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Will Second Time Prove To Be Charm For Verrica's YCANTH?

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Shares of Verrica Pharmaceuticals Inc. (VRCA) have gained nearly 30% year-to-date as this dermatology therapeutics company looks forward to the PDUFA date of its lead product candidate YCANTH, which is slated for June 23, 2021.

YCANTH, also known as VP-102, is a proprietary drug-device combination of Cantharidin administered through the company's single-use precision applicator. YCANTH is proposed for the treatment of molluscum contagiosum, a highly contagious viral skin disease that affects approximately six million people - primarily children - in the United States.

This is YCANTH's second go-around with the FDA. Last July, the U.S. regulatory agency denied approval for YCANTH and sought certain aspects of the CMC (Chemistry, Manufacturing, and Controls) process for the drug/device combination, as well as Human Factors validation.

Currently, there is no approved treatment for molluscum contagiosum. If approved, YCANTH could potentially be the first product approved by the FDA to treat molluscum contagiosum. H.C. Wainwright analyst Oren Livnat expects YCANTH to achieve peak sales of about $400 million in the indication of molluscum contagiosum.

VP-102 is also being explored as a potential treatment for Common Warts and External Genital Warts. The compound has successfully completed phase II trials in the two indications.

Next in the pipeline is LTX-315, a first-in-class oncolytic peptide that is injected directly into a tumor to induce immunogenic cell death. Verrica intends to focus initially on basal cell and squamous cell carcinomas as lead indications for LTX-315.
An Investigational New Drug Application seeking FDA clearance for clinical testing of LTX-315 is expected to be submitted during the first half of this year.

Cash Position:

Verrica ended Sep.30, 2020, with cash, cash equivalents, and marketable securities of $71.9 million, which is expected to be sufficient to support planned operations at least through the fourth quarter of 2021.

VRCA has traded in a range of $6.02 to $16.91 in the last 1 year. The stock closed Friday's (Feb.19, 2021) trading at $14.90, up 1.98%.

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