Verrica Pharmaceuticals Inc.

Good morning, ladies and gentlemen, and welcome to the Verica Pharmaceuticals fourth quarter and year-end 2023 corporate update and earnings conference call. As a reminder, this conference is being recorded. I'll now turn the call over to our host, Kevin Gardner of LifeSci Advisors. You may begin your conference.

Thank you, operator. Hello, everyone, and welcome to Verica Pharmaceuticals fourth quarter and year-end 2023 Corporate Update and Earnings Conference Call. With me on the line this morning are Ted White, President and Chief Executive Officer of Verica Pharmaceuticals, Joe Bonaccorso, Chief Commercial Officer, Terry Kohler, Chief Financial Officer, Dr. Gary Goldenberg, Verica's Chief Medical Officer, and Chris Hayes, Verica's Chief Legal Officer. As a reminder during today's call, management will make forward-looking statements. These statements may include expectations related to the launch and commercialization of YCANT for the treatment of molluscum contagiosum in the United States, regulatory development, the development of Verica's product candidate, our expected cash runway, as well as overall business strategy and planned operations. These forward-looking statements are based on the company's current expectations and involve inherent risks and uncertainties. And based on those risks and uncertainties, Verica's actual results and the timing of events could differ materially from those anticipated in such forward-looking statements. Please see Verica's SEC filings for important risk factors. Verica cautions you not to place undue reliance on forward-looking statements and undertakes no duty or obligation to update any forward-looking statements as a result of new information, future events, or changes in expectations. In addition, during today's call, we will discuss certain non-GAAP financial measures. These non-GAAP financial measures are in addition to and not a substitute for or superior to measures of financial performance prepared in accordance with GAAP. There are a number of limitations related to the use of these non-GAAP financial measures versus their closest GAAP equivalents. Our earnings release that we issued today includes GAAP to non-GAAP reconciliations for these measures and is also available on the investor relations section of our website. I'll now turn the call over to Verica's President and CEO, Ted White. Ted?

Thank you, Kevin. And good morning, everyone. And thank you for joining us for our fourth quarter and year-end 2023 earnings call. I'd like to begin today's call by providing an update on Verica's commercial launch since our last quarterly earnings call back in November. I'll then ask our Chief Commercial Officer, Joe Bonacorso, to provide a more detailed review of our commercial activities and why can't launch. Following Joe's remarks, our Chief Financial Officer, Terry Kohler, will review our fourth quarter and year-end financial results. We'll then open up the call to take your questions. First and foremost, the organization continues to be focused on our top priority, the launch of YCAMP, which is the first and only commercially available FDA-approved treatment for molluscum contagiosum. With our first full quarter of commercial operations now complete, we're beginning to see traction in many of our targeted dermatology and institutional accounts as we execute our launch plan. Our fourth quarter execution resulted in $1.9 million in YCAMP net revenue, which we believe demonstrates our continued progress in driving adoption and reflects growing confidence in our prescriber base as we work to expand coverage of YCAMP to over 200 million commercial and Medicaid lives at the end of the year. As a further update on covered lives, in December, we agreed to terms and coverage under the medical benefit with two of the largest PBMs, We're working to finalize those agreements. However, coverage under those medical plans became effective on January 1, 2024. In addition to expanding our lives covered, on January 29th, we announced that the CMS issued a permanent J-code, J7354, for YCAMP, which is under the Healthcare Common Procedure Coding System process. We expect that the J-code for YCAMP will become fully published on April 1st, Securing that J-code for YCAMP represents a critical milestone in our commercial strategy, as the J-code enables providers to use the same code across all payers for reimbursement. We believe the J-code will help grow YCAMP utilization among the U.S. Medicaid patient populations and increase overall buy and bill account utilization by simplifying the billing and reimbursement process for YCAMP. In the fourth quarter, Verica also expanded our Weikamp product distribution capabilities when we entered into an agreement with Walgreens to distribute Weikamp through its specialty pharmacy. Walgreens joins Verica's existing specialty pharmacy, New Factor, who continues to be instrumental in helping the company distribute Weikamp among institutions, dermatology, and pediatric medical practices. The Walgreens partnership is exciting as we look forward to the opportunity to grow that relationship and leverage Walgreens' physical footprint and existing relationships with DERM on call to build community awareness and grow treatment rates. On February 1st, we executed a distribution agreement with DMS Pharmaceutical, a prime vendor to the U.S. Department of Defense, to provide WICAN to U.S. military installations around the world. The DMS relationship was in direct response to outreach from the US military treatment facilities requesting information on how to procure Y-CANTH for military personnel. As the fourth quarter came to a close, we transitioned into the first quarter. We saw wins on the institutional side of our business with major IDNs and hospitals adding Y-CANTH to formulary and placing orders. We expect these wins to continue as we see more success in our efforts to combat unapproved compounded contheritin, along with the anticipated publishing of the J-code on April 1st. Now I'd like to give you an update on our efforts to eliminate the amount of contheritin being improperly compounded for the treatment of molluscum. As you know, we have consistently taken the position that we intend to fully exercise our legal rights and execute on our multi-pronged strategy to clear the market of significant suppliers who are unlawfully compounding contheritin. At the same time, we've cautioned you that we may not see the results of our efforts immediately. Rather, we have said that as the cumulative effects of our plan started to take effect, we'd expect to see noticeable reduction in the availability of compounded contheritin within a 12-month period of time. Well, we believe we're on track and well on our way to hit our timeline. For example, The last 503B pharmacy in the United States on the FDA's Outsourcing Facility Product Report to report compounding cantharidin has discontinued compounding cantharidin and informed its over 400 institutional customers of the availability of Y-CAMP. In addition, a number of large national licensed 503A pharmacies have also agreed to discontinue compounding cantharidin. Consistent with this reduction in the supply of compounding cantharidin, we are regularly hearing in the market about the lack of availability of compounded contheridine and receiving inbound requests for Y-can from providers who are also informing us that they can no longer obtain compounded contheridine. As we've witnessed the available supply of compounded contheridine in the United States significantly decrease, we are further escalating our efforts to ban the illegal importation of compounded contheridine from Canada. and specifically the illegal importation of non-FDA-approved cantharidin products from dormer labs in Canada. Similar to the actionable results we saw from our efforts with the 503A and 503B pharmacies, we believe that as we continue to execute and escalate our intended strategies, the illegal importation of cantharidin from Canada will be discontinued. I'd now like to provide an update on our pipeline. On January 5th, we announced that the last patient has been dosed in part two of the company's phase two trial for VP315, a potential first-in-class oncolytic peptide for the treatment of basal cell carcinoma, or BCC. VP315 is a peptide that has been engineered to provide more targeted delivery to stimulate the patient's immune system and destroy cancer cells. We remain excited about the opportunity for this asset, which we view as either a potential non-surgical alternative to Mohs surgery or as a neoadjuvant chemotherapeutic for larger basal cell carcinomas, including advanced tumors or non-resectable basal cell. The ongoing Phase II trial is a two-part, open-label, multi-center, dose escalation, proof-of-concept study with a safety run-in designed to assess the safety, pharmacokinetics, and efficacy of BP315 when administered intratumorally with adults with biopsy proven BCC. The study enrolled 92 adult subjects with a histological diagnosis of basal cell carcinoma and at least one eligible target lesion. Our interpretation of the data from the study will focus on complete clearance as well as overall tumor shrinkage on patients who may have residual tumors. We expect initial results from the study in the first half of 2024. From an ex-U.S. perspective, in December, we announced that Verica's development and commercialization partner, Torrey Pharmaceuticals, reported positive top-line results from its Phase III trial of TO208, which is marketed as Y-CANTH in the United States, for the treatment of molluscum in Japan. The top-line results showed that the proportion of subjects achieving complete clearance of all treatable molluscum lesions at the completion of the confirmatory study, the primary endpoint of efficacy was statistically significant versus placebo. T0208 demonstrated similar results to WICANTS Phase III program and was well-tolerated during the study. Tori intends to submit a manufacturing and marketing application for the product in Japan based on the results of the Phase III trial and other studies currently being conducted. In addition to molluscum, as we disclosed on January 4th, we announced alignment with the FDA with respect to the Phase III clinical development plan for Y-CANTH for the treatment of common warts following our Type C meeting. More specifically, we reached agreement with the FDA on the overall design components of a pivotal Phase III study for WICAMP that would support an efficacy supplement for the proposed indication of common warts. We will be seeking additional FDA feedback on our updated clinical design in the second quarter of this year. I'll now turn the call over to Joe Bonacorso to review our commercial progress. Joe?