Last week, I responded to a request a question from the eXtension Ask and Expert system concerning unusual caterpillars on their Myrtle Spurge. The client also indicated that they realized that myrtle spurge is toxic. The question asked, "What is worse - the caterpillars or the spurge? And should I eradicate one or both?" Here is how I responded.
Myrtle spurge or Euphorbia myrsinites, is a very popular plant for xeriscape gardens, but unfortunately it is also highly invasive and is rapidly expanding into sensitive ecosystems throughout the inner-mountain western states. Colorado and Utah have listed it on their "A" lists for noxious weeds. Teton County in Wyoming has done the same.
As you have already realized, Myrtle Spurge is toxic. Actually, it is the milky latex that is toxic. As with many members of the genus Euphorbia, there are diterpenoid euphporbol esters present that can cause severe skin and mucous membrane irritation. In fact, this is very similar to the allergic response to latex.
Over 90% of the natural rubber in latex is from the rubber tree, Hevea brasiliensis (not to be confused with the rubber plant used as house plant, which is Ficus elastica). Hevea brasiliensis is a member of the Euphorbiaceae family and linkages within the genera have beed documented relative to latex sensitivity.
This plant should be removed from your garden. Myrtle spurge reproduces by seed and is capable of projecting it's seed up to 15 feet. Therefore, destroy the plant and don't place it in the compost bin.
Take care with handling the plant material, especially if you are latex sensitive. Where vinyl gloves and discard. You should also immediately launder your clothing.
Oh, and by the way, you can probably just pick off the caterpillars or apply a BT-based insecticide, which is safe to you and your pets. Here are some links that may assist you: