Leerink starts Verona at buy

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Leerink launched coverage of Verona Pharma (NADAQ:VRNA; AIM:VRP) with a “buy” rating and $22 price target after its recent cross-listing from the London Stock Exchange to NASDAQ. The stock closed at $13.52 on May 19.

Verona is developing RPL554, a dual PDE3/PDE4 inhibitor with both bronchodilator effects and anti-inflammatory properties, as an add-on therapy for patients with chronic obstructive pulmonary disease (COPD) and cystic fibrosis (CF).

Analyst Thomas Schrader writes that in COPD, Verona has adopted a two-pronged approach designed to support approval of a nebulized formulation of RPL554 for the acute hospital setting, with 700,000 patients annually, and in more patient-friendly formulations for the COPD maintenance setting, with 15 million diagnosed patients in the U.S.

“Data to date demonstrate RPL554’s efficacy in COPD patients as a monotherapy and its combinability with widely used bronchodilators,” he added.

Mr. Schrader said the next key data readout, which is expected in 2018, is with regard to the drug as a monotherapy in the COPD maintenance setting and for CF patients stably on approved therapeutics.