Lucid Capital Markets Starts Verrica Pharmaceuticals (VRCA) at Buy

Lucid Capital Markets analyst Dev Prasad initiates coverage on Verrica Pharmaceuticals (NASDAQ: VRCA) with a Buy rating and a price target of $19.00.

The analyst comments "We are initiating coverage of Verrica Pharmaceuticals (VRCA) with a Buy rating and a $19 price target, based on a risk-adjusted DCF supported by YCANTH sales in molluscum contagiosum and probability-weighted contribution from the common warts program. We view Verrica as a de-risked dermatology platform transitioning to a scalable, procedure- driven growth model with expanding global leverage and strong capital efficiency. YCANTH holds a first-mover advantage as the only in-office FDA-approved therapy for molluscum contagiosum, a large, underpenetrated pediatric market with broad payer coverage, a permanent J-code, and aligned in-office economics, supporting a U.S. peak sales estimate of ~$172M by 2031, reflecting conservative ~7% market penetration. The common warts indication offers the next major growth driver, with positive Phase 2 data (51% complete clearance), FDA-aligned Phase 3 design, and partner Torii (Shionogi) funding ~90% of pivotal costs. Our base-case model assumes a 2028 launch and ~$96M in peak sales by 2031 at 50% probability of success. Internationally, Torii’s Japan approval of YCANTH (TO-208) and favorable EMA feedback supporting an EU filing by late 2026 provide additional upside with minimal capital outlay. Ex-U.S. sales, including Torii’s Japan approval of YCANTH (TO-208) and potential EU filing by late 2026 following favorable EMA feedback, represent additional upside not included in our valuation. Finally, VP-315, an intratumoral oncolytic peptide for basal cell carcinoma, demonstrated 51% histologic clearance and 97% overall response rate (ORR) in Phase 2 adds longer-term, unmodeled upside. Overall, we see continued U.S. launch momentum, global expansion, and label growth positioning Verrica as a capital-efficient, high- margin dermatology platform trading below intrinsic value."

For an analyst ratings summary and ratings history on Verrica Pharmaceuticals click here. For more ratings news on Verrica Pharmaceuticals click here.

Shares of Verrica Pharmaceuticals closed at $3.28 yesterday.

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