Verve Therapeutics, Inc. (VERV)

Verve Therapeutics, Inc. (VERV)

The first Cathie Wood pick we’re looking at is Verve Therapeutics, a biotech company with one mission: to offer protection against cardiovascular disease. This it intends to do by developing medicines using cutting edge techniques — human genetic analysis, gene editing, messenger RNA (mRNA)-based therapies and lipid nanoparticle (LNP) delivery — to realize its vision and disrupt the present care model by which cardiovascular disease is treated.

Verve’s pipeline has two programs still in the early stages of development. Leading the way is VERVE-101, designed as a single-course in vivo liver gene editing therapy and initially intended to treat heterozygous familial hypercholesterolemia (HeFH), an autosomal dominant disease defined by noticeably raised plasma concentrations of low-density lipoprotein (LDL) cholesterol (LDL-C).

The program, however, has run into some issues. In November, the FDA placed a clinical hold on the company’s Investigational New Drug application (IND) for the candidate, citing the need for more clinical and preclinical data plus a modification to a U.S. study.

Nevertheless, a Phase 1 study for VERVE-101 titled heart-1 is currently taking place in New Zealand and the U.K. An early data readout from the dose-escalation portion is anticipated in H2 2023.

Cathie Wood is evidently not too concerned about the clinical hold; she bought 691,589 shares via ARKK over the past two months. The ETF now holds 1,534,882 VERV shares in total – amounting to more than $35 million at the current share price.

Mirroring Wood’s confidence, and reflecting its high-risk/high-reward status, Stifel analyst Dae Gon Ha calls Verve a “wildcard,” but still considers the stock a “top pick.”

“We believe VERVE-101’s (heterozygous familial hypercholesterolemia [HeFH]) clinical hold can be resolved (timing TBD) – which can drive shares higher – but regardless, Ph.1 heart-1 data (2H23) has a high likelihood of generating positive data – which can also drive shares higher. With a potential stock support at ~$19/shr, we think 2023 could claw back some of the 2022 losses. We expect investor pushback on the commercial viability to continue for VERVE-101 but do not see it as a major hindrance to the stock’s performance,” Ha opined.

Overall, Ha thinks the stock has some way to go, and by some way, we mean 140% of upside. Those are the returns investors are looking at, should the stock make it all the way to Ha’s $56 price target. No need to add, the analyst’s rating is a Buy.

Most agree with Ha’s bullish stance. Based on 6 Buys, and 1 Hold and Sell each, VERV has a Moderate Buy consensus rating. All in all, the analysts expect shares to appreciate by 69%, as indicated by the $39.43 average price target.