Verona Pharma Downgraded to Neutral, Price Target Increases to $107.00.

Verona Pharma's (VRNA) rating has been downgraded from 'Buy' to 'Neutral' by HC Wainwright & Co, while its price target has been increased from $90 to $107, representing an 18.89% increase. The average target price for VRNA is $103.10, with a high estimate of $107 and a low estimate of $75. The average target implies a 1.65% downside from the current price of $104.83.

Verona Pharma (VRNA) has experienced a significant shift in its stock rating and price target following a recent acquisition proposal by Merck. On July 8, 2025, Merck announced its intention to acquire Verona Pharma for approximately $10 billion, paying $107 per American Depositary Share (ADS). This acquisition is set to close in the fourth quarter of 2025 and aims to enhance Merck’s respiratory disease treatment portfolio.

In response to this development, HC Wainwright & Co downgraded VRNA’s stock rating from 'Buy' to 'Neutral' and increased its price target from $90 to $107, representing an 18.89% increase [1]. The average target price for VRNA is $103.10, with a high estimate of $107 and a low estimate of $75. This average target implies a 1.65% downside from the current price of $104.83.

The proposed acquisition is viewed as favorable to Verona Pharma shareholders, as it would relieve the company of the significant resource requirements needed to fully commercialize Ohtuvayre independently. However, Roth/MKM, the research firm that downgraded the stock to Neutral, also noted potential challenges, including the "overlooked pipeline promise" and potential generic competition that might enter the market earlier than anticipated [1].

Verona Pharma's stock has surged nearly 485% over the past year and is currently trading near its 52-week high of $104.93. The company's impressive gross profit margins of 95% and its innovative COPD treatment, Ohtuvayre, have driven its remarkable growth. Ohtuvayre, a first-in-class dual inhibitor of phosphodiesterase 3 and 4 enzymes, has shown promising results in clinical trials and is expected to achieve sales of $91.8 million in the second quarter of 2025, with full-year sales estimated at $409.1 million [2].

Despite the positive outlook, the acquisition and the downgraded rating suggest a cautious approach from analysts. The market remains optimistic about Verona Pharma's market potential, with analysts projecting Ohtuvayre to reach blockbuster status around 2027. However, the potential challenges and the acquisition's impact on the company's future prospects warrant careful consideration.

References:
[1] https://www.investing.com/news/analyst-ratings/verona-pharma-stock-rating-downgraded-to-neutral-by-rothmkm-after-merck-offer-93CH-4129334
[2] https://tickeron.com/blogs/the-rapid-ascent-of-verona-pharma-how-the-stock-of-vrna-increased-122-in-just-three-months-11361/