Merck & Co. has agreed to pay $10 billion to buy London-based Verona Pharma, scooping up a potential multibillion-dollar new drug to treat chronic obstructive pulmonary disease in a deal announced Wednesday.
The Food and Drug Administration approved Verona’s Ohtuvayre in June 2024 for maintenance treatment of COPD in adults. It’s the first inhaled treatment for the condition in more than 20 years to work in a new way, combining bronchodilator and non-steroidal anti-inflammatory effects.
Sales of the medicine jumped to $71 million in the first quarter this year, putting it on track for the strongest COPD launch in history, Jefferies analyst Andrew Tsai said. He recently raised his peak sales estimate for Ohtuvayre to $4 billion, a figure that tops the $3 billion to $3.5 billion implied by the Merck transaction and one that may still be too conservative, Tsai said in a note to clients Wednesday.
“Since launching Ohtuvayre in August 2024 we have seen rapid and accelerating uptake in the U.S.,” Verona CEO David Zaccardelli said in a joint statement with Merck on Wednesday. “We believe Merck’s commercial footprint and industry-leading clinical capabilities will help accelerate the potential of Ohtuvayre to reach more patients.”
In a presentation for investors, Merck said the drug strengthens its growing cardio-pulmonary portfolio and will offer both near-term and long-term revenue growth. Verona already has a range of studies underway testing the main ingredient, ensifentrine, in other conditions such as asthma, cystic fibrosis and non-cystic fibrosis bronchiectasis.
Merck CEO Rob Davis has been on the lookout for acquisitions in the $10 billion to $15 billion range as he prepares the company to lose patent protection on its top-selling Keytruda cancer drug. In 2021, Merck agreed to pay $11.5 billion for Acceleron Pharma. In 2023, the New Jersey-based company scooped up Prometheus Biosciences for $10.8 billion.
The deal represents the second-biggest acquisition of a biotechnology company this year, after Johnson & Johnson’s $14.6 billion purchase of Intra-Cellular Therapies, according to data tracked by BioPharma Dive. It follows on the heels of Sanofi’s agreement in June to buy Blueprint Medicines for as much as $9.5 billion.
Outside of the J&J and Sanofi acquisitions, it’s been a relatively quiet year in biotech acquisitions as companies adjusted to the economic and regulatory uncertainty that came along with the Trump administration. The Sanofi and Merck deals, coming in rapid succession, may suggest more openness to big deals in the industry.
Merck and Verona expect their transaction to close in the fourth quarter. Tsai said he doesn’t expect any risks to the deal from antitrust regulators at the Federal Trade Commission. Verona’s American depositary receipts jumped 21% to above $104 in early trading Wednesday, close to the proposed purchase price of $107.
