Verrica Pharmaceuticals Inc. has announced the initiation of a global pivotal Phase 3 clinical trial for YCANTH (VP-102) to treat common warts, marking a significant expansion of the dermatology company's FDA-approved cantharidin-based therapy. The West Chester, Pennsylvania-based company entered into a second amendment to its collaboration agreement with Torii Pharmaceutical Co. Ltd. to advance the treatment into a condition affecting approximately 22 million patients in the United States alone.
"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. The executive emphasized that no FDA-approved prescription products are currently available to address this multi-billion dollar addressable market.
Financial Terms and Milestone Payments
Under the amended agreement, Verrica has secured a path to receive up to $18 million in non-dilutive capital during 2025. The company will receive an accelerated $8 million milestone payment from Torii in July 2025 for initiating the global study, ahead of the previous schedule that required waiting until the first patient was dosed. Additionally, Verrica stands to receive a $10 million cash milestone payment upon approval of YCANTH (designated as TO-208 in Japan) for molluscum contagiosum in Japan, with the approval decision expected by the end of 2025.
Torii will fund the first $40 million of out-of-pocket costs for the global study, representing approximately 90% of the current clinical budget. The companies will continue to split the costs of the global Phase 3 program on a 50/50 basis, with Verrica offsetting its portion through future royalties, transfer price payments, and remaining development milestones.
Clinical Development Timeline
Verrica expects to dose the first patient in the global Phase 3 program in the United States during the fourth quarter of 2025. The company maintains ownership of global rights to YCANTH for all indications in all territories outside of Japan, providing significant commercial potential for the expanded indication.
The trial represents an expansion of YCANTH's current approved indication for molluscum contagiosum, a highly contagious viral skin infection affecting approximately 6 million people in the United States, primarily children. YCANTH is currently the first and only commercially available product approved by the FDA to treat adult and pediatric patients two years of age and older with molluscum contagiosum.
Drug Profile and Market Position
YCANTH is a proprietary drug-device combination product containing a GMP-controlled formulation of cantharidin delivered via a single-use applicator that allows for precise topical dosing and targeted administration. The original FDA approval was based on positive results from two Phase 3 clinical trials in approximately 500 patients, which demonstrated that YCANTH was a safe and effective therapeutic for molluscum treatment.
The therapy currently has insurance coverage for approximately 225 million lives, with commercially insured patients paying $25 per YCANTH treatment visit for up to two applicators. Uninsured patients may be eligible for reduced-cost treatment through patient assistance programs.
Strategic Partnership and Manufacturing
As part of the collaboration, Verrica will initiate a manufacturing transfer to Torii for YCANTH applicators to be sold in Japan, a process expected to take several years. During the interim period, Verrica will continue receiving transfer pricing for applicators manufactured by its manufacturing partners. Following the transfer of at least one component of the manufacturing process, Verrica will begin receiving royalties related to net sales in Japan.
The expanded partnership reflects what Dr. Rieger described as extensive collaboration with regulatory authorities to optimize the clinical program across Japan and the United States, creating strategic, development, and financial synergies for both companies. Common warts represents what Verrica characterizes as "the largest remaining unmet need in medical dermatology," positioning the Phase 3 trial as a potentially transformative development for the company's commercial prospects.
