Verrica (NASDAQ: VRCA): The Stock Everyone Wrote Off Just Inflected

A microcap turnaround at the inflection point, with a partner-funded pipeline attached at no cost, in a stock still priced on the old story.

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Most investors have one label for this company, and it is two years out of date.

Failed launch.

The product got approved and then went nowhere. The stock lost more than 85% of its value in a year. A reverse split followed, then an emergency financing to clear the debt.

People filed it under broken biotech and moved on.

That label is the opportunity in my opinion.

Because what this is now is a turnaround, and it is already working. Management rebuilt the way the product reaches the customer, and the demand curve turned before anyone bothered to update the story. Volumes grew 51% year-over-year last quarter and set an all-time record in March. April beat March. Gross margins are 87%. The debt is gone.

Here is what makes that interesting.

A turnaround that has already turned is a very different proposition to one you are still betting on. The evidence is in the numbers rather than in the pitch, and the market has not repriced it.

Then there is the second layer, and it is the part I like most.

Sitting on top of the commercial business are two late-stage programmes the market is currently valuing at zero. One goes after a market more than three times the size of the one the company sells into today, in a condition with no approved treatment anywhere in the world, and a partner is funding roughly 90% of the trial bill. The other already has an agreed path with the regulator.

Free optionality, on somebody else’s balance sheet.

So the category here is simple:

A microcap turnaround at the inflection point, with a partner-funded pipeline attached at no cost, in a stock still priced on the old story.

Here’s everything you need to know…