Verrica Pharmaceuticals Shares Plumb New Depths After VP-102 Setback >VRCA

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Colin Kellaher. By

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Shares of Verica Pharmaceuticals Inc. fell more than 50% and hit a new all-time low on Wednesday after the dermatological therapeutics company’s latest blow to win regulatory approval for its lead drug candidate.

Verica said late Tuesday that the US Food and Drug Administration again turned down its application for VP-102 for the skin disease molluscum contagiosum because of problems at a contract manufacturing plant, where the drug is made in bulk.

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The FDA initially rejected Verrica’s application for VP-102 in July 2020, seeking additional details on certain aspects of the company’s chemistry, manufacturing and control processes, and human factors validation.

The agency rejected Verica’s application again last September, partly because of issues identified during an inspection of a contract manufacturing plant owned by privately held Sterling Pharmaceuticals Services LLC.

Verica said it believed the issues were resolved to the FDA’s satisfaction when it resubmitted its application in November, but the company said Tuesday that the FDA’s review of the plant found deficiencies that resulted in Sterling being “settled”. Placed at “Official Action Indicated” status, meaning the agency will recommend regulatory and/or administrative actions.

Verica said that the FDA, which indicated in its full response letter that the agency would not approve the VP-102 application in its current form, did not identify any deficiencies other than those at the Sterling plant, and that the FDA had issues. None found during the re-inspection were specific to the VP-102’s build.

The West Chester, PA, company said that the FDA had no open questions upon review of the application and was prepared to communicate the VP-102 label, but the agency’s policy was to allow it to communicate a label and during a contract. Prevents a drug from being approved. The construction organization official action is on the indicated position.

Following the latest setback, RBC Capital Markets analysts Gregory Renza and Yinglu Zhang lowered their recommendation on Verica shares to outperform the sector and lowered their price target on the shares from $16 to $4, saying That they are going over the edge as they await clarity on a new path of approval.

Verica said it is working to help Sterling address the issues identified by the FDA, and it is also engaging another contract manufacturing organization as an alternative supplier of VP-102’s bulk solution. .

The company also said that PBM Capital, a health-focused investment firm run by Paul Manning, Verica’s chairman and largest shareholder, has expressed its continued support and is confident that it will have enough money to fund its operations through potential approvals. Will have access to sufficient capital. VP-102 for molluscum, a highly contagious viral skin disease for which there is currently no FDA-approved treatment.

RBC analysts said a lucrative molluscum end-market awaits VP-102, given the greater severity of issues at Sterling and the potential switch to a new supplier, to address potential shortfalls and resubmit the application. expect.

Shares of Verica were recently changing hands at $2.23, down nearly 60%, after falling to .
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20 — their lowest level since the company went public in June 2018 — at the start of the session.

Write to Colin Kellaher at [email protected]

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