VRCA 10-K & 10-Q changes, risk factors and insider trading

•We have incurred significant losses since our inception. We expect to incur losses until revenue from YCANTH (VP-102) for the treatment of molluscum contagiosum is sufficient to fund our operations, if ever, and we may never achieve or maintain profitability.

•We will need substantial additional funding to meet our financial obligations and to pursue our business objectives, including the continued commercialization of YCANTH (VP-102) for the treatment of molluscum contagiosum as well as the development of YCANTH (VP-102) for the treatment of common warts and VP-315 for the treatment of basal cell carcinoma. If we are unable to raise capital when needed, we could be forced to curtail our planned operations and the pursuit of our growth strategy, which could have a material adverse impact on our financial results and future operations.

•We have a limited operating history and limited history of commercializing products, which may make it difficult for you to evaluate the success of our business to date and to assess our future viability.

•Greater than expected returns of YCANTH (VP-102) may exceed our reserve for returns, which would adversely affect our revenue and operating results.

•While our financial statements have been prepared assuming that we will continue as a going concern, we do not currently have sufficient working capital to fund our planned operations for the next twelve months and substantial doubt exists as to our ability to continue as a going concern.

•If we are unable to successfully develop, receive regulatory approval for and commercialize any additional product candidates, or experience significant delays in doing so, our business will be harmed.

•We face substantial competition which may result in a smaller than expected commercial opportunity and/or others discovering, developing or commercializing products before or more successfully than we do.

•The success of YCANTH (VP-102) for the treatment of molluscum contagiosum and our product candidates will depend significantly on coverage and adequate reimbursement or the willingness of patients to pay for these procedures.

•The market for YCANTH (VP-102) for the treatment of molluscum contagiosum and our product candidates may not be as large as we expect.

•We currently rely on a third party to supply the raw materials and applicator components used for YCANTH (VP-102) and if we encounter any extended difficulties in procuring, or creating an alternative for those components or our raw material in YCANTH (VP 102) or any of our product candidates, our business operations would be impaired.

•We have entered into, and may seek additional, collaborations with third parties for the development or commercialization of our product candidates. If those collaborations are not successful, we may not be able to capitalize on the market potential of these product candidates.

•If we are unable to obtain or protect intellectual property rights related to any of our product candidates, we may not be able to compete effectively in our market.

•The trading price of the shares of our common stock may be volatile, and purchasers of our common stock could incur substantial losses.

•If we fail to meet all applicable requirements of Nasdaq and Nasdaq determines to delist our common stock, the delisting could adversely affect the market liquidity of our common stock and the market price of our common stock could decrease.

We are a dermatology therapeutics company developing and sellingcommercializing medications for the treatment of dermatologic diseases, including skin diseases requiring medical intervention.cancers. Since inception, we have incurred significant net losses. We incurred net losses of $76.6$17.9 million and $67.0$76.6 million for the years ended December 31, 20242025 and 2023,2024, respectively. As of December 31, 2024,2025, we had an accumulated deficit of $307.0$324.9 million. Since inception, we have financed our operations primarily through the sale of equity and equity-linked securities and through borrowings under loan agreements.

We have devoted substantially all of our financial resources and efforts to the development of our novel topical solution of cantharidin and our product, YCANTH (VP-102), for the treatment of molluscum contagiosum,molluscum, including preclinical studies and clinical trials. YCANTH (VP-102) was approved by the Food and Drug Administration, or FDA, for the treatment of molluscum contagiosum in July 2023. We are also developing YCANTH (VP-102) as a treatment for common warts and VP-315 for the treatment of basal cell carcinoma, or BCC,BCC and potentially additional dermatological oncology indications.

Therefore, we expect to continue to incur significant expenses and operating losses until revenue from YCANTH (VP-102) for the treatment of molluscum contagiosum is sufficient to fund our operations. Our net losses may fluctuate significantly from quarter to quarter and year to year. Our expenses may increase s as we:

•continue to establish our commercialization infrastructure and scale up external manufacturing and distribution capabilities to commercialize YCANTH (VP-102) for the treatment of molluscum contagiosum and product candidates for which we may obtain regulatory approval;

•continue our ongoing clinical programs evaluating VP-102 for the treatment of common warts and VP-315 for the treatment of BCC and potentially additional dermatological oncology indications;

•pursue regulatory approvals for YCANTH (VP-102) for the treatment of common warts and VP-315 for the treatment of BCC;

•seek to in-license or acquire additional product candidates for other dermatological conditions;

•adapt our regulatory compliance efforts to incorporate requirements applicable to marketed products;

•maintain, expand and protect our intellectual property portfolio;

•hire and retain clinical, manufacturing, commercialization and scientific personnel; and incur additional legal, accounting and other expenses in operating as a public company.

To become and remain profitable, we must succeed in commercializing YCANTH (VP-102) for the treatment of molluscum contagiosum and developing and eventually commercializing product candidates that generate significant revenue. This will require us to be successful in a range of challenging activities, including the continued commercialization of YCANTH (VP-102) for the treatment of molluscum contagiosum,molluscum, completing preclinical testing and clinical trials of our product candidates, obtaining regulatory approval, and manufacturing, marketing and selling any product candidates for which we may obtain regulatory approval, as well as discovering and developing additional product candidates. We are only in the preliminary stages of most of these activities. We may never succeed in these activities and, even if we do, may never generate revenue that is significant enough to achieve profitability.

We will need substantial additional funding to meet our financial obligations and to pursue our business objectives, including the continued commercialization of YCANTH (VP-102) for the treatment of molluscum contagiosum as well as the development of YCANTH (VP-102) for the treatment of common warts and VP-315 for the treatment of BCC. If we are unable to raise capital when needed, we could be forced to curtail our planned operations and the pursuit of our growth strategystrategy, which could impact our ability to continue as a going concern.

Identifying potential product candidates and conducting preclinical testing and clinical trials is a time-consuming, expensive and uncertain process that takes years to complete, and we may never generate the necessary data or results required to obtain regulatory approval and achieve product sales of our product candidates. We expect to continue to incur significant expenses over the next several years as we commercialize YCANTH (VP-102) for the treatment of molluscum contagiosum,molluscum, pursue clinical trials and marketing approval for YCANTH (VP-102) for the treatment of common warts and potentially other indications, pursue clinical trials and marketing approval for VP-315 for the treatment of BCC and potentially additional dermatological oncology indications and advance any of our other product candidates we may develop or otherwise acquire. YCANTH (VP-102), for the treatment of molluscum contagiosum and our product candidates, if approved, may not achieve commercial success. Although YCANTH (VP-102) has been approved by the FDA for the treatment of molluscum contagiosum,molluscum, we do not expect to generate substantial revenue from YCANTH (VP-102) in the near term. We have incurred, and expect to continue to incur, significant commercialization expenses related to product sales, marketing, distribution and manufacturing of YCANTH (VP-102) as well as any product candidates for which we receive marketing approval.

Based on our current business plan and current capital resources, consisting of cash and cash equivalents of $46.3$30.1 million as of December 31, 2024,2025, combined with the uncertainty regarding the availability of additional funding and considering our debt obligations, including a requirement to maintain cash, cash equivalents and investments of at least $10.0 million at all times,funding, we have concluded that there is substantial doubt regarding our ability to continue as a going concern within one year after the date thesethe accompanying financial statements are issued. This estimate is based on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we expect. If we are unable to obtain sufficient funding, our business, prospects, financial condition and results of operations will be materially and adversely affected and we may be unable to continue as a going concern. If we are unable to continue as a going concern, we may have to liquidate our assets and may receive less than the value at which those assets are carried on our audited financial statements, and it is likely that investors will lose all or a part of their investment. In addition, if there remains substantial doubt about our ability to continue as a going concern, investors or other financing sources may be unwilling to provide additional funding to us on commercially reasonable terms or at all.

Changes may occur beyond our control that would cause us to consume our available capital before that time, including changes in and progress of our commercialization activities for YCANTH (VP-102) for the treatment of molluscum contagiosum,molluscum, our development activities, acquisitions of additional product candidates, and changes in regulation. Our future capital requirements will depend on many factors, including:

•the progress and success of commercializing YCANTH (VP-102) for the treatment of molluscum contagiosum in the United States;

•the costs and timing of commercialization activities, including product manufacturing, marketing, sales and distribution, for YCANTH (VP-102) for the treatment of molluscum contagiosum and any of our product candidates for which we may receive marketing approval;

•the scope, progress, costs and results of our development programs evaluating YCANTH (VP-102) as a potential treatment for common warts, as well as VP-315 for the treatment of BCC;

•the extent to which we develop, in-license or acquire product candidates or technologies;

•the number and development requirements of product candidates that we may pursue;

•the costs, timing and outcome of regulatory review of our product candidates;

•the revenue received from commercial sales of YCANTH (VP-102) for the treatment of molluscum contagiosum and any of our product candidates for which we receive marketing approval;

•our ability to establish collaborations to commercialize YCANTH (VP-102) for the treatment of molluscum contagiosum or any of our product candidates outside the United States; and the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending any intellectual property-related claims.

We will require additional capital to continue to commercialize YCANTH (VP-102) for the treatment of molluscum contagiosum,molluscum, and to develop YCANTH (VP-102) for the treatment of common warts, and VP-315 for the treatment of BCC and potentially other dermatological indications. If we receive regulatory approval for any of our product candidates, we expect to incur significant commercialization expenses related to product manufacturing, sales, marketing and distribution, depending on where we choose to commercialize. Additional funds may not be available on a timely basis, on favorable terms, or at all, and such funds, if raised, may not be sufficient to enable us to continue to implement our long-term business strategy. If we are unable to raise sufficient additional capital, we could be forced to curtail our planned operations and the pursuit of our growth strategy. For example, we have paused the development of VP-102 for the treatment of external genital warts and VP-103 for the treatment of plantar warts due to our cash position.

Until such time, if ever, as we can generate substantial revenue, we may finance our cash needs through a combination of equity offerings, debt financings and license and collaboration agreements. To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a common stockholder. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. For instance, under the Loan Agreements as described below, we are restricted from paying dividends or making other distributions or payments on our capital stock, subject to limited exceptions.

We have a limited operating history and limited history of commercializing products,commercialization, which may make it difficult for you to evaluate the success of our business to date and to assess our future viability.

We commenced operations in 2013, and ourOur operations to date have been largely focused on raising capital and developing YCANTH (VP-102) for the treatment of molluscum contagiosum and our product candidates, including undertaking preclinical studies and conducting clinical trials. YCANTH (VP-102), which was approved by the FDA for treatment of molluscum contagiosum in July 2023, is our only approved product and became commercially available in August 2023. We have not yet demonstrated our ability to successfully manufacture a product on a commercial scale, or arrange for a third party to do so on our behalf, or conduct sales and marketing activities necessary for successful commercialization over an extended timeframe. Consequently, any predictions you make about our future success or viability may not be as accurate as they could be if we had a longer operating history or a history of successfully commercializing products.

While our financial statements have been prepared assuming that we will continue as a going concern, we do not currently have sufficient working capital to fund our planned operations for the next twelve months and substantial doubt exists as to our ability to continue as a going concern. Based on our current business plan and current capital resources, consisting of cash and cash equivalents of $46.3$30.1 million as of December 31, 2024,2025, combined with the uncertainty regarding the availability of additional funding and considering our debt obligations, including a requirement to maintain cash, cash equivalents and investments of at least $10.0 million at all times,funding, we have concluded that there is substantial doubt regarding our ability to continue as a going concern within one year after the date thesethe accompanying financial statements are issued.

We currently have only one product that is approved for commercial sale. We have invested substantially all of our efforts and financial resources in the development of YCANTH (VP-102) for the treatment of molluscum contagiosum.molluscum. We are also developing YCANTH (VP-102) as a treatment for common warts, and VP-315 for the treatment of BCC and potentially additional dermatological oncology indications. Our ability to generate substantial revenue from YCANTH (VP-102) for the treatment of molluscum contagiosum or our product candidates will depend heavily on their successful development, regulatory approval and commercialization. The success of YCANTH (VP-102) for the treatment of molluscum contagiosum and any product candidates that we develop or otherwise may acquire which receive regulatory approval will depend on several factors, including:

•timely and successful completion of preclinical studies and our clinical trials;

•successful development of, or making arrangements with third-party manufacturers for, our commercial manufacturing processes for YCANTH (VP-102) and any of our product candidates that receive regulatory approval;

•receipt of timely marketing approvals from applicable regulatory authorities;

We are a dermatology therapeutics company developing and sellingcommercializing medications for the treatment of dermatologic diseases, including skin diseases requiring medical intervention.cancers. Our commercial product and portfolio of product candidates are clinician administered therapies in areas of high unmet need. Our current product portfolio consists of one approved product with several potential follow-on indications, as well as an additional pipeline product. Our commercial product, YCANTH (VP-102), was approved by the U.S. Food and Drug Administration, or FDA, in July 2023 for the treatment of molluscum contagiosum in adult and pediatric patients two years of age and older. YCANTH (VP-102) is a proprietary drug-device combination that contains a GMP-controlled formulation of cantharidin. We are currently developing YCANTH (VP-102) for a potential follow-on indication for the treatment of common warts. Our second development candidate, VP-315, is an oncolytic peptide-based injectable therapy for the potential treatment of dermatology oncologic conditions, including basal cell carcinoma or BCC.

We commercially launched YCANTH (VP-102) in August 2023 in the United States for the treatment of molluscum contagiosum.molluscum. We have built a specialized sales organization consisting of 3540 employee sales representatives in the United States focused on pediatric dermatologists, dermatologists, pediatricians and select pediatricians.other Weprimary alsocare planhealthcare providers, or HCPs. In 2026, we expect to advanceexpand YCANTHthe (VP-102)field forsales commonforce wartsto through50 aemployee separatesales regulatory approval process.representatives. In the future,fourth quarter of 2025, we also intendlaunched YCANTH-Rx, a non-dispensing pharmacy, in order to pursuestreamline commercializationand simplify the provider experience by allowing offices to send YCANTH prescriptions to the same place, regardless of the patient's insurance coverage, for YCANTHtriage (VP-102)to foran thein-network treatmentdispensing of molluscum contagiosum, as well as YCANTH (VP-102) for common warts if approved, in additional geographic regions, either alone or together with a strategic partner.pharmacy.

Since our inception in 2013, our operations have focused on developing YCANTH (VP-102) and expanding our development pipeline (which includes VP-315), organizing and staffing our company, business planning, raising capital, establishing our intellectual property portfolio andportfolio, conducting clinical trials.trials and commercializing YCANTH. We have funded our operations primarily through the sale of equity and equity-linked securities and through borrowings under loan agreements.

On July 26, 2023, we entered into a credit agreement with OrbiMed Royalty & Credit Agreement,Opportunities IV, LP, or OrbiMed pursuant to which we borrowed $50.0 million under the Loan Facility (as defined in Note 10) on July 26, 2023, or the Credit Agreement, resulting in net proceeds of approximately $44.1 million after payment of certain fees and transaction related expenses. Amounts borrowed under the Loan Facility willwere scheduled to mature on July 26, 2028. BasedOn onNovember 26, 2025, following our netPrivate revenuePlacement attributabledescribed tobelow, YCANTHwe onfully extinguished the Loan Facility by paying a trailingcash 12-month basis not meeting a specified amount set forth in the Credit Agreement as of December 31, 2024, we became obligated to start making principal payments starting on January 1, 2025. We are obligated to repay the principalsettlement amount of the$35.0 loan on the last day of each month in equal monthly installments through the maturity date, together with the applicable repayment premium and the exit fee.million.

InOn November 2024,23, 2025, we closedentered into Securities Purchase Agreements with certain investors, or the Purchasers, pursuant to which we sold and issued in a private placement, or the Private Placement, an underwritten offeringaggregate of 45,518,243(i) shares of our common stock (and, in lieu of common stock to certain investors that so chose, pre-funded warrants to purchase 2,235,9556,499,826 shares of our common stock, (ii) with respect to certain Purchasers, pre-funded warrants to purchase 5,305,164 shares of common stock, or the Pre-Funded Warrants),Warrants, in lieu of shares and (iii) in either case, accompanying Series AC warrants to purchase 23,877,0992,951,241 shares of our common stock at an exercise price of $1.0680 per share of common stock, or the Series AC Warrants,Warrants. and Series B warrants toThe purchase 23,877,099 shares of our common stock at an exercise price of $1.3350 per share of common stock, or the Series B Warrants, at a combined public offering price of $0.89 per share of common stock and accompanying Series AC Warrant was $4.2413 per share and Seriesthe Bpurchase Warrantsprice (orfor $0.8899 perthe Pre-Funded WarrantWarrants and accompanying Series AC andWarrant $4.2412 per share. The Series BC Warrants). Theexpire offeringon resultedNovember in23, 2030. We received net proceeds of $39.6$49.1 million,million from the private placement transaction, after deducting underwritingplacement discountsfees andof commissions,$0.9 and offering expenses.million.

As of December 31, 2024,2025, we had cash and cash equivalents of $46.3$30.1 million.million, which we believe to be sufficient to support our planned operations into the first quarter of 2027. Based on our current business plan and current capital resources, combined with the uncertainty regarding the availability of additional funding and considering our debt obligations, including a requirement to maintain cash, cash equivalents and investments of at least $10.0 million at all times, we have concluded that there is substantial doubt regarding our ability to continue as a going concern within one year after the date thesethe accompanying financial statements are issued. The Company has incurred substantial operating losses since inception and expects to continue to incur significant losses for the foreseeable future and may never become profitable. As of December 31, 2024, the Company had an accumulated deficit of $307.0 million. The Company’sOur financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result should the Companywe be unable to continue as a going concern.

TheWe Company plansplan to secure additional capital in the future through equity or debt financings, partnerships, or other sources to carry out the Company’sour planned commercial and development activities. If thewe Company isare unable to raise capital when needed or on attractive terms, the Companywe would be forced to delay, reduce or eliminate continued and future commercialization efforts and/or research and development programs.

•continue to establish our commercialization infrastructure and scale up external manufacturing and distribution capabilities to commercialize YCANTH (VP-102) for the treatment of molluscum contagiosum and product candidates for which we may obtain regulatory approval;

•continue our ongoing clinical programs evaluating YCANTH (VP-102) for the treatment of common warts and VP-315 for the treatment of BCC and potentially additional dermatological oncology indications;

•pursue regulatory approvals in the United States and, potentially, other parts of the world for YCANTH (VP-102) for the treatment of common warts and VP-315 for the treatment of BCC;

•adapt our regulatory compliance efforts to incorporate requirements applicable to marketed products;

•maintain, expand and protect our intellectual property portfolio;

•hire and retain clinical, manufacturing, commercialization and scientific personnel; and incur additional legal, accounting and other expenses while operating as a public company.

We recognize revenue from sales of YCANTH (VP-102), or the Product, in accordance with ASC Topic 606 – Revenue from Contracts with Customers. YCANTH (VP-102) became available for commercial sale and shipment for the treatment of patients by a healthcare provider in the United States in the year ended December 31, 2023. We sell the Product to several pharmaceutical wholesaler/distributors, or the Customers, who in turn sell the Product directly to pharmacies, clinics, hospitals, and federal healthcare programs. Revenue is recognized as the Product is physically delivered to the Customers.

License and Collaboration Revenue

CollaborationLicense and collaboration revenue represents revenue from the Torii Agreement pursuant to which we granted Torii an exclusive license to develop and commercialize our product candidates that contain a topical formulation of cantharidin for the treatment of molluscum contagiosum and common warts in Japan, including YCANTH (VP-102). On June 27, 2025, we entered into the Second Amendment to the Torii Agreement, as previously amended. The Second Amendment provided for the acceleration of an $8.0 million milestone payment which was paid to us in July 2025, following Torii's approval of the study plan and execution of the Clinical Research Organization agreement, or CRO agreement. In September 2025, Torii paid us a $10.0 million milestone payment upon the approval of TO-208, referred to as YCANTH in the U.S., for molluscum in Japan.

Cost of product revenue includes the cost of inventory sold, which includes direct manufacturing and supply chain costs. Prior to FDA approval, all product purchased from such suppliers was included as a component of research and development expense, as we were unable to assert that the inventory had future economic benefit until YCANTH (VP-102) received FDA approval. Pursuant to the supply agreement, we purchased and included in research and development expenses approximately $4.5 million of raw cantharidin and processed active pharmaceutical ingredient, or API.API, prior to FDA approval. The raw cantharidin and processed API is sufficient to produce approximately 1417 million finished drug product applicators to be used for commercially saleable product and other YCANTH (VP-102) product candidates. In addition, we purchased other components and services related to YCANTH (VP-102) for commercially saleable product and included approximately $1.2 million in research and development expenses prior to FDA approval. As a result, cost of product revenue related to YCANTH (VP-102) will initially reflectreflected a lower average per unit cost of materials over approximately the next year as previously expensed inventory iswas utilized for commercial production and sold to customers. IfOn a pro forma basis, were we to have included those costs previously expensed as a component of cost of product revenue, our cost of product revenue for the year ended December 31, 2024 and 2023 would have been $2.6 millionmillion. and $0.5 million, respectively, including $1.3 million of obsolete inventory costs forFor the year ended December 31, 2024.2025, including those costs previously expensed as a component of cost of product revenue would have had an immaterial impact on our cost of product revenue.

Cost of License and Collaboration Revenue

The costscost of license and collaboration revenue consists of payments for manufacturingcommercial and clinical supply to support the commercial launch of YCANTH (VP-102) in Japan as well as continued development and testing services pursuant to the Torii Clinical Supply Agreement.

Research and development expenses consist of expenses incurred in connection with the discovery and development of YCANTH (VP-102) for the treatment of molluscumcommon contagiosum,warts, potentialcontinued follow-on indicationsdevelopment for YCANTHthe (VP-102),treatment includingof common warts,molluscum and our other product candidates in addition tocandidate, VP-315 for BCC. We expense research and development costs as incurred. These expenses include:

•expenses incurred under agreements with contract research organizations, or CROs, as well as investigative sites and consultants that conduct our clinical trials and preclinical studies;

•manufacturing and supply scale-up expenses and the cost of acquiring and manufacturing preclinical and clinical trial supply and commercial supply, including manufacturing validation batches;

•outsourced professional scientific development services;

•employee-related expenses, which include salaries, benefits and stock-based compensation;

•expenses relating to regulatory activities; and laboratory materials and supplies used to support our research activities.

•the number of clinical sites included in the trials;

•the length of time required to enroll suitable patients;

•the number of patients that ultimately participate in the trials;

•the number of doses patients receive;

•the duration of patient follow-up; and the results of our clinical trials.

License and Collaboration Revenue

CollaborationLicense and collaboration revenue was $20.3 million for the year ended December 31, 2025, compared to $1.0 million for the year ended December 31, 2024,2024. comparedLicense toand $0.5collaboration millionrevenue for the year ended December 31, 2023.2025 Revenueprimarily consisted of $18.0 million in milestone payments from Torii and $2.3 million in commercial supply activity. License and collaboration revenue for the year ended December 31, 2024 andconsisted 2023 was related toof supplies and development activity providedwith to Torii as needed pursuant to the Clinical Supply Agreement.Torii.

Cost of product revenue werewas $2.2 million for the year ended December 31, 2025, compared to $1.9 million for the year ended December 31, 2024, compared to $0.3 million for the year ended December 31, 2023.2024. The increase consisted of higher product costs primarily related to the saleincrease in sales of YCANTH (VP-102) of $0.7 millionmillion, coupledoffset withby a lower obsolete inventory reserve of $0.9$0.3 million during the year ended December 31, 20242025.

Cost of License and Collaboration Revenue

Selling, general and administrative expenses were $35.2 million for the year ended December 31, 2025, compared to $58.8 million for the year ended December 31, 2024,2024. compared to $47.3 million forExcluding the year ended December 31, 2023. The increaseimpact of $11.5stock-based compensation, the decrease of $20.6 million was primarily a result of higherlower expenses related to commercial activities for YCANTH (VP-102) for the treatment of molluscum, including increaseddecreased compensation, recruiting fees, benefits and travel dueof $6.9 million related to ramp-upa smaller sales force, decreased compensation of sales force of $8.5 million, as well as increased commercial-related costs of $5.1 million, increased severance costs of $1.8$2.7 million due to termination of non-sales employees, increaseddecreased professional services of $2.8 million, legalcommercial-related costs of $1.6$6.6 million, Dormer legal settlement payment of $0.8 million partially offset by decreased stock compensation expense of $6.8 million related to vesting of restricted stock unitstravel and decrease in marketing and sponsorshipfleet-related costs of $2.2$2.0 million and decreased legal and administrative costs of $2.3 million.

On October 1, 2024 ,2024, we terminated 47 employees to reduce costs and optimize the efficiency of our field sales force, or the Restructuring. WeAt that time, we reduced the number of sales territories from 80 to approximately 35, with a focus on those territories that have historically shown a high prevalence of molluscum. In connection with the Restructuring, we incurred a one-time charge totaling approximately $0.7 million related to one-time employee termination costs. In addition, we recognized an impairment charge for right-of-use assets associated with leased vehicles of $0.3 million for the year ended December 31, 2024 in selling, general and administrative expenses. This restructuring charge was substantially paid out by December 31, 2024.

The following table summarizes our research and development expense by product candidate or, for unallocated expenses, by typetype, in thousands, for the years ended December 31, 20242025 and 2023. We did not incur any research and development expense for VP-103 during the years ended December 31, 2024 or 2023.2024. Unallocated expenses include compensation and other personnel relatedpersonnel-related costs. Stock compensation expense for the year ended December 31, 2023 included $0.8 million related to vesting of restricted stock.

For the yearyears ended December 31, 20242025 and 2023,2024, we recognized a $0.1$0.2 million and $2.5$0.1 million loss on disposal of assets.assets, The impairment loss incurred during the period ended December 31, 2023 was related to disposal of the assembly and packaging line due to the high cost to upgrade the line as a result of changes in product assembly.respectively.

Interest income was $1.4$0.9 million and $2.7$1.4 million for the years ended December 31, 20242025 and 2023,2024, respectively. The decrease of $1.3$0.5 million was primarily due to a lower cash balance and lower interest rates.balance.

Interest expense of $9.4$7.7 million and $4.0$9.4 million for the years ended December 31, 20242025 and 2023,2024, respectively, consisted of interest expense pursuant to the OrbiMed Credit Agreement entered into on July 26, 2023. The decrease of $1.7 million was primarily due to a lower principal balance. We paid $35.0 million to settle all outstanding obligations under the Credit Agreement in November 2025.

The Company's OrbiMedOur Credit Agreement containscontained a bifurcated settlement feature classified as a derivative liability which iswas remeasured each accounting period. ForThe derivative liability was remeasured to fair value immediately prior to the yearsettlement endedof andthe asCredit Agreement in November 2025, resulting in a reduction to nil. As of December 31, 2023,2024, the settlement feature was deemed to have no value. The fair value of the embedded derivative iswas valued at $2.6 million as of December 31, 2024,million, as a result of the acceleration of principal payments, repayment fee,fee and exit fee.

For a discussion and analysis of changes in financial condition and results of operations for the year ended December 31, 20232024 as compared to the year ended December 31, 2022,2023, refer to our Annual Report on Form 10-K for the fiscal year ended December 31, 2023,2024, filed with the SEC on FebruaryMarch 29,11, 2024.2025.

Since our inception, we have incurred net losses and negative cash flows from our operations. We have financed our operations since inception primarily through sales of our convertible preferred stock, the sale of our common stock, borrowings under loan agreements and $20.0$38.0 million from the Torii Agreement. In November 2024, we closed an underwritten offering of 45,518,2434,551,824 shares of our common stock (and, in lieu of common stock to certain investors that so chose, Pre-Fundedpre-funded Warrantswarrants to purchase 2,235,955223,595 shares of our common stock, or the Pre-Funded Warrants), and in either case, accompanying Series A Warrantswarrants to purchase 23,877,0992,387,703 shares of our common stock at an exercise price of $1.0680$10.68 per share of common stockstock, or the Series A Warrants, and Series B Warrantswarrants to purchase 23,877,0992,387,703 shares of our common stock at an exercise price of $1.3350$13.35 per share of common stock, or the Series B Warrants, at a combined public offering price of $0.89$8.90 per share of common stock and accompanying Series A and Series B Warrants (or $0.8899$8.899 per Pre-Funded Warrant and accompanying Series A and Series B Warrants). The offering resulted in net proceeds of $39.6 million, after deducting underwriting discounts and commissions, and offering expenses.

In addition, we have an operating lease for office space in West Chester, PAPennsylvania with obligations through September 1, 2027 of $0.9$0.6 million including imputed interest.

Our business is subject to risks and events that, if they occur, could adversely affect our financial condition and results of operations and the trading price of our securities. In addition to the other information set forth in this quarterly report on Form 10-Q, you should carefully consider the factors described in Part I, Item 1A. "Risk Factors" of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the Securities and Exchange Commission on March 11, 2026. During the firstsecond quarter of fiscal 2026, there were no material changes to our previously disclosed risk factors.factors except as set forth below.

We are a therapeutics company developing and commercializing medications for the treatment of dermatologic diseases, including skin cancers. Our commercial product and portfolio of product candidates are clinician administered therapies in areas of high unmet need. Our current product portfolio consists of one approved product with several potential follow-on indications, as well as an additional pipeline product. Our commercial product, YCANTH (VP-102), was approved by the U.S. Food and Drug Administration, or FDA, in July 2023 for the treatment of molluscum in adult and pediatric patients two years of age and older. YCANTH (VP-102) is a proprietary drug-device combination that contains a GMP-controlled formulation of cantharidin. We are currently developing YCANTH (VP-102) for a potential follow-on indication for the treatment of common warts. Our second development candidate, VP-315, is an oncolytic peptide-based injectable therapy for the potential treatment of dermatology oncologic conditions, includinginitially targeting basal cell carcinoma or BCC.

We commercially launched YCANTH (VP-102) in August 2023 in the United States for the treatment of molluscum. We have built a specialized sales organization consistingwhich as of 44July 31, 2026, consisted of 45 employee sales representatives in the United States focused on pediatric dermatologists, dermatologists, pediatricians and select other primary care healthcare providers.

We are also advancing YCANTH (VP-102) for common warts through a separate regulatory approval process and have initiated a global Phase 3 program, or the Program, of YCANTH for the treatment of common warts with our partner, Torii. The first patient in the first Phase 3 clinical study (COVE-2) in the Program was dosed in the United States in December 2025, and the first patients were dosed in the second Phase 3 study (COVE-3) in the Program in Decemberthe 2025.United States and Japan in June 2026. The Program is ongoing and new subjects continue to be enrolled.enrolled in COVE-2, COVE-3 and through the long-term follow up study (COVE-4). Top-line data from our Program is expected in mid-2027.

On October 20, 2025, we announced that the Committee for Medicinal Products for Human Use of the European Medicines Agency provided positive feedback which supports the filing of a Marketing Authorization Application for YCANTH (VP-102) as a treatment for molluscum contagiosum in the EU with no requirement to complete additional clinical studies. We currently retain all global rights to YCANTH outside of Japan and we are exploring non-dilutive partnerships to fund development and commercialization for YCANTH (VP-102) for the treatment of molluscum contagiosum, as well as for common warts if approved, in additional geographic regions outside of the United States and Japan.

We are also developing VP-315 for the treatment of BCC and potentially additional dermatological oncology indications. In November 2025, we presented additional data at the Society for Immunotherapy of Cancer 40th Annual Meeting, which showed that VP-315 induced a robust local immune response with both cell-mediated and humoral components, effectively shifting the tumor microenvironment from an immunosuppressive to an anti-tumor state, and additional data regarding the histologic assessment in non-injected lesions that suggests a potential abscopal-like effect. Since that presentation, there has been a growing interest in this program across a broad audience. We believe this reflects the high response rates observed in the study and the potential for VP-315 to change the paradigm for the treatment of basal cell carcinoma,BCC, particularly for patients wishing to avoid or reduce their surgical burden and recovery. Our enthusiasm is further supported by the suggested potential for less scarring and improved compliance versus other therapeutic options such as surgery and topicals, as either a primary or neoadjuvant treatment for superficial and nodular tumors. We have also continued to evaluate the abscopal response in 14 observed but not treated lesions in the Phase 2 study and have reported that 3 out of the 14 lesions had complete histologic clearance and that there was a 67% overall reduction in tumor size across all 14 lesions. If this overall product profile could be demonstrated in pivotal Phase 3 testing, we believe VP-315 has the potential to emerge as a non-surgical, immunotherapy treatment option for basal cell carcinomaBCC and other skin cancers.

On July 26, 2023, we entered into the OrbiMed Credit Agreement, pursuant to which we borrowed $50.0 million under the OrbiMed Loan Facility (as defined in Note 92), resulting in net proceeds of approximately $44.1 million after payment of certain fees and transaction related expenses. Amounts borrowed under the OrbiMed Loan Facility were scheduled to mature on July 26, 2028. On November 25, 2025, following the Private Placement described below, we fully extinguished the OrbiMed Loan Facility by paying a cash settlement amount of $35.0 million.

As of MarchJune 31,30, 2026, we had cash of $20.6$11.2 million. Based on our current business plan and current capital resources, including $12.5 million available under the PD Credit Agreement, combined with the uncertainty regarding the availability of additional funding, we have concluded that there is substantial doubt regarding our ability to continue as a going concern within one year after the date these consolidated financial statements are issued. Our consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result should we be unable to continue as a going concern.

We have incurred substantial operating losses since inception and expect to continue to incur significant losses for the foreseeable future and may never become profitable. As of MarchJune 31,30, 2026, we had an accumulated deficit of $334.6$347.7 million. We expect to continue to incur significant expenses and operating losses for the foreseeable future. Our expenses may increase in connection with our ongoing activities, as we:

Results of Operations for the Three Months Ended MarchJune 31,30, 2026 and 2025

Product revenue, net was $4.3$5.1 million for the three months ended MarchJune 31,30, 2026, compared to $3.4$4.5 million for the three months ended MarchJune 31,30, 2025. The increase in product revenue, net was primarily related to an increase in deliveries of YCANTH to our distribution partners commensurate with an increase in dispensed applicator unit volume.

License and collaboration revenue was $0.7$0.8 million for the three months ended MarchJune 31,30, 2026, compared to $17,000$8.2 million for the three months ended MarchJune 31,30, 2025. License and collaboration revenue for the three months ended MarchJune 31,30, 2026 consisted primarily of commercial supply. License and collaboration revenue for the three months ended MarchJune 31,30, 2025 consisted of an $8.0 million milestone payment from Torii as well as supplies and development activity with Torii.activity.

Cost of product revenue for the three months ended MarchJune 31,30, 2026 and 2025 was $0.5$0.4 million and $0.4$0.3 million, respectively, consisting primarily of product costs related to the sale of YCANTH (VP-102).

Cost of license and collaboration revenue was $0.3$0.4 million and $14,000$0.2 million for the three months ended MarchJune 31,30, 2026 and 2025. Cost of license and collaboration revenue consisted of commercial product and supplies and development activity with Torii.

Selling, general and administrative expenses were $10.0$10.3 million for the three months ended MarchJune 31,30, 2026, compared to $8.8$8.9 million for the three months ended MarchJune 31,30, 2025. Excluding the impact of stock-based compensation, the increase of $1.3 million was primarily adue result ofto increased commercial spend,spend related to the expansion of the sales force.

The following table summarizes our selling, general and administrative expense for the three months ended MarchJune 31,30, 2026 and 2025 (in thousands).

Research and development expenses were $3.9$6.0 million for the three months ended MarchJune 31,30, 2026, compared to $2.3$1.8 million for the three months ended MarchJune 31,30, 2025. Excluding the impact of stock-based compensation, the increase of $1.5$4.1 million was primarily due to the increased costs related to the Program.

The following table summarizes our research and development expense by product candidate or, for unallocated expenses, by type, for the three months ended MarchJune 31,30, 2026 and 2025. Unallocated expenses include compensation and other personnel-related costs (in thousands):

Interest income was $0.2$0.1 million and $0.3$0.2 million for the three months ended MarchJune 31,30, 20262026, and MarchJune 31,30, 2025, respectively. The decrease of $0.1 million was primarily due to lower cash balances.

Interest expense was $0.2 million for the three months ended MarchJune 31,30, 20262026, compared to $2.2$2.1 million for the three months ended MarchJune 31,30, 2025. The decrease of $2.0 million was primarily related to the settlement of the OrbiMed Loan Facility and termination of the OrbiMed Credit Agreement with OrbiMed in November 2025, as discussed in Note 9 to our consolidated financial statements.

As of MarchJune 31,30, 2026, we had cash of $20.6$11.2 million. Since our inception, we have incurred negative cash flows from our operations. We have financed our operations since inception primarily through sales of our convertible preferred stock, the salesales of our common stock, and $38.0 million from the Torii Agreement, which includes $8.0 million received in July 2025 and $10.0 million received in September 2025. Subsequent to June 30, 2026, we entered into the PD Credit Agreement that provides for committed borrowings and additional borrowing capacity, subject to certain conditions and covenant requirements.

On July 26, 2023, we entered into the OrbiMed Credit Agreement under which we borrowed $50.0 million, resulting in net proceeds to us of approximately $44.1 million after payment of certain fees and transaction related expenses. Amounts borrowed under the Loan Facility were set to mature on July 26, 2028. Based on our net revenue attributable to YCANTH on a trailing 12-month basis not meeting a specified amount set forth in the OrbiMed Credit Agreement as of December 31, 2024, we became obligated to start making principal payments starting in January 2025. We were obligated to repay the principal amount of the loan on the last day of each month in equal monthly installments through the maturity date, together with the applicable repayment premium and the exit fee. On November 25, 2025, we paid $35.0 million to fully settle the debt related to the OrbiMed Credit Agreement.

During the threesix months ended MarchJune 31,30, 2026, operating activities used $9.2$18.4 million of cash, primarily resulting from a net loss of $9.7$22.8 million partially offset by the non-cash change in obligation for the R&D funding arrangement of $1.3$4.2 million, non-cash stock-based compensation of $0.9$2.1 million, and the amortization of right-of-use assets related to operating and financing leases of $0.2$0.4 million. Net cash used by changes in operating assets and liabilities consisted primarily of an increase in accounts receivable of $2.5$5.7 million, an increase in insurance recovery asset of $2.3 million, an increase in inventory of $0.5 million and a decrease in accounts payable of $0.5 million, partially offset by the change in legal settlement accrual of $4.0 million, increase in accrued expenses and other current liabilities of $0.6 million partially offset by a decrease in prepaid expenses and other assets of $0.4$1.7 million and an increase in deferred revenue of $0.2$0.6 million.

During the threesix months ended MarchJune 31,30, 2025, operating activities used $12.7$22.7 million of cash, primarily resulting from a net loss of $9.7$9.5 million partially offset by non-cash stock-based compensation of $1.0$1.9 million and non-cash interest expense of $0.7$1.4 million. Net cash used by changes in operating assets and liabilities consisted primarily of an increase in accounts receivable of $5.6$9.1 million and billed and unbilled license and collaboration revenue of $8.1 million partially offset by an increase in accruedaccounts expensespayable and deferred revenue of $1.0$0.9 million and a decrease in prepaid expenses and other assets of $0.6$0.8 million.

We did not use any cash in investing activities during the threesix months ended MarchJune 31,30, 2026 or 2025.

During the threesix months ended MarchJune 31,30, 2026, net cash used by financing activities of $0.1$0.2 million was primarily due to the repayment of financing leases.

During the threesix months ended MarchJune 31,30, 2025, net cash used by financing activities of $4.1$8.2 million was primarily due to the repayment of debt related to the OrbiMed Credit Agreement.

We have incurred substantial operating losses since inception and expect to continue to incur significant losses for the foreseeable future and may never become profitable. As of MarchJune 31,30, 2026, we had an accumulated deficit of $334.6$347.7 million. We believe our cash of $20.6$11.2 million as of MarchJune 31,30, 20262026, together with the initial committed borrowing of $12.5 million available under the PD Credit Agreement entered into subsequent to June 30, 2026, will not be sufficient to support our planned operations intofor at least one year from the firstdate quarterthese consolidated financial statements are issued. The PD Credit Agreement also provides for up to an additional $15.0 million borrowing capacity that is subject to compliance with certain financial and other covenants and the satisfaction of 2027.applicable borrowing conditions. If these conditions are satisfied and the additional borrowings become available, we believe our liquidity would be sufficient to extend our cash runway into 2028. Based on our current business plan and current capital resources, combined with the uncertainty regarding the availability of additional funding, we have concluded that there is substantial doubt regarding our ability to continue as a going concern within one year after the date these consolidated financial statements are issued. We plan to address the conditions that raise substantial doubt regarding our ability to continue as a going concern by, among other things, utilizing borrowings available under the PD Credit Agreement, subject to the terms and conditions thereof, and obtaining additional funding through equity offerings, debt financing, collaborations, strategic alliances and/or licensing arrangements. Our consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result should we be unable to continue as a going concern. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our capital resources sooner than we expect. Our future capital requirements, and timing, will depend on many factors, including:

As of MarchJune 31,30, 2026, there have been no material changes to our contractual obligations and commitments as previously discussed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.