The U.S. Food and Drug Administration has approved Verrica Pharmaceuticals Inc's treatment of a viral skin infection in adults and children aged 2 years and above, the company said on Friday.

The green light for Verrica's drug, Ycanth, makes it the first approved treatment for viral skin disease molluscum contagiosum in the United States.

The FDA decision is a boost in the arm for the company after it previously failed to secure marketing approval for the drug, which is delivered through a single-use applicator, allowing for precise topical dosing and targeted administration.

The company did not provide details on pricing for Ycanth, but said the drug would be available commercially by September 2023.

Needham analyst Serge Belanger, ahead of the approval, estimated the price would be around $500 an applicator, and estimates peak sales in the range of $200 million.

Molluscum contagiosum is caused by a poxvirus and results in skin lesions, which usually resolve within a year without scarring, but some cases could take a lot more time.

The company estimates that about six million people annually in the United States, primarily children, are affected by the condition which previously had no approved treatments.

Verrica said its treatment was effective in two late-stage studies, with about half of the patients on the treatment achieving complete clearance of all treatable molluscum lesions over twelve weeks, far higher than the placebo group.

The company is also testing the drug for the treatment of common warts and external genital warts in ongoing late-stage trials.