Verrica Pharmaceuticals Announces Closing of $125 Million Debt Financing with OrbiMed

– Verrica received $50M upon the close of the transaction; $75M of additional capital available in tranches based on the achievement of certain revenue milestones –

– Proceeds from the transaction to support the commercialization of YCANTH, which was approved by the FDA on July 21, 2023, for treatment of molluscum contagiosum –

WEST CHESTER, Pa., July 26, 2023 (GLOBE NEWSWIRE) -- Verrica Pharmaceuticals Inc. (“Verrica” or “the Company”) (Nasdaq: VRCA), a dermatology therapeutics company developing medications for skin diseases requiring medical interventions, today announced the closing of the previously announced $125 million debt financing with OrbiMed (“the Agreement”), a leading healthcare investment firm.

Under the terms of the Agreement, Verrica borrowed $50 million at the close of the transaction. In addition, if specified revenue thresholds are achieved, the Company will be able to borrow an aggregate of an additional $75 million available in five tranches, which the Company believes will be sufficient to fund ongoing operations without requiring additional equity financing. The facility is a five-year term loan that matures in July 2028. The term loan will bear interest at a rate based upon the one-month secured overnight financing rate (SOFR), subject to a SOFR floor of 4% per annum, in addition to a margin of 8% per annum. Verrica also issued to OrbiMed a warrant to purchase 518,551 shares of the Company’s common stock, with an exercise price of $6.0264. Including the $50 million the Company received in connection with the closing of the Agreement, plus the Company’s $60 million in cash and cash equivalents on-hand as of March 31, 2023, the Company expects its cash runway will be extended into the first quarter of 2025.

TD Cowen served as exclusive financial advisor to Verrica on this transaction.

About Molluscum Contagiosum (Molluscum)

Molluscum is a highly contagious viral skin disease that affects approximately six million people — primarily children — in the United States. Molluscum is caused by a pox virus that produces distinctive raised, skin-toned-to-pink-colored lesions that can cause pain, inflammation, itching and bacterial infection. It is easily transmitted through direct skin-to-skin contact or through fomites (objects that carry the disease like toys, towels or wet surfaces) and can spread to other parts of the body or to other people, including siblings. The lesions can be found on most areas of the body and may carry substantial social stigma. Without treatment, molluscum can last for an average of 13 months, and in some cases, up to several years.