Verrica's Ycanth Unlikely to Face Short-Term Competition, Analyst Updates Stock on FDA Approval
On Monday, the FDA approved VRCA Ycanth (cantharidin) topical solution from Verrica Pharmaceuticals Inc for the treatment of molluscum contagiosum (molluscum) in adult and pediatric patients two years of age and older.
Needham upgraded the stock to buy pending with a price target of $10.
Needham analysts Serge Bélanger and Rohit Bhasin said Ycanth's approval signifies the re-emergence of cantharidin, a blistering agent commonly used to treat warts.
While previously only available in compounding pharmacies, cantharidin will now be reintroduced into dermatological practices as an FDA-approved product.
Regulatory and financial uncertainties surrounding VRCA have been resolved, but the stock has come under downward pressure following FDA approval, suggesting "sell on news" sentiment.
Analysts say the current valuation underestimates Ycanth's opportunity to become the standard of care for mollusca and its potential for broader (initially off-label) use in other types of warts, which should appeal to big players in dermatology looking for complementary actives.
Needham Ycanth models generating peak sales of approximately $250 million based on a 15% market share of the molluscum market and a price of approximately $650/applicator. Ycanth is unlikely to see competition in the short term.
Ycanth's most near-term potential competitor is a berdazimer gel product (SB-206) developed by Novan Inc NOVN and is currently under review by the FDA with a PDUFA target action date of 01/05/24.
Novan recently filed for bankruptcy.
The analyst doesn't believe the SB206 is a strong competitor to the Ycanth (lower efficiency), and it's now unclear if the product will launch if approved.
Price Action: VRCA shares are up 9% at $5.57 last checked on Tuesday.
© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
On Monday, the FDA approved VRCA Ycanth (cantharidin) topical solution from Verrica Pharmaceuticals Inc for the treatment of molluscum contagiosum (molluscum) in adult and pediatric patients two years of age and older.
Needham upgraded the stock to buy pending with a price target of $10.
Needham analysts Serge Bélanger and Rohit Bhasin said Ycanth's approval signifies the re-emergence of cantharidin, a blistering agent commonly used to treat warts.
While previously only available in compounding pharmacies, cantharidin will now be reintroduced into dermatological practices as an FDA-approved product.
Regulatory and financial uncertainties surrounding VRCA have been resolved, but the stock has come under downward pressure following FDA approval, suggesting "sell on news" sentiment.
Analysts say the current valuation underestimates Ycanth's opportunity to become the standard of care for mollusca and its potential for broader (initially off-label) use in other types of warts, which should appeal to big players in dermatology looking for complementary actives.
Needham Ycanth models generating peak sales of approximately $250 million based on a 15% market share of the molluscum market and a price of approximately $650/applicator. Ycanth is unlikely to see competition in the short term.
Ycanth's most near-term potential competitor is a berdazimer gel product (SB-206) developed by Novan Inc NOVN and is currently under review by the FDA with a PDUFA target action date of 01/05/24.
Novan recently filed for bankruptcy.
The analyst doesn't believe the SB206 is a strong competitor to the Ycanth (lower efficiency), and it's now unclear if the product will launch if approved.
Price Action: VRCA shares are up 9% at $5.57 last checked on Tuesday.
© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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