BTIG starts Verona Pharma at buy; PT $17

BTIG initiated coverage of Verona Pharma (NASDAQ:VRNA) with a “buy” rating and a $17 price target. The stock closed at $6.13 on April 17.

Analyst Thomas Schrader writes that Verona is developing RPL554 for chronic obstructive pulmonary disease (COPD) – an enormous and underserved market of about 16 million patients in the U.S. alone.

“The market is crowded with bronchodilators (long-acting beta2 agonistsand long-acting muscarinic antagonistsand their combinations) but a highly active and patient-friendly anti-inflammatory drug like RPL554 is an important advance,” he added. Pivotal trials could begin around the end of 2019.

Mr. Shrader said RPL554 seems an ideal drug to combine with existing COPD medications, “making Verona an attractive M&A target, in our view.”

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