Merck will acquire UK-based Verona Pharma for approximately $10 billion, the companies announced Wednesday, in a move to bolster the U.S. pharmaceutical giant’s respiratory portfolio and reduce its reliance on the blockbuster cancer drug Keytruda.
Keytruda, the world’s highest-grossing drug with nearly $30 billion in sales last year, faces looming patent expirations starting in 2028. In response, Merck has intensified its efforts to diversify, aggressively expanding its pipeline through both internal development and strategic acquisitions.
“Today’s announced agreement with Merck is the culmination of years of focus and determination by the Verona Pharma team advancing Ohtuvayre, the first novel inhaled mechanism for the maintenance treatment of COPD in two decades,” said David Zaccardelli, president and chief executive officer, Verona Pharma.
“Since launching Ohtuvayre in August 2024 we have seen rapid and accelerating uptake in the U.S. We believe Merck’s commercial footprint and industry-leading clinical capabilities will help accelerate the potential of Ohtuvayre to reach more patients living with COPD. This agreement will enable the strong launch trajectory of this important medicine and provides value to Verona Pharma shareholders.”
Since 2021, Merck has nearly tripled its late-stage development portfolio. Notable moves include the $11.5 billion acquisition of Acceleron in 2021, which brought the company Winrevair, a treatment for pulmonary arterial hypertension.
Wednesday’s announcement marks Merck’s first deal of 2025 and its most significant since the $10.8 billion acquisition of Prometheus Biosciences in 2023.
With this transaction, Merck gains access to Ohtuvayre, a newly approved inhaled therapy for chronic obstructive pulmonary disease (COPD), commonly referred to as “smoker’s lung.” The treatment has generated $42.3 million in revenue in 2024, and analysts project it could eventually bring in over $3 billion annually.
Under the agreement, Merck will pay $107 per American depository share, representing a 23% premium to Verona’s last Nasdaq closing price. Following the news, Verona shares jumped 20% in premarket trading, while Merck’s stock rose slightly.
“Merck deal looks good at first glance. Given their home run with Prometheus and Winrevair, this (Ohtuvayre) looks like a potential complementary therapy,” said Kevin Gade, chief operating officer at Bahl & Gaynor.
That view was echoed by BMO Capital Markets analyst Evan Seigerman, who also cautioned that Merck still needs to demonstrate how it will ensure a smooth revenue transition post-Keytruda: “more is needed to assure investors of a smooth transition of revenue without a strong decline after Keytruda expiry.”
The transaction was unanimously approved by both the Merck and Verona Pharma Boards of Directors and is intended to be effected by way of a scheme of arrangement under UK law.
Pump Radar
Stock Alerts