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On Friday, Truist Securities demonstrated a positive outlook on Verona Pharma (NASDAQ:VRNA) as analyst Joon Lee increased the price target on the company’s shares to $76.00, up from the previous target of $57.00. The firm maintained its Buy rating on the stock. According to InvestingPro data, analyst targets now range from $60 to $90, with a strong consensus recommendation of 1.38 (Buy). The stock has shown remarkable momentum, delivering a 144% return over the past six months. The adjustment follows the preliminary fourth-quarter results that were disclosed in January, which did not bring any unexpected news.
The analyst’s optimism is partly based on the growth of Verona Pharma’s prescriber base, with an average of about 600 new prescribers added each month. This expansion is backed by IQVIA trends, which indicate a significant turning point in the company’s trajectory. Additionally, the analyst’s discussions with four pulmonologists revealed a positive reception to Verona Pharma’s Ohtuvayre, with plans to maintain or increase prescriptions.
The pulmonologists also indicated that ensifentrine, another of Verona Pharma’s products, has potential applications for bronchiectasis. This insight led Truist Securities to incorporate bronchiectasis into their sum-of-the-parts (SOTP) valuation model. As a result of these findings, the firm has revised its estimates for Ohtuvayre sales upwards, which has contributed to the higher price target for Verona Pharma shares.
The discussions with key opinion leaders (KOLs) in the field have provided Truist Securities with valuable insights into the practical use of Verona Pharma’s treatments. The unanimous positive feedback from these specialists suggests a strong continued launch momentum for Ohtuvayre, as well as a promising future for ensifentrine in treating bronchiectasis.
Verona Pharma’s stock price movement will likely be observed by investors as the market responds to the updated price target and the company’s potential for sustained growth in its product prescriber base. Currently trading near its 52-week high, InvestingPro analysis indicates the stock is slightly overvalued, with a FAIR overall financial health score. For deeper insights into Verona Pharma’s valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers, along with 16 additional ProTips and extensive financial metrics.
In other recent news, Verona Pharma reported fourth-quarter earnings that surpassed analyst expectations, largely due to robust sales of its newly launched COPD treatment, Ohtuvayre. The company posted adjusted earnings per share of -$0.05, beating the consensus estimate of -$0.07, and reported revenue of $35.65 million, significantly above the projected $6.14 million. Ohtuvayre, which was approved in June 2024, achieved net product sales of $36.6 million in the fourth quarter, contributing to full-year net sales of $42.3 million. Verona Pharma’s cash reserves were strong at $399.8 million as of December 31, 2024, up from $271.8 million the previous year.
In other developments, H.C. Wainwright analyst Raghuram Selvaraju raised the price target for Verona Pharma to $75, up from $60, while maintaining a Buy rating. This adjustment is based on a discounted cash flow valuation, considering a 90% probability of approval for their drug ensifentrine in the European market. The analyst highlighted potential risks, such as slower-than-expected commercial uptake in the U.S. and challenges in capitalizing on ensifentrine’s value outside the U.S. Verona Pharma plans to initiate a Phase 2b trial for a fixed-dose combination of ensifentrine and glycopyrrolate in the latter half of 2025. Additionally, the company is advancing regulatory activities for potential marketing authorization submissions in the European Union and UK.
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