Tonix Pharmaceuticals stock halted ahead of FDA approval news
Investing.com - Jefferies downgraded Verona Pharma (NASDAQ:VRNA) from Buy to Hold and lowered its price target to $107.00 from $140.00 following news of Merck (NSE:PROR)’s acquisition of the company. Merck (NYSE: MRK), a prominent player in the pharmaceutical industry with a market capitalization of $208.67 billion and robust gross margins of 77%, continues its strategic expansion. InvestingPro analysis shows Merck maintains a "GREAT" financial health score, positioning it well for this significant acquisition.
The downgrade comes as Merck plans to acquire Verona Pharma for $107 per share, representing approximately a 23% premium to the stock’s previous trading price. The transaction is expected to close in the fourth quarter of 2025. For deeper insights into Merck’s valuation metrics and comprehensive analysis, investors can access the detailed Pro Research Report available on InvestingPro.
The acquisition, valued at approximately $10 billion, gives Merck ownership of Ohtuvayre, Verona’s novel PDE3/4 nebulizer treatment for COPD. Jefferies notes the implied acquisition value suggests peak sales potential of $3-3.5 billion or higher, based on a 3x multiple.
Jefferies had recently increased its peak sales estimate for Ohtuvayre by $1 billion to $4 billion, based on its doctor survey results. The firm describes Ohtuvayre as being "in the midst of having the strongest COPD launch in history."
The research firm does not anticipate any regulatory obstacles from the Federal Trade Commission that would prevent the acquisition from proceeding.
In other recent news, Merck is reportedly nearing a $10 billion acquisition of Verona Pharma, with plans to pay $107 per share, marking a 23% premium over Verona’s recent closing price. The acquisition would potentially expand Merck’s respiratory disease treatment portfolio, although no official announcements have been made. Additionally, Merck is set to present new data from its HIV research at the International AIDS Society Conference, showcasing developments in prevention and treatment options. In regulatory news, the FDA has granted priority review for an update to Merck’s WINREVAIR drug label for pulmonary arterial hypertension, with a decision expected by late October 2025. Analyst firm UBS has reiterated its Buy rating on Merck, citing Gardasil as a key revenue driver despite some investor skepticism. Meanwhile, TD Cowen has maintained a hold rating on Merck following a favorable Advisory Committee on Immunization Practices vote for the Enflonsia vaccine, which could open new market opportunities. These developments highlight Merck’s ongoing strategic efforts in acquisitions, research advancements, and regulatory pursuits.
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