Merck announced Wednesday it will acquire UK-based Verona Pharma for approximately $10 billion, deepening its commitment to respiratory treatments as the company prepares for a revenue gap following the patent expiry of its cancer blockbuster, Keytruda.
This marks Merck’s largest transaction since its $10.8 billion acquisition of Prometheus Biosciences in 2023 and signals an aggressive shift toward diversifying its pipeline.
As part of the agreement, Merck will pay $107 per American depository share for Verona—representing a 23% premium to Tuesday’s closing price of $86.86.
Shares of Verona surged over 20% in premarket trading on the news.
Ohtuvayre at the center of Merck’s respiratory ambitions
A key driver of the acquisition is Verona’s lead asset, Ohtuvayre, an inhalable treatment for chronic obstructive pulmonary disease (COPD).
Approved by the US Food and Drug Administration in 2023, Ohtuvayre represents the first new inhaled therapy for COPD in two decades.
COPD, often referred to as “smoker’s lung,” affects nearly 16 million adults in the United States and remains a major cause of mortality and morbidity.
Ohtuvayre’s dual-action mechanism—combining bronchodilation with non-steroidal anti-inflammatory properties—sets it apart from existing therapies.
Since its commercial launch in August 2024, the drug has generated $42.3 million in revenue.
Analysts at Jefferies expect Ohtuvayre’s peak annual sales to exceed $3 billion, underscoring its potential to become a major contributor to Merck’s long-term growth.
Merck said the addition of Ohtuvayre will strengthen its existing cardio-pulmonary drug portfolio, which includes Winrevair and Enflonsia, treatments it gained through its 2021 acquisition of Acceleron Pharma for $11.5 billion.
Preparing for the post-Keytruda era
Merck’s acquisition strategy is being shaped by the anticipated 2028 patent expiry of Keytruda, the immunotherapy that brought in nearly $30 billion in revenue last year and remains the world’s top-selling prescription medicine.
As the company faces a future without Keytruda’s monopoly, it is actively pursuing acquisitions that can cushion the anticipated revenue decline.
“Ohtuvayre complements and expands our pipeline and portfolio of treatments for cardio-pulmonary diseases while delivering near- and long-term growth as well as value for shareholders,” said Robert M. Davis, chairman and chief executive officer, Merck.
“This novel, first-in-class treatment addresses an important unmet need for COPD patients persistently symptomatic based on its unique combination of bronchodilatory and non-steroidal anti-inflammatory effects. We look forward to welcoming the talented Verona Pharma team to Merck,” he said.
Verona CEO David Zaccardelli echoed the sentiment, stating that Merck’s commercial reach would help expand Ohtuvayre’s market footprint.
“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 US 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,” he said.
The deal, still subject to regulatory approval, is expected to close by the end of 2025.
Merck is also rumoured to be in ongoing discussions with other biotech firms, including Switzerland’s MoonLake Immunotherapeutics, as it builds out its post-Keytruda pipeline.
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