RBC Capital Slashes Verrica's Price Target After Third Rejection - What's Next? - Verrica Pharmaceuticals (NASDAQ:VRCA)

Verrica Pharmaceuticals Inc VRCA was slapped with a third FDA rejection for YCANTH (VP-102) as general contract manufacturing organization challenges continue to plague the approval.
RBC Capital Markets has downgraded the stock to Sector Perform from Outperform and lowered the price target from $16 to $4.
The analysts note that the issues fall outside of the VP-102's purview. But as per a follow-up call with management, these recurrent offenses highlight the challenges at play with a manufacturing facility that continues to obstruct regulatory approval.
VRCA is working with the FDA and Sterling to resolve the deficiency and potentially identify a new manufacturing partner for the resubmission.
RBC writes that VRCA plans to file a Type A meeting request by the end of the week and is working with Sterling to present multiple options to FDA to resolve deficiencies expeditiously.
Concurrently, the management is exploring alternative suppliers of VP-102's bulk solution and has identified one non-sterile facility with transfer underway.
As per the analysts, the management hinted at January 2023 for resubmission with a 6-month review period as a conservative estimate regarding the timeline.
Price Action: VRCA shares are up 63% at $2.06 during the market session on the last check Wednesday.

RBC Capital Slashes Verrica's Price Target After Third Rejection - What's Next?