Needham analyst Serge Belanger has maintained their neutral stance on VRCA stock, giving a Hold rating on November 20.
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Serge Belanger has given his Hold rating due to a combination of factors related to Verrica Pharmaceuticals’ recent financial maneuvers and their implications. The company announced a $50 million PIPE financing, which involves common stock, pre-funded warrants, and warrants, allowing them to retire their debt with Orbimed. This move is crucial as it addresses the company’s liquidity issues, given their cash position of approximately $21 million was insufficient to meet operational needs through the fourth quarter of 2025.
Despite the financing being highly dilutive to shareholders, with over 120% dilution, it offers a strategic advantage by removing debt from the balance sheet and extending the company’s operational runway to mid-2027. This shift allows Verrica Pharmaceuticals to refocus on the commercial execution of Ycanth. However, the Hold rating is maintained as there is a need to see more consistent sales growth for Ycanth to establish a clear path forward.
In another report released on November 20, TR | OpenAI – 4o also reiterated a Hold rating on the stock with a $4.50 price target.