Mizuho cuts Vigil Neuroscience stock rating to neutral

On Friday, Mizuho (NYSE:MFG) Securities revised its stance on Vigil Neuroscience Inc (NASDAQ:VIGL), downgrading the stock rating from Outperform to Neutral and reducing the price target to $8.00 from the previous $13.00. This adjustment follows the announcement that Vigil Neuroscience will be acquired by pharmaceutical giant Sanofi (NASDAQ:SNY). The stock, currently trading at $7.88, has surged remarkably with a 216% return over the past week, according to InvestingPro data. The new price target reflects the terms of the acquisition agreement.

In a statement released today, Mizuho analysts provided insights into their decision to lower the price target, noting that the non-tradeable contingent value right (CVR) of $2.00 per share offered to Vigil’s shareholders was not factored into their valuation. The CVR is contingent upon the first sales of Vigil’s Alzheimer’s disease treatment, VG3927, which analysts believe is unlikely to occur until the early 2030s. InvestingPro data shows Vigil maintains strong financial health with a current ratio of 2.97, indicating solid short-term liquidity position.

Mizuho anticipates that the acquisition will proceed without significant regulatory obstacles, as they see no strong reasons for the deal to be blocked by the Federal Trade Commission or on antitrust grounds. Furthermore, the analysts do not expect another bidder to come forward to challenge the acquisition.

The deal is expected to be finalized as initially proposed, with closure anticipated in the third quarter of 2025, as indicated by Vigil Neuroscience and Sanofi. Alternatively, the transaction may conclude later within the same year, pending further developments and the release of the proxy filing, which is due in the coming weeks.

In other recent news, Vigil Neuroscience announced its Alzheimer’s drug candidate, VG-3927, is advancing to Phase 2 clinical trials, following positive results from Phase 1 trials that demonstrated safety and tolerability. Sanofi plans to acquire Vigil Neuroscience for $8 per share in cash, with an additional $2 in contingent value rights, valuing the company at approximately $470 million. This acquisition includes VG-3927, which aligns with Sanofi’s strategy to enhance its neurology pipeline. Guggenheim Securities downgraded Vigil Neuroscience from Buy to Neutral, citing the acquisition as a key factor. Stifel, however, maintained a Buy rating with an $11 target, viewing the acquisition as favorable given the biotech sector’s challenges. William Blair and JMP also downgraded their ratings to Market Perform, reflecting the acquisition’s impact on Vigil’s future operations. The acquisition is expected to be completed in the third quarter of 2025, with Sanofi aiming to integrate Vigil’s assets to bolster its treatment options for Alzheimer’s disease.

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