Verona (VRNA) Stock Surges 36% in the Past Month: Here's Why
Shares of Verona Pharma VRNA have soared 36.3% since the past month, all thanks to the FDA’s approval of its lead pipeline drug in chronic obstructive pulmonary disease (COPD) indication.
Last month, the FDA approved Ohtuvayre (ensifentrine) for the maintenance treatment of COPD in adult patients. Following this approval, the product is the first inhaled product with a novel mechanism of action available as COPD maintenance treatment in more than 20 years.
The approval also makes Ohtuvayre the company’s first-ever marketed product. Management claims to be prepared for the commercial launch of Ohtuvayre, which is expected in third-quarter 2024.
This FDA approval is based on data from two late-stage studies, ENHANCE-1 and ENHANCE-2, which showed that treatment with Ohtuvayre achieved statistically significant and clinically meaningful improvements in lung function and disease symptoms. Treatment with this medication also exhibited a substantial reduction in the rate and risk of COPD exacerbations.
COPD is a life-threatening respiratory disease that damages the lungs and causes progressive lung function decline. The disease is the third leading cause of death worldwide. Management estimates that more than 8.6 million Americans with COPD are treated chronically.
The FDA’s approval also makes Ohtuvayre the first-in-class dual inhibitor of PDE3 and PDE4 enzymes. Unlike the currently available COPD medications, Verona’s medication combines two properties in one medicine — it is designed to open the airways of patients, making it easier for them to breathe while reducing inflammation in the lungs without using steroids.
These were likely the major factors that sent Verona’s share price soaring after the results were announced. Many Wall Street analysts and investors expected Ohtuvayre’s approval as a potential blockbuster for the company, which targets a market with highly unmet needs.
Year to date, Verona’s shareshave increased 6.7% against the industry’s 3.3% fall.
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Apart from COPD, Ohtuvayre is also being evaluated in separate clinical studies for other chronic respiratory indications like non-cystic fibrosis bronchiectasis, cystic fibrosis and asthma.
This approval also puts the company ahead of Sanofi SNY/Regeneron’s REGN blockbuster drug Dupixent, which is currently under the FDA’s review, seeking label expansion in COPD indication. These companies are seeking the agency’s approval for their drug as an add-on maintenance treatment in certain adult patients with uncontrolled COPD.
Earlier this May, the FDA extended the review of Sanofi/Regeneron’s regulatory filing seeking approval for Dupixent in COPD indication. This delay is on account of the additional data submitted by the companies on the FDA’s request.
Per the agency, the information submitted by the company constitutes a major amendment to the data filed in its earlier regulatory filing. SNY and REGN also confirmed that the FDA did not raise any concerns regarding the approvability of the drug in this indication. A final decision is now expected before the end of this quarter in September.
Zacks Rank & A Key Pick
Verona currently carries a Zacks Rank #4 (Sell). A better-ranked stock in the overall healthcare sector is Compugen CGEN, which sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 60 days, estimates for Compugen’s 2024 earnings per sharehave risen from 2 cents to 5 cents. During the same period, loss estimates per share for 2025 have improved from 27 cents to 11 cents. Year to date, CGEN’s shares have lost 11.6%.
Earnings of Compugen beat estimates in three of the last four quarters while missing the mark on one occasion. CGEN delivered a four-quarter average earnings surprise of 5.79%.
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