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.
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.
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.
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.