Verrica Pharmaceuticals Announces Achievement of Milestones Unlocking Access to the Full $27.5 Million of Non-Dilutive Growth Capital Under Credit Facility

The facility provides non-dilutive funding, while borrowings carry interest and are secured by substantially all company and certain subsidiary assets.

Rhea-AI Summary

Verrica Pharmaceuticals (VRCA) achieved milestones unlocking access to the full $27.5 million available under its non-dilutive credit facility. Meeting revenue, growth and operational milestones increased the commitment by $15.0 million; the first $12.5 million was funded in September. The lender is controlled by Verrica board chairman Paul B. Manning.

Verrica expects the funding to support YCANTH growth and completion of two pivotal common-warts studies, with readouts in Q1 2027 and mid-2027. Borrowings bear interest at one-month SOFR plus 8.00%, with a 4.50% SOFR floor, and mature December 31, 2030. Interest is payable in kind absent default, with no scheduled principal or interest cash payments during the term. Substantially all assets of Verrica and certain subsidiaries secure the facility; specified transactions and operating-cash-flow thresholds trigger payments.

5 points · 0 major

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0 major · 6 points

Hollow bars mark forward-looking points. How the balance works

Positive

• Moderate pointMilestone achievement unlocked an additional $15.0 million, making the full $27.5 million facility available. 24% of market cap
• Minor pointInitial funding of $12.5 million was received in September.
• Minor point. Forward-looking: it has not happened yet and may not happen.Verrica expects funding to support YCANTH growth and completion of two pivotal common-warts studies.
• Minor point. Forward-looking: it has not happened yet and may not happen.Common-warts study readouts are expected in Q1 2027 and mid-2027, respectively.
• Minor pointNo scheduled principal or interest cash payments are required during the term, absent default.

Negative

• Moderate pointSubstantially all assets of Verrica and certain subsidiaries secure the facility.
• Minor pointBorrowings bear one-month SOFR plus 8.00% annually, subject to a 4.50% SOFR floor.
• Minor pointBorrowings mature December 31, 2030, with interest payable in kind absent default.
• Minor pointMandatory prepayments apply to proceeds from certain transactions and events.
• Minor pointQuarterly payments are required if positive operating cash flow exceeds a specified amount.
• Minor pointDefault triggers increased interest payable in cash unless the lender elects otherwise.

News Explained

The newly unlocked $15.0 million increases maximum borrowing capacity rather than providing an automatic cash payment: Verrica may borrow up to $27.5 million at its option, and the release identifies $12.5 million as funded in September.

Argus 15 min delay 17 alerts

+7.58% vs previous close $3.90 last price 2.5x rel. volume Open Argus

Details

Market move: VRCA +7.58% vs previous close. credit facility expansion

+10.2% Peak in 2 hr 19 min

$3.43 – $4.17 Day Range

$67.08M Mkt Cap at Last Price

On Oct 22, the day this news came out, the latest delayed price for VRCA is 7.58% above the previous close. Argus tracked a peak move of +10.2% during the session. Our momentum scanner has recorded 17 alerts for this stock so far that day. The latest delayed price is $3.90. Relative volume is elevated at 2.5x the average.

Data tracked by StockTitan Argus (15 min delayed). Upgrade to Gold for real-time data.

Key Figures

Facility capital available: $27.5 million Commitment increase: $15.0 million Previously funded: $12.5 million +4 more

Facility capital available

$27.5 million

Full amount now available under the credit facility

Commitment increase

$15.0 million

Unlocked after achievement of pre-defined milestones

Previously funded

$12.5 million

Funded in September

Interest rate

One-month SOFR + 8.00% per annum; 4.50% SOFR floor

Credit facility borrowing terms

Loan maturity

December 31, 2030

Term loans under the credit agreement

First common warts readout

Q1 2027

Expected topline data from one pivotal study

Second common warts readout

Mid-2027

Expected readout from the other pivotal study

Historical Context

1 past event · Latest: Aug 06

1 event

1. Aug 06

   Credit facility terms

   24h Move

   -5.2%

   Original agreement provided up to $27.5 million, with $12.5 million available at closing.

24h Move is the share-price change in the day after each event; other market factors may also have contributed.

Key Terms

secured overnight financing rate (sofr), payable in kind, mandatory prepayments, phase 3

4 terms

secured overnight financing rate (sofr) financial

"one-month secured overnight financing rate (SOFR) plus 8.00% per annum"

A secured overnight financing rate (SOFR) is the interest rate on very short, one‑day loans that are backed by high‑quality collateral (like government bonds), so lenders face less risk. Investors care because SOFR is a widely used benchmark that sets the cost of borrowing and the pricing of loans, bonds and derivatives; think of it as a trusted yardstick for short‑term interest costs that influences returns and valuations across markets.

payable in kind financial

"All interest under the facility will be payable in kind"

Payable in kind (PIK) is a payment option where a borrower or issuer fulfills interest or dividend obligations by issuing additional debt or shares instead of paying cash. For investors this matters because it preserves the issuer’s cash flow in the short term but increases the amount owed or dilutes ownership, so it can raise credit risk, change yield expectations and reduce liquidity compared with cash payments.

mandatory prepayments financial

"requires mandatory prepayments with the proceeds of certain transactions"

A covenant in a loan or bond agreement that requires the borrower to use specified cash receipts or events to pay down outstanding principal before scheduled maturity. Typical triggers include proceeds from asset sales, insurance recoveries, excess cash flow, or certain refinancing proceeds; the agreement spells which receipts are "mandatorily" applied, how payments are allocated across lenders, and whether any minimum thresholds or exceptions apply. Mandatory prepayments differ from voluntary prepayments because they are contractually required and immediately reduce the outstanding balance (often at par or according to a prescribed formula), thereby changing the loan’s amortization and remaining interest obligations.

phase 3 medical

"advancement of the Company’s global Phase 3 common warts program"

Phase 3 is the late-stage clinical testing step for a new drug or medical treatment, where the product is given to large groups of patients to confirm effectiveness, monitor side effects, and compare it to standard care. Successful Phase 3 results are often the final scientific hurdle before regulators decide on approval and market launch—like passing a final exam before graduation—and can sharply change a company's valuation and future revenue prospects.

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– Company’s achievement of pre-defined revenue, growth and operational milestones increases facility commitment by $15.0 million –

– Capital now available to support continued growth of the YCANTH® business and advancement of the Company’s global Phase 3 common warts program through topline data readouts, the first of which is expected in Q1’27 –

WEST CHESTER, Pa., Oct. 22, 2026 (GLOBE NEWSWIRE) -- Verrica Pharmaceuticals Inc. ("Verrica" or the "Company") (Nasdaq: VRCA), a therapeutics company developing and commercializing medications for the treatment of dermatological diseases, including skin cancers, today announced that it has achieved the pre-defined revenue, growth and operational milestones required to increase the maximum commitment amount under its credit facility with an entity controlled by Paul B. Manning, Chairman and Chief Executive Officer of PBM Capital and Chairman of Verrica's Board of Directors. As a result of the achievement of these milestones, the full $27.5 million of non-dilutive capital under the facility is now available to Verrica, with the first $12.5 million having been funded in September.

"Verrica’s achievement of these milestones resulted directly from the momentum our team has built with YCANTH," said Jayson Rieger, PhD, MBA, President and Chief Executive Officer of Verrica. "We committed to clear revenue, growth and operational goals when we closed this facility in August, and we delivered on them. Importantly, the capital now available to Verrica by this facility allows us to complete our two pivotal studies in the common warts program, with readouts from the studies expected in the first quarter and in mid-2027, respectively. Under the facility, we have no obligation to make scheduled principal or interest cash payments during the term of the facility, and the favorable covenant package allows us to fully utilize our cash to support our growth. On behalf of all of us at Verrica, I would like to again thank Paul Manning for his confidence in our progress and for providing this highly flexible funding to support our programs."

"Verrica's execution over the past several months reinforces my confidence in the team and in YCANTH," said Paul B. Manning, Chairman of Verrica's Board of Directors. "I am pleased to continue supporting the Company as it builds on this progress."

Terms of the Credit Agreement

Under the terms of credit agreement, Verrica may borrow up to $27.5 million from time to time, at its option. Borrowings under the facility will bear interest at the one-month secured overnight financing rate (SOFR) plus 8.00% per annum, subject to a SOFR floor of 4.50%. All interest under the facility will be payable in kind, subject to the absence of any event of default under the credit agreement (which results in interest being payable in cash and increased during the pendency of such event of default, unless otherwise elected by the lender). The term loans will mature on December 31, 2030. The credit agreement also requires mandatory prepayments with the proceeds of certain transactions and events, and quarterly payments if positive operating cash flow exceeds a specified amount. The credit facility is secured by substantially all of the assets of Verrica and certain subsidiaries.

About YCANTH® (VP-102) 

YCANTH® is a proprietary drug-device combination product that contains a GMP-controlled formulation of cantharidin delivered via a single-use applicator that allows for precise topical dosing and targeted administration for the treatment of molluscum. YCANTH is the first and only healthcare professional-administered product approved by the FDA to treat adult and pediatric patients two years of age and older with molluscum contagiosum — a common, highly contagious skin disease that affects an estimated six million people in the United States, primarily children. Approval of YCANTH was based upon the positive results from two Phase 3 clinical trials in approximately 500 patients which demonstrated that YCANTH was a safe and effective therapeutic for the treatment of molluscum.

Approximately 250 million lives are eligible to receive YCANTH covered by insurance. Commercially insured patients pay as little as $0 per YCANTH treatment visit, for up to two applicators. Other uninsured patients may be eligible to receive YCANTH at a reduced cost if certain eligibility requirements are met for patient assistance. Please visit YCANTHPro.com for additional information.

YCANTH is also approved for the treatment of molluscum contagiosum in Japan and is being studied in a global phase 3 program in the US and Japan for the treatment of common warts.

About Verrica Pharmaceuticals Inc. 

Verrica is a therapeutics company developing and commercializing medications for the treatment of dermatological diseases, including skin cancers. Verrica’s product YCANTH^® (VP-102) (cantharidin), is the first and only healthcare professional-administered treatment approved by the FDA to treat adult and pediatric patients two years of age and older with molluscum contagiosum, a highly contagious viral skin infection affecting approximately 6 million people in the United States, primarily children. YCANTH^® (VP-102) is also in development to treat common warts, the largest remaining unmet need in medical dermatology. Verrica has also entered a worldwide license agreement with Lytix Biopharma ASA to develop and commercialize VP-315 (ruxotemitide, formerly known as LTX-315 and VP-LTX-315) for non-melanoma skin cancers including basal cell carcinoma and squamous cell carcinoma. For more information, visit www.verrica.com.

Forward-Looking Statements

Any statements contained in this press release that do not describe historical facts may constitute forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements may be identified by words such as “believe,” “expect,” “may,” “plan,” “potential,” “will,” and similar expressions, and are based on Verrica’s current beliefs and expectations. These forward-looking statements include statements about Verrica’s ability to borrow funds under the credit facility, the clinical development and potential benefits of Verrica’s product candidates, including YCANTH (VP-102) and VP-315, the timing of readouts from the Phase 3 common warts program and Verrica’s cash runway. These statements involve risks and uncertainties that could cause actual results to differ materially from those reflected in such statements. Risks and uncertainties that may cause actual results to differ materially include risks and uncertainties related to market conditions, and other risks and uncertainties that are described in Verrica’s Annual Report on Form 10-K for the year ended December 31, 2025, Verrica’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2026 and other filings Verrica makes with the SEC. Any forward-looking statements speak only as of the date of this press release and are based on information available to Verrica as of the date of this release, and Verrica assumes no obligation to, and does not intend to, update any forward-looking statements, whether as a result of new information, future events or otherwise.

FOR MORE INFORMATION, PLEASE CONTACT:

Investors:

John J Kirby
Interim Chief Financial Officer
jkirby@verrica.com

Kevin Gardner 
LifeSci Advisors 
kgardner@lifesciadvisors.com

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

How much funding did Verrica unlock under its credit facility?

Verrica unlocked an additional $15.0 million, bringing the available facility commitment to $27.5 million. The increase followed achievement of predefined revenue, growth and operational milestones. The first $12.5 million was funded in September.

What interest rate and maturity apply to Verrica's credit facility?

Borrowings carry interest at one-month SOFR plus 8.00% per annum, with a 4.50% floor on SOFR, and mature on December 31, 2030. SOFR is the secured overnight financing rate. Interest is payable in kind rather than cash when no default exists.

What happens to interest if Verrica defaults under the credit agreement?

During an event of default, interest increases and becomes payable in cash, unless the lender elects otherwise. This differs from the facility's normal payment-in-kind interest arrangement.