Merck has announced a definitive agreement to acquire Verona Pharma for approximately $10 billion, marking the pharmaceutical giant's largest deal since its $10.8 billion acquisition of Prometheus Biosciences in 2023. The transaction, valued at $107 per American Depository Share, will add Ohtuvayre (ensifentrine), a first-in-class COPD treatment, to Merck's expanding cardio-pulmonary portfolio.
Strategic Acquisition Addresses Patent Cliff Concerns
The acquisition comes as Merck faces the looming patent expiry of its blockbuster cancer drug Keytruda, which generated nearly $30 billion in sales in 2024, with patent protection ending in 2028. Robert M. Davis, Merck's chairman and CEO, emphasized the strategic importance of the deal: "This acquisition of Verona Pharma reflects the commitment we have to delivering innovative treatments to patients and our ability to execute on our science-led and value-driven business development strategy."
The transaction represents a 23% premium to Verona's last closing price on NASDAQ and has been unanimously approved by both companies' boards of directors. The deal is structured as a scheme of arrangement under UK law and is expected to close in the fourth quarter of 2025, subject to regulatory approvals and shareholder consent.
First-in-Class COPD Treatment Shows Strong Market Uptake
Ohtuvayre, approved by the FDA in June 2024, represents the first novel inhaled mechanism for COPD maintenance treatment in more than 20 years. The drug is a selective dual inhibitor of phosphodiesterase 3 and 4 (PDE3 and PDE4), combining bronchodilator and non-steroidal anti-inflammatory effects in a single molecule.
David Zaccardelli, president and CEO of Verona Pharma, highlighted the drug's rapid market acceptance: "Since launching Ohtuvayre in August 2024 we have seen rapid and accelerating uptake in the U.S." The treatment addresses a significant unmet medical need for COPD patients who remain persistently symptomatic despite current therapies.
Addressing Substantial Disease Burden
COPD affects nearly 16 million Americans and an estimated 390 million people worldwide as of 2019, making it the fourth leading cause of death globally. The progressive respiratory condition causes restricted airflow and breathing problems, with no current cure available. Common symptoms include shortness of breath, ongoing cough, wheezing, chest tightness, and fatigue.
Ohtuvayre met its primary endpoints in both ENHANCE-1 and ENHANCE-2 Phase 3 trials, demonstrating statistically significant and clinically meaningful improvements in lung function. Over 96% of Verona's first-quarter revenue of approximately $76 million came from Ohtuvayre therapy sales.
Expanding Pipeline and International Reach
Beyond COPD, Ohtuvayre is currently being evaluated in clinical trials for the treatment of non-cystic fibrosis bronchiectasis, potentially expanding its therapeutic applications. Verona is also developing a fixed-dose combination of ensifentrine and glycopyrrolate, a long-acting muscarinic antagonist (LAMA), for COPD maintenance treatment.
The acquisition will leverage Merck's global commercial footprint and clinical capabilities to accelerate Ohtuvayre's international launch in countries outside the United States. This expanded reach is expected to drive both near-term and long-term growth for the combined entity.
Recent Deal-Making Activity
This acquisition continues Merck's active business development strategy. In recent months, the company held talks to acquire Swiss biotech MoonLake Immunotherapeutics for more than $3 billion and signed a licensing agreement worth up to $2 billion with Jiangsu Hengrui Pharmaceuticals for a heart disease drug.
The transaction will result in the capitalization of most of the purchase price as an intangible asset for Ohtuvayre, which will be amortized as a GAAP-only charge over the product's lifecycle. Merck shares, valued at over $204 billion, have declined more than 18% this year, while news of the acquisition sent Verona's shares soaring approximately 18% in premarket trading.
