WEST CHESTER, PA — Verrica Pharmaceuticals (Nasdaq: VRCA) raised approximately $50 million through a private investment in public equity, a move the company said will retire its debt facility, strengthen its balance sheet, and extend its cash runway into mid-2027.
The financing, backed by Caligan Partners LP, PBM Capital, and other new and existing investors, closed last week. As part of the agreement, Caligan Partners will gain the right to appoint a new member to Verrica’s board.
Verrica plans to use $35 million of the proceeds to fully pay off its outstanding obligations under its credit agreement with OrbiMed. The company said eliminating the facility removes interest and principal burdens that had constrained its operating flexibility. Remaining funds will support working capital and general corporate needs.
CEO Jayson Rieger said the financing allows Verrica to focus resources on growing YCANTH, its treatment for molluscum contagiosum, and advancing its clinical pipeline. Rieger said the added runway supports preparation for a Phase 3 program for VP-315 in basal cell carcinoma and further development of the company’s wart treatment program, which it believes could represent a billion-dollar market opportunity.
The PIPE deal includes a mix of common stock, pre-funded warrants, and Series C warrants. Verrica is selling more than 6.4 million shares of common stock, over 5.3 million pre-funded warrants, and 2.95 million Series C warrants at a combined price of about $4.24 per unit. The warrants include varying exercise prices and limitations designed to prevent holders from exceeding certain ownership thresholds.
The company expects the new capital, combined with existing cash and receivables, to fund operations into mid-2027. The repaid OrbiMed facility will be terminated in full.
TD Cowen acted as the sole placement agent.
The securities were issued in a private transaction and are not registered under the Securities Act. Verrica said it plans to file a registration statement with the SEC to allow resale of the securities issued in the PIPE.
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