to write their prescriptions. The company also launched a new single applicator packaging configuration in the first quarter of 2025, which was intended to facilitate initial purchases by these smaller entities.

Direct sales to physician offices via buy-and-bill model

The commercial strategy includes servicing physician offices directly through a buy-and-bill model. The single applicator packaging, introduced in the first quarter of 2025, was specifically designed to reduce the cash outlay required for physician practices under this model, which helps increase patient access. The company is also expanding its sales force, which is now targeting both dermatology and expanding into pediatric and primary care offices.

Contracted specialty pharmacy network for fulfillment

A key element for streamlining fulfillment is the upcoming launch of YCANTH Rx, a new non-dispensing pharmacy expected in the fourth quarter of 2025. This entity will centralize prescription processing, including benefits investigations and prior authorizations, before routing the prescription to a dispensing pharmacy within Verrica Pharmaceuticals Inc.'s network that is contracted with the patient's insurance plan. This is intended to improve speed to therapy by navigating the prior authorization process with fewer delays.

Global partner Torii Pharmaceutical for the Japanese market

Verrica Pharmaceuticals Inc. partners with Torii Pharmaceutical Co. Ltd. for the Japanese market, where Verrica maintains ownership of global rights for all indications outside of Japan. Torii received approval from the Japanese Ministry of Health, Labour and Welfare for YCANTH (TO-208) for molluscum contagiosum in September 2025, which triggered a $10 million cash milestone payment to Verrica Pharmaceuticals Inc.. Furthermore, the companies are advancing a global Phase 3 clinical trial for common warts, with costs split 50/50, and Torii funding the first $40 million of out-of-pocket costs, representing approximately 90% of the current trial budget. Verrica also expects to receive an $8 million milestone payment in July 2025 related to the initiation of this global study.

Here's a quick look at some operational metrics tied to the commercial execution across these channels for the first nine months of 2025:

The execution of the commercial strategy has focused on optimizing the existing channels while building new ones:

• Dispensed applicator units surpassed 10,000 units in a quarter for the first time in Q1 2025.
• The company is expanding its reach beyond dermatology into pediatric and primary care offices.
• The new single applicator packaging was expected in the first quarter of 2025.
• The company received $18 million in total cash milestone payments from Torii Pharmaceutical during 2025.
• The launch of YCANTH Rx is set for the fourth quarter of 2025.

Verrica Pharmaceuticals Inc. (VRCA) - Canvas Business Model: Customer Segments

You're looking at the core groups Verrica Pharmaceuticals Inc. (VRCA) targets with its current and near-term pipeline products. It's all about identifying the patient populations and the healthcare professionals who write the prescriptions. Here's the breakdown of those segments as of late 2025, grounded in their latest commercial performance and development plans.

U.S. Pediatric and Adult Patients (Age 2+) with Molluscum Contagiosum

This is the foundational segment for YCANTH®, the company's first and only FDA-approved treatment for molluscum contagiosum in patients aged two and older. The addressable market here is significant, with an estimated 6 million people in the United States affected by this highly contagious viral skin infection, primarily children.

Commercial traction shows this segment is adopting the product. For the third quarter of 2025, YCANTH dispensed applicator units totaled 14,093, which built upon the 13,434 units dispensed in the second quarter of 2025. Overall, for the nine months ended September 30, 2025, dispensed applicator units reached 37,642, marking a 120% increase year-over-year compared to the same period in 2024. The net YCANTH revenue for the third quarter of 2025 was $3.6 million.

The structure of access for these patients is also a key segment characteristic:

• Approximately 225 million lives are eligible to receive YCANTH covered by insurance.
• Commercially insured patients typically pay $25 per YCANTH treatment visit, covering up to two applicators.
• The average treatment cycle observed clinically is closer to 2 to 3 applicators per patient.

Dermatologists and Pediatricians (Primary Prescribers)

These are the gatekeepers for the molluscum segment. Verrica Pharmaceuticals Inc. is actively marketing to clinicians, noting growth in prescribing from both dermatologists and pediatricians. The commercial strategy has evolved to expand beyond just dermatology into pediatric and primary care offices, which is reflected in the growth metrics. The company is also preparing for potential seasonal demand, anticipating a slight increase in molluscum cases during the summer months due to outdoor activities.

The prescriber base is served by a product designed for precision:

Global Pharmaceutical Companies for Ex-U.S. Licensing

This segment involves strategic partnerships to access international markets, primarily through milestone payments and cost-sharing agreements. The key partner here is Torii Pharmaceutical Co. Ltd. for Japan and the global common warts program.

The financial impact from this segment in 2025 is concrete:

• License and collaboration revenue for the six months ended June 30, 2025, was $8.2 million, largely driven by an $8.0 million milestone payment from Torii.
• Verrica received a $10 million cash milestone payment in September 2025 after Torii secured approval for YCANTH (TO-208) in Japan for molluscum.
• An additional $8 million milestone payment was received in July 2025 for initiating the global Phase 3 clinical program for common warts with Torii.
• Torii agreed to fund the first $40 million of out-of-pocket costs for the global common warts study, covering approximately 90% of the current clinical budget.

Also, Verrica Pharmaceuticals Inc. received positive European regulatory feedback providing a pathway to registration for YCANTH for molluscum in Europe without needing additional Phase 3 studies, suggesting a future European customer segment is forming.

Patients with Common Warts and Basal Cell Carcinoma (Future Segments)

These represent significant future customer segments where Verrica Pharmaceuticals Inc. is actively advancing pipeline candidates. The common warts indication uses YCANTH (VP-102) and targets a large market with no current FDA-approved prescription therapies.

The scale of the common warts opportunity is substantial:

• The common warts indication targets 22 million patients in the United States alone.
• Verrica plans to dose the first patient in the U.S. Phase 3 trial in the fourth quarter of 2025.

For basal cell carcinoma (BCC), the candidate is VP-315. The company is preparing for the Phase 3 program for VP-315 and is exploring non-dilutive development and commercialization opportunities globally for this indication. The CEO believes each of these development programs, including BCC, may represent billion-dollar market opportunities.

Verrica Pharmaceuticals Inc. (VRCA) - Canvas Business Model: Cost Structure

When you look at the Cost Structure for Verrica Pharmaceuticals Inc., you see a company actively managing its operational burn while investing in pipeline expansion. The near-term costs are heavily influenced by commercialization efforts for YCANTH and the advancement of the common warts trial.

For the third quarter of 2025, the core operating expenses give you a clear picture of where the cash was going:

The SG&A figure of $9.4 million for Q3 2025 shows a significant reduction from the prior year, which management attributed to lower expenses related to commercial activities for YCANTH, including a reduction in the sales force and decreased marketing costs. That's smart cost control when you're trying to reach profitability.

The R&D spend of $2.2 million in the quarter reflects ongoing investment in the pipeline, which is critical for long-term value creation. The COGS of $0.8 million for the quarter included about $0.4 million in obsolete inventory costs, which slightly compressed the Gross Product Margin to 79.1% for the period.

You also have to account for financing costs and major clinical trial expenses, which are significant non-operating or specific program costs.

• Debt service and interest expense on the OrbiMed credit facility for Q3 2025 was $2.1 million.
• Verrica Pharmaceuticals announced in late November 2025 a plan to use $35.0 million of net proceeds from a private placement to fully settle and terminate this senior secured credit facility, which will eliminate the burden of future interest and principal payments.

The costs associated with the global Phase 3 common warts trial are structured in a highly capital-efficient way, which is a major positive for the cost structure. The total current trial budget is estimated around $40 million.

Here's how that cost burden is being managed:

• Torii Pharmaceutical is funding the first $40 million of the trial costs, which is approximately 90% of the current budget.
• Verrica Pharmaceuticals and Torii split the costs on a 50/50 basis.
• Verrica's half of the trial costs is being offset by amounts otherwise owed by Torii for future royalties, certain transfer price payments, and remaining development milestones.

This partnership arrangement effectively shields Verrica Pharmaceuticals from the majority of the upfront cash outlay for this pivotal trial, which is key to extending their cash runway.

Finance: draft 13-week cash view by Friday.

Verrica Pharmaceuticals Inc. (VRCA) - Canvas Business Model: Revenue Streams

The revenue streams for Verrica Pharmaceuticals Inc. are primarily anchored in the commercial performance of YCANTH and strategic financial achievements from its partnership with Torii Pharmaceutical Co. Ltd. in Japan.

For the third quarter of 2025, the company reported net product revenue from YCANTH of $3.6 million. This product revenue, net, relates directly to the delivery of YCANTH to Verrica's distribution partners. This figure compares to a negative net product revenue of $1.9 million in the same period of 2024, which had included a provision for product returns of $1.7 million. Overall, total revenue for Q3 2025 reached $14.3 million.

A significant portion of Q3 2025 revenue came from the Torii collaboration. Milestone and collaboration revenue from Torii totaled $10.7 million in Q3 2025. This $10.7 million was specifically comprised of a $10 million Torii milestone payment triggered by the Japanese approval of YCANTH (TO-208) for molluscum in September 2025, along with $0.7 million in collaboration revenue for supplies and development activity with Torii. You should note that Verrica received a total of $18 million in cash milestone payments from Torii throughout 2025, which included an accelerated $8 million payment in July 2025 for initiating the global Phase 3 program for common warts.

The commercial success of YCANTH is tracked through unit sales, which feed the product revenue stream. For instance, during the third quarter of 2025, YCANTH dispensed applicator units totaled 14,093. This reflects a 120% year-over-year increase in dispensed applicator units for the nine months ending September 30, 2025.

The revenue structure is built upon several components, which you can see detailed below:

The product sales mechanism involves distribution partners, which is where the net YCANTH product revenue originates. The company is also setting up future revenue streams tied to its Japanese partner's success.

Key elements defining the future and current product revenue streams include:

• Product sales via distribution partners for the US market.
• Direct office purchases contributing to net product revenue.
• Potential future royalties from YCANTH sales in Japan.
• Transfer price payments from Torii for applicators manufactured by Verrica's partners during the manufacturing transfer period.

Regarding the Japanese royalties, the agreement states that Verrica will begin receiving royalties related to net sales in Japan of applicators manufactured by Torii and/or its manufacturing partners after the transfer of at least one component of the manufacturing process, a transfer expected to take several years. Until then, Verrica continues to receive a transfer price for applicators manufactured by its partners for the Japanese market. The company's cash position as of September 30, 2025, stood at $21.1 million in cash and cash equivalents. Finance: draft 13-week cash view by Friday.