Stifel maintains Vigil Neuroscience stock buy rating, $11 target

On Thursday, Stifel analysts maintained a Buy rating on Vigil Neuroscience Inc (NASDAQ:VIGL) with a price target of $11.00, despite the company’s acquisition by Sanofi (NASDAQ:SNY) at a purchase price of $8 per share. According to InvestingPro data, VIGL has shown strong momentum with a 35.9% year-to-date return, despite its overall "Fair" financial health score. Stifel’s analysis indicates that the acquisition is a positive outcome for Vigil’s shareholders, considering the current challenges in the biotech sector and the failure of a similar Alzheimer’s treatment by ABBV and ALEC.

The acquisition by Sanofi centers on Vigil’s VG-3927, a small molecule TREM2 agonist. This drug candidate has demonstrated encouraging safety, pharmacokinetics (PK), and target engagement in its phase 1 trials. Sanofi intends to further develop VG-3927 for the treatment of Alzheimer’s disease. InvestingPro analysis shows that Vigil maintains a healthy current ratio of 2.97, with more cash than debt on its balance sheet, though it’s currently burning through cash rapidly.

While the $8 per share offer from Sanofi is below Vigil’s initial public offering (IPO) price, it still represents a significant premium of nearly 250%, which suggests a potentially competitive acquisition process. With a beta of 1.92, VIGL has shown considerable market volatility, making this premium particularly noteworthy given the broader market’s performance and the evolving narrative around TREM2’s role in Alzheimer’s disease.

It is important to note that Sanofi will not be acquiring VGL101, another of Vigil’s assets. VGL101 is set to return to Amgen Inc (NASDAQ:AMGN)., from whom it was originally licensed.

The transaction reflects the high stakes and dynamic nature of the biotech industry, especially in the field of Alzheimer’s research where recent developments have influenced investor perceptions and valuation. With this acquisition, Sanofi aims to bolster its pipeline with a promising candidate that could make strides in a disease that has long eluded effective treatments.

In other recent news, Vigil Neuroscience announced positive Phase 1 trial results for its Alzheimer’s drug candidate, VG-3927, which demonstrated a favorable safety profile and strong target engagement. The company plans to advance this candidate into Phase 2 trials in the third quarter of 2025. For the fourth quarter of 2024, Vigil reported an adjusted loss per share of $0.57, slightly missing analyst estimates. The company ended the year with $97.8 million in cash and equivalents, which is expected to fund operations into 2026.

In a significant development, pharmaceutical giant Sanofi announced plans to acquire Vigil Neuroscience for $8 per share, with an additional contingent value right of $2 per share. Both William Blair and JMP downgraded Vigil’s stock rating to Market Perform, reflecting the anticipated completion of the acquisition. H.C. Wainwright adjusted its price target for Vigil to $14, maintaining a Buy rating, as the company anticipates sharing final 12-month analysis from its IGNITE Phase 2 trial in the second quarter of 2025.

Additionally, Vigil is advancing its drug iluzanebart for adult-onset leukoencephalopathy with axonal spheroids and pigmented glia (ALSP), with final Phase 2 data expected in 2025. The FDA has shown interest in a potential accelerated approval pathway for iluzanebart. Analysts have noted the strategic alignment between Sanofi and Vigil, particularly regarding the development of VG-3927, which is seen as a promising asset under Sanofi’s portfolio.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.