Verrica Pharmaceuticals announced on Monday that it has reached a non-binding term sheet for a term loan facility worth up to $125 million. The company anticipates closing the agreement by the end of the week.
According to the terms outlined in the sheet, Verrica plans to initially secure a loan of $50 million immediately after the transaction concludes. Additional capital will be made available in installments based on specific revenue milestones.
This five-year term loan is set to mature in July 2028.
Verrica expects that upon finalizing the deal, the upfront $50 million along with the $60 million in cash and cash equivalents it had on hand as of March 31 will extend its cash runway into the first quarter of 2025.
It is important to note that the term sheet does not serve as a definitive loan agreement, nor does it guarantee the finalization of a loan agreement, the closure of the proposed loan facility with the lender, or acquiring any funds under this facility.
In premarket trading, Verrica Pharma’s shares have dropped by 13% to $6.45.