Veradermics jumps on successful hair-loss pill trial. Is the stock a buy?

Shares of biotech Veradermics rose 12.4% on Monday after the company reported successful trial results for its hair-loss drug. After six months, the pill produced greater hair growth than placebo. It could eventually become the first FDA-approved nonhormonal pill to treat pattern hair loss, which affects 50 million men in the U.S.

Veradermics, which is developing a pill for androgenetic alopecia, or male pattern hair loss, jumped 12.4% to $122.30 per share on the New York Stock Exchange on Monday. The stock was down around 4% in early trading on Tuesday as of this writing.

The company said its drug met all primary and secondary endpoints in its second phase III clinical trial: patients taking the drug experienced significantly greater hair growth than those receiving a placebo.

The company is developing VDPHL01, an extended-release oral formulation of minoxidil. The latest trial enrolled 536 men with mild to moderate male pattern hair loss. The drug stimulated significant hair growth: hair counts increased by 28.6 hairs per square centimeter with once-daily dosing and 36.4 hairs per square centimeter with twice-daily dosing, versus 6.6 hairs per square centimeter in the placebo group. The company reported comparable results from another trial in April. Together, the two studies enrolled more than 1,000 men.

According to the company, the drug was generally well tolerated over six months of treatment and could become the first nonhormonal pill approved by the U.S. Food and Drug Administration to treat pattern hair loss, which affects 50 million men in the U.S.

“These results indicated that our proprietary, extended-release VDPHL01 formulation delivered marked increases in hair growth, while minimizing side effects and cardiac risk,” said Veradermics CEO Dr. Reid Waldman. “VDPHL01 has the potential to transform the treatment of pattern hair loss for millions of people.”

Minoxidil has long been used to treat hair loss, mainly as a topical treatment, Reuters reports. It is the active ingredient in Rogaine, which is applied to the scalp. Doctors also prescribe minoxidil pills for hair loss, though they are not approved for that use – they are used to treat severe high blood pressure.

The concentration of minoxidil that affects the heart is roughly 10 times the level needed to stimulate hair growth, Veradermics notes. VDPHL01’s formulation is designed to maintain the desired concentration by releasing the drug slowly.

The hair-growth supplement Nutrafol, which costs around $90 a month, or roughly $1,000 a year, could serve as a pricing benchmark for the new drug, Veradermics Chief Commercial and Strategy Officer Mark Neumann said on a conference call with investors. By comparison, minoxidil pills cost around $28 a month at retail pharmacies.

The company plans to release data covering 12 months of treatment later this year, with top-line results from its trial in women expected in the first half of 2027.

To fund the most expensive stage of clinical trials and prepare for a commercial launch, Veradermics raised $294.8 million in its February IPO. The company sold 17.3 million shares at $17 apiece. As of the close on Monday, the stock was trading at more than seven times its IPO price.

“The key push back we hear is around the rationale for using VDPHL01 when inexpensive generic oral minoxidil is widely available. However, with these efficacy data, we believe the commercial case for VDPHL01 is now very strong,” Cantor Fitzgerald analyst Prakhar Agrawal told Reuters.

All seven Wall Street analysts covering the stock rate it a “buy.” Their average target price is $164.80 per share, implying 35% upside from current levels.