Merck & Co. is approaching a deal to acquire early-stage biotech Verona Pharma in a transaction valued at approximately $10 billion, representing the company's largest acquisition since the $10.8 billion takeover of Prometheus Biosciences. Merck’s offer stands at $107 per share, a premium of about 23%. Central to the deal is Verona’s Ohtuvayre, an inhaled treatment for COPD that received FDA approval earlier this year and has already generated more than 25,000 prescriptions in Q1.
Analysts forecast Ohtuvayre could reach peak annual sales of $4 billion by the mid-2030s, fueling Merck’s drive to reinforce its respiratory drug franchise. The acquisition aligns with Merck’s broader strategy to counter balance losses from its ground-breaking oncology drug Keytruda, which is likely to face patent cliffs and pricing pressure by 2028. After acquiring Winrevair in 2021, Merck continues to focus on specialty respiratory therapies, marking Ohtuvayre as a significant leap forward.
Verona also has additional lung disease assets in its pipeline—targeting conditions like asthma and bronchiectasis—offering future expansion. Once the deal closes, pending customary regulatory reviews, Merck is expected to accelerate its global launch strategy, particularly in Europe and emerging markets. The announcement has prompted a cautious rally in Merck's stock, which had been lagging due to concerns around patent expirations and product lineup weaknesses.
Verona’s integration into Merck promises immediate commercial upsides, especially in respiratory care—a strategic complement to Merck’s oncology dominance. The acquisition’s success hinges on seamless regulatory approval and efficient global roll-out. If executed strategically, this deal could manage Keytruda’s sunset while enhancing Merck's position in high-growth therapeutic categories.