Verrica Pharmaceuticals Inc.

Please stand by. Your meeting is about to begin. Good afternoon, ladies and gentlemen. Welcome to the Verica Pharmaceuticals second quarter 2026 corporate update conference call. At this time, all participants are in a listen-only mode. After the speaker's prepared remarks, there will be a question-and-answer session. To register to ask a question at any time, please press star 1 on your telephone. If you would like to remove yourself from the queue, please press star 2. As a reminder, this conference is being recorded. I would now like to turn the call over to our host, Mr. Kevin Gardner of LifeSci Advisors. Please go ahead, sir.

Thank you, operator. Hello, everyone, and welcome to Verica Pharmaceuticals' second quarter 2026 corporate update conference call. With me on the line this evening are Jason Rieger, President and Chief Executive Officer, Noah Rosenberg, Chief Medical Officer, John Kirby, Interim Chief Financial Officer, David Zawitz, Chief Operating Officer, and Chris Chapman, Chief Commercial Officer. As a reminder during today's call, management will make forward-looking statements. These forward-looking statements are based on the company's current expectations and involve inherent 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, management 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 compared to their closest GAAP equivalents. The earnings released at the company issued today includes GAAP to non-GAAP reconciliations for these measures and is also available on the investor relations section of Verica's website. I'll now turn the call over to Verica's President and CEO, Jayson Rieger.

Thank you, Kevin. Good evening, everyone, and thank you for joining us for our second quarter 2026 corporate update call. We've made major progress at Verica during the quarter and in the week since. It's certainly an exciting time at Verica. Today, we will cover the quarterly results first, but I also want to spend some time discussing the non-dilutive financing we announced today as well as our partnership for YCAMP in Israel. I'll speak more on each of those in a few minutes. During the quarter, we more than doubled the percent unit growth of YCAMP from the previous quarter, demonstrating both strong market demand for YCAMP and continued improvements in execution from our commercial team. This momentum reinforces our view that a significant unmet need remains in the treatment of molluscum and YCAMP is well positioned to become the standard of care. While we focus on growing the YCAMP business, we are also advancing our product pipeline and are making meaningful progress with each asset. In June, we and our partner, Torrey Pharmaceutical, a subsidiary of Shinogi, dosed the first patients in the second pivotal phase three trial, also known as COVE-3, and the recruitment in the first pivotal trial, COVE-2, remains on schedule. with expected top line data in mid-2027 based on our current projections. We also continue to advance planning activities for our phase three ready oncology asset, BP315, for the treatment of basal cell carcinoma. And we presented encouraging new phase two data at the Society for Investigative Dermatology annual meeting in May. In the week since the quarter ended, We also announced a distribution agreement that will allow our new partner, Madomi Pharma, to bring YCAMS to Moleskine patients in Israel. And perhaps most importantly, today we announced new non-dilutive financing from our largest investor, Paul Manning, which we believe will extend our cash runway into 2028 based on our current operating plan. I'll now provide a detailed update on our YCAMS business. In the second quarter, Total revenue was $5.9 million, including USY Camp's net product revenue of $5.1 million, an increase of 18.7% over the first quarter, and an additional $0.8 million of licensed collaboration revenue associated with our partnership with Tori. dispensed applicator units for WICAMP increased to 19,626 in the second quarter, up more than 28% from the first quarter, which grew over 12% from the fourth quarter of 2025. This accelerating unit growth reflects momentum in prescriber adoption of WICAMP and the impact of our retargeting and segmentation of the molluscum prescriber base. Even with this quarterly growth, we believe we are just scratching the surface of the patient universe afflicted by molluscum in the United States. In this quarter, we observed particularly strong growth in demand from commercially insured patients who depend on our co-pay assistance program for their access to Y-Camp, while we also began emerging from deductible season. Our priority continues to be for all eligible patients to have access to Y-Camp, as we believe that prescribers value consistency in being able to treat their patients with as few access hurdles as possible. Just as we initiated our prescriber retargeting strategy during the quarter, we have been hard at work evaluating and enhancing our patient access programs. A good example is a recent change we implemented in July, providing refills at $0 copay for eligible commercially insured patients. This further reduces the financial burden for caregivers and also allows the prescriber to focus on the best treatment course for their patient if additional applicators are required. Alongside our momentum of YCAMP in the U.S., we would also like to acknowledge our partner, Tori, for its continued growth of YCAMP in Japan following its launch earlier this year. As a reminder, we currently supply YCAMP applicators to Tori for the Japanese market, and we receive a transfer price a portion of which offsets Verica's share of the clinical costs for the Global Common Warts program. We also continue to pursue opportunities to launch Y-CAMP outside the United States and Japan. Just a few weeks ago, we announced an exclusive distribution, marketing, and supply agreement with Midomi Pharma to commercialize Y-CAMP for the treatment of molluscum in Israel. Midomi has a strong track record of bringing innovative new therapies to patient populations with limited available treatments, and we look forward to working with them to establish YCAMP as their new standard of care for Maleska. Madomi will now prepare a regulatory submission for approval in Israel. For commercial sales, we will receive 60% of net selling price of YCAMP sold by Madomi. That is in addition to up to $8.2 million in regulatory and commercial milestone payments. Turning to our pipeline, we made meaningful progress in our global phase three program studying Y-CAMP as a potential treatment for common warts during the second quarter. As a critical part of our Y-CAMP strategy, we remain focused on the opportunity to expand the label to include common warts, which impacts approximately 22 million people in the US alone, more than three times the size of the molluscum patient population. There are no FDA approved therapies for common warts today, and since about half of the patients who seek treatment are children, we believe our field force that is already selling Y-cancer molluscum to pediatricians, dermatologists and pediatric dermatologists will be well positioned to detail the product to these prescribers diagnosing common warts. As a reminder, Torrey is funding the first $40 million of the cost of the Global Phase III program, representing approximately 90% of the current trial budget. with the two companies splitting overall program costs on a 50-50 basis. Verica's portion is expected to be paid at a future net transfer payments for commercial supply, payments relating to sales and regulatory milestones, and royalties arising from sales of Y Camp in Japan. In June, we announced that the first US patient was dosed in Cov3, our second pivotal trial in the CommonWorks program, and our development partner, Tori, also announced dosing of the first Japanese patient in this trial as well. We continue to enroll patients in the first pivotal study, COVE-2, and the long-term follow-up study, COVE-4. All studies are recruiting well, and we will provide further updates as each trial achieves full enrollment. As a reminder, Verica maintains ownership of the global rights to Y-CAMP for all indications in all territories outside of Japan and Israel, including common warts. Based upon our current projections, we now expect to present top-line data from the program in mid-2027. Turning to VP315 in basal cell carcinoma, we presented new Phase II data at the Society for Investigative Dermatology annual meeting in May, which shared details about a potential abscopal effect of VP315 that we are studying. Among nine subjects, there were 14 untreated non-target basal cell lesions that showed an overall 67% reduction in size, with three of those untreated lesions achieving complete histological clearance. This effect on untreated lesions is in addition to the meaningful reductions we've seen in the treated primary lesions themselves. We continue to believe in the potential for VP315 to change the paradigm for treatment of basal cell carcinoma and we continue to prepare for a Phase III program, including CRO selection and manufacturing of Phase III clinical supplies, based upon our favorable FDA feedback on the design of the registration program. As a reminder, Verica retains full global commercial rights to VP315 for non-metastatic skin cancers, including basal cell and squamous cell carcinoma. We believe these two indications each represent a significant commercial opportunity, and we continue to actively prepare for the Phase 3 program. Before turning the call over to John to review our financial performance, I would like to briefly touch on our announcement from earlier today of a new non-dilutive financing provided by an entity controlled by Paul Manning, Verica's largest shareholder and our chairman. This facility provides Verica with up to $27.5 million of capital and supports the continued growth of Y-CAMP, as well as our ongoing Phase III program studying Y-CAMP and the treatment of common warts. Under the terms of the facility, Verica may borrow up to $12.5 million immediately, with an additional $15 million becoming available upon Verica's achievement of certain revenue, growth, and other operational milestones, and our goal is to achieve those before the end of 2026. Importantly, this facility provides the potential for no scheduled payments of interest or principal until maturity in December of 2030. This flexibility will allow Verica to maximize deployment of its cash resources on advancing its business and pipeline. I would like to thank Paul Manning for his continued support of Verica and for his confidence in our team to execute on our commercial and development initiatives. With this strategic and financial support from our largest shareholder, we will work to grow our existing YCAMS business for Moleskine to achieve the extraordinary potential of YCAMS to become the first FDA-approved therapy for the treatment of common warts and continue to prepare for the Phase III VP315 program, which could change the paradigm for basal cell carcinoma. I'll now turn the call over to our Interim Chief Financial Officer, John Kirby, to review our second quarter financials.