Verona Pharma stock hit a record high Thursday — running up 19% over the past four days — on continued enthusiasm for its COPD treatment, Ohtuvayre.
Ohtuvayre won Food and Drug Administration approval last summer to treat chronic obstructive pulmonary disease, or COPD. COPD is an ongoing condition that damages the lungs and makes it hard to breathe. Patients often experience exacerbations, times of heightened symptoms.
Verona's drug is the first inhaled treatment for COPD that relaxes the muscles in the lungs and widens the airways. It's also not a steroid.
Though it's still early into the launch, analysts are bullish. All nine of the analysts who cover Verona Pharma stock on FactSet rate it a buy.
"Momentum continues on the back of strong Ohtu launch," Truist analyst Joon Lee said in a report to clients earlier this week.
On today's stock market, Verona Pharma stock surged 6.6% to close at 53.64. In addition to closing at a record high, the biotech stock also hit an intraday record at 55.42. Shares have traded above their 50-day moving average since early July, according to MarketSurge. In 2024, Verona shares catapulted nearly 134%.
Verona stock has a nearly perfect IBD Digital Relative Strength Rating of 98, putting it in the top 2% of all stocks when it comes to 12-month performance.
Verona Pharma Stock Rises On Preannouncement
Verona management didn't go into the launch specifics of Ohtuvayre, instead saying the company wants to collect more than 20 weeks of metrics in order to make reliable projections.
Still, on Jan. 7, the company preannounced $36 million and $42 million in sales of Ohtuvayre for the fourth quarter and 2024, respectively. Both metrics are well above analysts' forecasts for $28 million and $33.2 million, according to FactSet. Verona Pharma stock jumped 10.6% that day.
During an investor breakfast, company executives were bullish on Ohtuvayre's launch due to its differentiated approach to COPD treatment. Regeneron Pharmaceuticals and Sanofi's Dupixent blocks an inflammatory cytokine called IL-4. This cytokine is tied to type 2 inflammation. This inflammation type is caused by high levels of white blood cells called eosinophils.
Ohtuvayre, on the other hand, blocks two enzymes called PDE3 and PDE4. This allows it to act as an anti-inflammatory and bronchodilator. It also works across inflammation types.
Truist's Lee notes there is a "growing emphasis on the need to reduce the use of inhaled corticosteroid." Corticosteroids can cause inflammation in the body, leading to other problems. This could put Ohtuvayre ahead of corticosteroids in the treatment paradigm for COPD.
Promising Expectations For 2025
Promisingly for Verona Pharma stock, more than 80% of patients have a copay of less than $10 for Ohtuvayre. The majority pay zero, Lee said.
It's important to note Ohtuvayre is a nebulizer, a device that turns a liquid drug into an inhaled mist. But that hasn't been an impediment to uptake. Management emphasized that "innovation trumps route of administration," Lee said.
Lee rates Verona Pharma stock a buy with a 57 price target.
In another report, Piper Sandler analysts noted Ohtuvayre received its J-code on Jan. 1. A J-code is a billing code, allowing doctors to seek insurance reimbursement for drugs. Also, this year, Verona expects to have Phase 3 data from a study of Ohtuvayre in patients with moderate-to-severe COPD.
The investment bank has a buy rating and 76 price target on Verona Pharma stock.
Follow Allison Gatlin on X/Twitter at @IBD_AGatlin.
