Verrica Shares Surge After Insiders Snap Up $17.9M Stake
Stock jumps over 8% as director and CEO lead a major investment in a $50 million private placement, signaling strong confidence in the biotech's pipeline.
Shares of Verrica Pharmaceuticals (NASDAQ: VRCA) surged in Tuesday trading after company insiders, including a director and its chief executive, made a significant $17.9 million investment in the dermatology-focused biotech. The stock closed at $5.12, a gain of 8.47%, as investors reacted to the substantial vote of confidence from the company's leadership.
The insider purchases were part of a larger $50 million private placement the company announced on November 24. The financing was aimed at retiring debt and extending Verrica's operational cash runway into mid-2027, a crucial move that removes near-term financial uncertainty.
Leading the insider investment was Director Paul B. Manning, who acquired over 4.1 million shares for approximately $17.5 million. Other key executives, including CEO Jayson Rieger and COO David Zawitz, also participated, purchasing a combined total of over $450,000 in stock. The total insider commitment represents more than a third of the private placement and a remarkably high percentage of the company's roughly $45 million market capitalization, underscoring a deep conviction in Verrica's future prospects.
This strong insider alignment follows a series of positive developments for the company. During its third-quarter earnings call, Verrica's management announced it had received "clear and positive feedback from the FDA" regarding the Phase 3 development program for its oncology asset, VP-315, which is being studied for the treatment of basal cell carcinoma. Positive regulatory guidance on a pivotal trial can significantly de-risk the development path for a new drug.
"The recent financing, strongly supported by our management and board, reflects our collective confidence in the growth trajectory of our commercial business and the significant potential of our pipeline," CEO Ted White stated in the financing announcement.
Verrica is also making significant progress with its lead commercial product, YCANTH®, a treatment for the viral skin infection molluscum contagiosum. The company recently received a $10 million milestone payment from its partner, Torii Pharmaceutical, following the drug's approval in Japan. Furthermore, Verrica reported positive feedback from the European Medicines Agency (EMA), suggesting that no additional Phase 3 trials will be needed for a regulatory submission in the European Union, potentially accelerating its expansion into a major new market.
Wall Street has taken note of the company's recent momentum. The consensus 12-month price target from analysts covering the stock stands at $16.33, suggesting a potential upside of over 200% from its current levels. The recent insider activity is likely to bolster investor confidence that the company can bridge that valuation gap.
With its balance sheet now secured and multiple catalysts on the horizon, including the planned initiation of a global Phase 3 trial for YCANTH® in the treatment of common warts, Verrica's leadership has placed a multi-million dollar bet on the company's continued execution and clinical success.