Jefferies has initiated coverage of Veradermics (NYSE:MANE) with a ‘buy’ rating, anticipating potential growth driven by a novel formulation of minoxidil, a decades-old drug commonly used to treat hair loss. The firm set a price target of $75.00 per share, representing a 63% increase over the stock’s current trading price of $45.85 as of today’s opening.
The investment bank’s optimism centers on Veradermics’ Phase 3 clinical trial for its oral minoxidil formulation, VDPHL01. Jefferies analysts believe the trial has a “high likelihood of success,” according to a research note, due to the extended-release properties of VDPHL01 which are designed to maintain consistent plasma concentrations of the drug. Millions currently use topical minoxidil, and a growing number are taking low-dose oral versions off-label, creating a substantial existing market.
Veradermics recently completed an upsized initial public offering, with Jefferies, Leerink Partners, Citigroup, and Cantor acting as joint book-running managers. The company also granted underwriters an option to purchase additional shares, indicating strong investor interest at the time of the IPO.
The potential market for an improved oral minoxidil treatment is estimated at $2 billion, according to Jefferies. The firm’s analysis suggests that a more effective and convenient formulation could capture a significant share of this market. The company is currently awaiting potential FDA approval for VDPHL01.
