Verrica Pharmaceuticals, Inc. ($VRCA) Investor Settlement
Verrica Pharmaceuticals has reached a tentative settlement to resolve investor claims that it misled the market about FDA inspection problems at Sterling and the resulting approval risk for VP-102.
Outline:
In May 2021, the FDA inspected Sterling, a key contract manufacturer for VP-102, and issued a Form 483 tied to quality problems. On September 20, 2021, Verrica disclosed a second complete response letter tied to deficiencies at Sterling, but continued presenting the issues as resolved. In February 2022, the FDA reinspected Sterling, and on May 24, 2022, Verrica disclosed a third complete response letter after Sterling was placed on OAI status. The case has now moved to a tentative settlement.
Timeline:
September 2019: Verrica submitted its first NDA for VP-102 for the treatment of molluscum.
July 14, 2020: Verrica disclosed that the FDA issued a complete response letter on its first NDA.
December 23, 2020: Verrica resubmitted the NDA for VP-102.
May 19, 2021: Verrica told investors it expected required FDA inspections to proceed according to plan.
September 20, 2021: Verrica disclosed a second complete response letter tied to deficiencies at Sterling.
November 29, 2021: Verrica resubmitted the NDA after saying the Sterling inspection issues had been resolved.
May 24, 2022: Verrica disclosed a third complete response letter after the FDA’s February 2022 reinspection of Sterling.
Background:
Verrica is a dermatology therapeutics company whose business was centered on VP-102, a cantharidin-based treatment for molluscum. Because there were no FDA-approved products for molluscum at the time, VP-102 was a major commercial opportunity for the company.
The dispute centers on the product’s manufacturing path to approval. Verrica relied on Sterling as a contract manufacturer, and FDA inspections of that facility became critical to whether VP-102 could win approval.
Investors say the risk was much more serious than the company disclosed. According to the source, the FDA inspected Sterling in May 2021, issued a Form 483, and later tied a September 2021 complete response letter to deficiencies at that facility.
Verrica later told the market the Sterling issues had been satisfactorily resolved and resubmitted its NDA. But after a February 2022 reinspection, the FDA again found problems, Sterling was placed on OAI status, and Verrica disclosed a third complete response letter in May 2022.
The complaint says those events showed the company had understated the regulatory risk around Sterling and VP-102’s approval timeline. Verrica later replaced Sterling for bulk solution manufacturing, resubmitted the NDA, and finally obtained FDA approval in July 2023. The matter has now moved to a tentative settlement.
What Can Investors Expect Now?
Verrica Pharmaceuticals, Inc. has reached a tentative settlement to resolve investor claims that it misled the market about FDA inspection problems at Sterling and the resulting approval risk for VP-102.
If you were damaged due to this situation, you can file for a payout and get your share of the settlement. You can check if you are eligible and other details in the FAQ section.
Frequently Asked Questions
All persons and entities that purchased or otherwise acquired Verrica securities between May 19, 2021 and May 24, 2022, inclusive, and who were damaged thereby
No, if you have purchased securities within the class period, you are eligible to participate.
You can participate in the settlement and retain (or sell) your securities.
The entire process usually takes 4 to 9 months after the claim deadline. But the exact timing depends on the court and settlement administration.
If you're eligible, you can file your claim directly from this case page by clicking the "Collect Payout" button.
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