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On Thursday, William Blair analysts adjusted their stance on Vigil Neuroscience Inc (NASDAQ:VIGL), downgrading the company’s stock rating from Outperform to Market Perform. The decision comes amid considerations of the IGNITE study’s uncertain outcomes and the recent acquisition offer from a larger pharmaceutical company. According to InvestingPro data, analyst price targets for VIGL currently range from $11 to $22, while the stock trades at $2.31.
The downgrade reflects the analysts’ view that the proposed $8 per share acquisition price for Vigil Neuroscience is fair, given the current market conditions and funding environment. This valuation is based on the remaining assets of Vigil Neuroscience, which, excluding their lead drug candidate iluzanebart, leaves an inherent value of $7.43 per share. This figure is derived from the potential of their other drug VG-3927 and the company’s cash reserves. InvestingPro data shows the company maintains a healthy current ratio of 2.97, with liquid assets exceeding short-term obligations, though it’s currently burning through cash rapidly.
Analysts noted that if the IGNITE study data for iluzanebart, aimed at treating Adult-onset Leukoencephalopathy with Axonal Spheroids and Pigmented Glia (ALSP), were unequivocally positive, the Vigil board might not have endorsed the deal. However, they surmised that the lack of assigned value to the drug by the acquiring company, Sanofi (NASDAQ:SNY), indicates that the study’s results might not be conclusively favorable.
The analysts expect that Vigil Neuroscience shares will trade close to the $8 cash payout per share during trading hours. Any potential for further increase in the share price is contingent upon the success probability assumptions for VG-3927’s first commercial sale and the regulatory de-risking of the acquisition as the termination of the Hart-Scott-Rodino (HSR) waiting period approaches, which could narrow the trading spread from the deal’s value at close. With a beta of 1.92, VIGL has shown significant price volatility. Subscribers to InvestingPro can access 8 additional key insights about Vigil Neuroscience’s financial health and market performance.
In other recent news, Vigil Neuroscience announced its Alzheimer’s drug candidate, VG-3927, is progressing to Phase 2 trials after showing positive results in Phase 1. The drug demonstrated a favorable safety profile and significant biomarker reduction, supporting its further development. Vigil reported a Q4 2024 adjusted loss per share of $0.57, slightly below analyst estimates. In a major development, Sanofi announced plans to acquire Vigil for $8 per share, valuing the company at approximately $470 million. The acquisition includes a contingent value right of $2 per share, with analysts from JMP expressing confidence in the deal’s completion. Meanwhile, H.C. Wainwright lowered Vigil’s stock target to $14, maintaining a Buy rating, as the company anticipates sharing data from its IGNITE Phase 2 trial in 2025. The FDA has shown interest in an accelerated approval pathway for Vigil’s drug, iluzanebart, based on promising biomarker data. Vigil Neuroscience ended 2024 with $97.8 million in cash, which it expects to sustain operations into 2026, as it advances iluzanebart for ALSP with final Phase 2 data expected in the second quarter of 2025.
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