Fourth time’s a charm for Verrica Pharmaceuticals Inc. as the U.S. FDA has approved Ycanth (cantharidin) to treat molluscum contagiosum in those ages 2 and older.

Three complete response letters (CRL) have stood in the treatment’s way for the past three years. The NDA had a PDUFA date of July 23. The approval was announced by Verrica on July 21.

Despite the approval, Verrica’s stock had dropped precipitously in early trading on July 24 as shares were down 30% to about $5.20 each.

Molluscum, which is caused by the molluscipoxvirus, results in multiple raised flesh-colored papules, or skin lesions, for those infected. It affects about 6 million people in the U.S. annually, with the greatest incidence in children ages 1 to 14.

Novan Inc., with its berdazimer gel, is a near competitor. The FDA set a Jan. 5, 2024, PDUFA for the topical gel. But the company has bigger issues to deal with, including a July 17 agreement to sell substantially all of its assets, including the gel, as it files for chapter 11 protection.

This morning, July 24, Verrica kept the momentum going by entering a non-binding term sheet for a term loan facility of up to $125 million, which it said it expects will close by the end of this week. Verrica said it plans to borrow $50 million immediately after the close, with additional capital available in tranches based on hitting revenue milestones. The facility is a five-year term loan that matures in July 2028.

Verrica is getting the jump on the molluscum contagiosum market after navigating tricky and repeated challenges to its NDA. The first PDUFA date for the company’s treatment was set for July 13, 2020, and then, in late June 2020, Verrica received a letter from the FDA stating there were deficiencies in the NDA that precluded discussion of labeling and postmarketing requirements and commitments.

The first CRL came in July 2020, with the company saying the FDA asked for more information regarding certain aspects of the chemistry, manufacturing and controls process for the drug/device combination product, as well as human factors validation information. The other two CRLs were based on manufacturing problems.

The approval was based on data from the VP-102 program, including results from the pivotal Cantharidin Application in Molluscum Patients-1 (CAMP-1) and CAMP-2 studies. Results from the two clinical trials showed 46% and 54% of subjects treated with VP-102, respectively, achieved complete clearance of all treatable molluscum lesions at day 84 vs. 18% and 13% of subjects in the placebo groups (p<0.0001). By day 84, VP-102-treated subjects had a 69% and 83% mean reduction in the number of molluscum lesions, a prespecified endpoint, in CAMP-1 and CAMP-2, respectively, compared to a 20% increase and a 19% reduction for subjects on placebo. VP-102 also was well-tolerated in both trials.

Administered topically, VP-102 is a solution of 0.7% cantharidin, a substance derived from the blister beetle Cantharis vesicatoria and designed to inhibit protein phosphatases 1 and 2A.

The device component is a single-use applicator designed by Verrica, aimed at providing precise administration – keeping cantharidin away from healthy skin – and packaging for long-term drug stability.