Verona Pharma (VRNA) Rebounded from Challenging Q1

ClearBridge Investments, an investment management company, released its “ClearBridge Small Cap Strategy” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. The small-cap stocks experienced volatility in the second quarter. The Russell 2000 Index rebounded 10% of its November 2024 record highs just 55 days after the “Liberation Day” decline. It was driven by growth, momentum, high-beta, and low-quality stocks. Even though small-cap stocks rose, they failed to outpace the larger-cap peers due to perceived sensitivity to macroeconomic shocks. The Russell 2000 returned 8.5% for the quarter compared to the 11.1% of the Russell 1000 Index. The strategy underperformed the benchmark in this backdrop. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its second-quarter 2025 investor letter, ClearBridge Small Cap Strategy highlighted stocks such as Verona Pharma plc (NASDAQ:VRNA). Verona Pharma plc (NASDAQ:VRNA) is a biopharmaceutical company. The one-month return of Verona Pharma plc (NASDAQ:VRNA) was 0.55%, and its shares gained 252.69% of their value over the last 52 weeks. On September 15, 2025, Verona Pharma plc (NASDAQ:VRNA) stock closed at $106.37 per share, with a market capitalization of $9.039 billion.

ClearBridge Small Cap Strategy stated the following regarding Verona Pharma plc (NASDAQ:VRNA) in its second quarter 2025 investor letter:

"Another top contributor was biopharmaceutical company Verona Pharma plc (NASDAQ:VRNA), which rebounded from a difficult first quarter. After the company received favorable designation from the FDA for its Ohtuvayre drug treatment for chronic obstructive pulmonary disease patients, as well as applications treating cystic fibrosis and asthma, Merck announced that it would acquire Verona at a premium."

Verona Pharma plc (NASDAQ:VRNA) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 59 hedge fund portfolios held Verona Pharma plc (NASDAQ:VRNA) at the end of the second quarter, which was 51 in the previous quarter.  While we acknowledge the potential of Verona Pharma plc (NASDAQ:VRNA) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Verona Pharma plc (NASDAQ:VRNA) and shared TimesSquare Capital U.S. Focus Growth Strategy's views on the company. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.