By Chris Wack
Verrica Pharmaceuticals said Monday that it has entered into a non-binding term sheet for a term loan facility of up to $125 million, which it expects to close by the end of this week.
Under the terms of the term sheet, Verrica intends to borrow $50 million immediately following the close of the transaction, with additional capital available in tranches based on the achievement of certain revenue milestones.
The facility is a five-year term loan that matures in July 2028.
Upon close of the transaction, Verrica said it expects the $50 million upfront, plus the $60 million in cash and cash equivalents on-hand as of March 31, to extend its cash runway into the first quarter of 2025.
The company said the term sheet doesn’t represent a definitive loan agreement, and there is no guarantee that it will enter into a definitive loan agreement, close the proposed loan facility with the lender or borrow any funds pursuant to the loan facility.
Verrica Pharma shares are down 13% to $6.45 in premarket trading.
Write to Chris Wack at [email protected]
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