Merck to Acquire Verona Pharma for $10 Billion, Bolstering Respiratory Portfolio

Merck & Co. has announced its definitive agreement to acquire London-based Verona Pharma for approximately $10 billion, a move set to significantly enhance Merck's respiratory disease pipeline. The acquisition, valued at $107 per American Depositary Share (ADS) of Verona Pharma, represents a 23% premium over Verona’s closing stock price on the day prior to the announcement. The boards of both companies have unanimously approved the transaction, which is anticipated to close in the fourth quarter of 2025, pending regulatory and shareholder approvals.

The centerpiece of the acquisition is Ohtuvayre (ensifentrine), Verona Pharma’s flagship drug, which received FDA approval in June 2024 as a maintenance treatment for chronic obstructive pulmonary disease (COPD). Ohtuvayre is notable as the first novel inhaled treatment for COPD in over two decades, featuring a unique dual mechanism of action that combines bronchodilatory and non-steroidal anti-inflammatory effects. The drug has shown a strong market entry, generating $71.3 million in revenue during the first quarter of 2025.

Merck's strategic rationale behind this substantial investment is to diversify its revenue streams and prepare for the impending patent expiry of its top-selling cancer immunotherapy, Keytruda, in 2028. Robert Davis, Merck's Chairman and CEO, stated, "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." Analysts project Ohtuvayre could achieve peak annual sales of up to $4 billion.

Verona Pharma's journey to this $10 billion valuation includes a unique historical trajectory, as highlighted by biotech investor Bruce Booth. > "$MRK will acquire Verona Pharma $VRNA for $10B," Booth stated in a tweet. He further noted, "20 years ago, it was founded as a university spinout in the UK to make respiratory drugs. In 2006, before even raising money privately, it went public via a listing on London's AIM stock exchange, raising 1M GBP... In 2017, it shifted over to the NASDAQ." Booth questioned whether Verona Pharma is the most successful (highly valued) biotech to ever "go public" on London's AIM.

The acquisition underscores a broader trend in the pharmaceutical industry, where major players are actively pursuing strategic mergers and acquisitions to secure innovative assets and new growth drivers. Verona Pharma CEO David Zaccardelli commented, "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." Beyond COPD, Ohtuvayre is also undergoing clinical evaluation for potential applications in other respiratory conditions, including asthma, cystic fibrosis, and non-cystic fibrosis bronchiectasis.