Update shared on29 Jul 2025
Fair value Increased 13%Verona Pharma's consensus price target was revised upward to reflect Merck’s $10B acquisition offer, anchoring fair value near the deal price due to high deal certainty and limited expectation of competing bids, with the updated analyst target now at $106.22 per share.
Analyst Commentary
- Price targets were adjusted to $107 to reflect the announced $10B Merck acquisition, which set a definitive takeout value per share.
- Multiple analysts downgraded the rating to Neutral/Hold/Peer Perform, citing limited potential for further upside, as the share price is now anchored by the acquisition offer.
- Few expect rival bids to emerge or significant regulatory hurdles, suggesting a high likelihood the deal will close as announced without complications.
- Analysts cited Verona’s lead asset, Ohtuvayre, as strategically valuable to Merck’s respiratory franchise, providing synergy opportunities and competitive positioning versus existing and emerging therapies (e.g., dupi, IL33s).
- Interim upgrades and target raises prior to the acquisition bid were driven by recognition of Ohtuvayre’s differentiated efficacy, positive KOL feedback, a large COPD market opportunity, and increasing investor interest.
What's in the News
- Merck Sharp & Dohme LLC announced a definitive agreement to acquire Verona Pharma plc for $10.3 billion, or $107 per American Depository Share, adding Ohtuvayre® (ensifentrine) to Merck’s cardio-pulmonary portfolio.
- The transaction is expected to be dilutive to Merck’s non-GAAP EPS by ~$0.16 in the first 12 months, turn accretive in 2027 and for the full year 2028, and will be financed through cash, commercial paper, and new debt.
- The proposed acquisition was unanimously approved by both companies’ boards and is pending regulatory, shareholder, and court approvals, with expected closure in Q4 2025.
- News reports indicated the deal represents a 23% premium to Verona’s previous close, with shares rising about 18% on the announcement, and marks Merck’s largest acquisition since Prometheus Biosciences.
- Verona Pharma announced extensive new Phase 3 and nonclinical data for Ohtuvayre® at the 2025 American Thoracic Society Conference, highlighting its first-in-class mechanism and analysis across multiple patient populations.
Valuation Changes
Summary of Valuation Changes for Verona Pharma
- The Consensus Analyst Price Target has significantly risen from $94.10 to $106.22.
- The Future P/E for Verona Pharma has significantly fallen from 26.93x to 23.03x.
- The Consensus Revenue Growth forecasts for Verona Pharma has risen from 112.4% per annum to 119.5% per annum.
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