On Wednesday, Truist Securities updated their financial model for shares of Verona Pharma (NASDAQ:VRNA), leading to an increase in the price target for the company's shares. The new target is set at $57.00, up from the previous figure of $44.00, while the firm continues to recommend a Buy rating for the stock.
Currently trading at $47.97 with a market capitalization of $4.05 billion, VRNA has demonstrated remarkable momentum with a 191% return over the past six months. According to InvestingPro analysis, analyst price targets for the stock range from $36 to $77.
The adjustment follows Verona Pharma's announcement of fourth-quarter sales for Ohtuvayre, which totaled approximately $36 million, unaudited. These figures surpassed both Truist Securities' estimate of $15.6 million and the consensus estimate of $16.7 million.
In response to the reported sales, Truist Securities analyst Joon Lee stated, "We are updating our model assumptions for Ohtuvayre, raising our PT to $57 from $44. Reiterate BUY." The company maintains impressive gross profit margins of 90.34% and operates with a moderate level of debt, as revealed by InvestingPro data.
Truist Securities' confidence in the stock is further bolstered by the firm's projections for Ohtuvayre's market penetration and sales. According to their analysis, by 2035, Ohtuvayre could potentially reach around 400,000 patients, which is less than 5% of the approximately 8.6 million U.S. Chronic Obstructive Pulmonary Disease (COPD) market, potentially leading to $3.6 billion in peak U.S. sales.
The analyst also highlighted the strength of Verona Pharma's intellectual property portfolio, expressing a high level of conviction in Ohtuvayre's market exclusivity, which they anticipate will last well into the mid-2030s. This optimism is based on Verona Pharma's collection of intellectual properties.
Looking beyond the current success of Ohtuvayre's launch, Truist Securities is also anticipating updates throughout 2025 regarding Verona Pharma's pipeline. These updates are expected to include developments in Non-Cystic Fibrosis Bronchiectasis (NCFBE), asthma, Cystic Fibrosis (CF), and new formulations in combination with Long-Acting Muscarinic Antagonists (LAMA) and as Dry Powder Inhaler/Metered Dose Inhaler (DPI/MID) formulations.
With a strong liquidity position indicated by a current ratio of 13.03, the company appears well-positioned to fund its development pipeline. For deeper insights into VRNA's financial health and growth prospects, including 15+ additional ProTips and comprehensive valuation metrics, explore the full research report available on InvestingPro.
In other recent news, Verona Pharma has been under the spotlight due to several significant developments. BTIG analysts recently raised Verona Pharma's stock target to $77, citing the early-stage launch of Ohtuvayre, a drug for pulmonary disease. Despite some logistical hurdles, such as the need for updated ordering software in physician offices, the company sees potential for continued growth.
Verona Pharma's preliminary fourth-quarter sales exceeded expectations, contributing to a robust financial position with approximately $400 million in cash and cash equivalents. This success is largely attributed to the reception of Ohtuvayre, introduced to the US market in August.
Analysts from H.C. Wainwright maintained a Buy rating on Verona Pharma shares, following strong third-quarter financial results. The company reported $5.6 million in top-line revenue for the third quarter, surpassing the highest Wall Street estimate of $3.5 million, all generated from sales of Ohtuvayre.
In addition, Verona Pharma announced a net loss of $43 million in its Q3 results, despite the successful launch of Ohtuvayre in the U.S. The drug saw net product sales of $5.6 million within the first seven weeks post-launch, with over 5,000 prescriptions filled by the end of October. These are among the recent developments in Verona Pharma's journey.
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