Merck Breathes Life Into Its Respiratory Prospects With $10B Deal to Buy Verona Pharma

Merck has reached a $10 billion deal to amass Verona Pharma, a biotech whose first-in-class drug is already commercialized in a single prevalent lung dysfunction and is exhibiting promise in different respiratory circumstances. The multi-blockbuster potential of this drug is essential to Merck, which is scouting for belongings to make up for the steep drop in income coming quickly when its high total product tumbles over the patent cliff.
London-based Verona has American depositary shares that commerce on the Nasdaq. Based on acquisition phrases introduced Wednesday, Merck can pay $107 for every of these shares, which represents a greater than 23% premium to Verona’s closing inventory worth on Tuesday. When Verona went public in 2017, it priced shares at $13.50 apiece.
The principle asset of Verona is Ohtuvayre, a drug that the FDA authorised final yr as a upkeep remedy for persistent obstructive pulmonary illness (COPD). This inhaled drugs’s predominant pharmaceutical ingredient, ensifentrine, is a small molecule with a twin mechanism of motion. Along with blocking PDE4 enzymes to cease irritation, it additionally blocks PDE3 enzymes to widen the airway. This twin method could have functions in different respiratory problems. Mid-stage research are underway in bronchial asthma, cystic fibrosis, and non-cystic fibrosis bronchiectasis.
The bronchiectasis indication is a very promising one, as this persistent lung dysfunction is rising in prevalence and at the moment has no FDA-approved therapies — although that might change quickly. Insmed drug brensocatib is at the moment beneath FDA evaluation in non-CF bronchiectasis. An FDA determination for the oral small molecule is predicted by Aug. 12. Trade observers challenge the Insmed drug may change into a blockbuster vendor. Ohtuvayre offers Merck a technique to probably get a chunk of the bronchiectasis market.
When Ohtuvayre was authorised in June 2024, it was the primary new inhaled COPD drug with a novel mechanism of motion in 20 years. Since then, Sanofi’s Dupixent and Nucala from GSK — each biologic medication administered by injection — have expanded their labels particularly to incorporate remedy of COPD pushed by kind 2 irritation, a brand new indication for each blockbuster merchandise.
Ohtuvayre can also be projected to change into a blockbuster vendor. Market uptake for the drug in COPD has been fast. For the primary quarter of this yr, Verona reported about 25,000 Ohtuvayre prescriptions stuffed for COPD and a 50% improve in prescribers of the medicine in comparison with the fourth quarter of 2024. Income within the first quarter was $71.3 million, up from $36.6 million within the prior quarter.
Verona CEO David Zaccardelli advised MedCity Information in an interview final yr that he anticipated his firm’s scientific and regulatory validation of PDE3 and PDE4 inhibition with a single molecule would lead different firms to pursue medication that work this manner. He added that Verona was dedicated to commercializing Ohtuvayre within the U.S., however would search companions to develop and commercialize it in different markets. Thus far, the one accomplice is Shanghai-based Nuance Pharma, which secured rights to the small molecule in Larger China in 2021. Within the Merck announcement Wednesday, Zaccardelli mentioned the pharma large’s industrial footprint and scientific capabilities will allow Ohtuvayre to achieve extra COPD sufferers.
Merck’s high total product is the most cancers immunotherapy Keytruda, which accounted for $29.4 billion in income final yr, a greater than 17% improve over gross sales within the prior yr. However Keytruda’s patent expires in 2028, which places the pharmaceutical large within the place of discovering commercialized belongings or medication in late-stage improvement with the potential to fill the approaching income hole.
In an investor presentation, Merck mentioned Ohtuvayre represents a multibillion-dollar industrial alternative into the mid-2030s. The pharma large framed the Verona acquisition as complementary to its cardio-pulmonary portfolio, which is at the moment headlined by Winrevair, a drug that acquired FDA approval final yr for treating pulmonary arterial hypertension. Winrevair got here from the $11.5 billion acquisition of Acceleron Pharma in 2021. Merck’s older cardiovascular medication went to Organon when that unit spun out of the pharma large earlier that yr. Winrevair now stands as the highest Merck cardio product, accounting for $419 million in 2024 gross sales. This drug can also be projected to change into a blockbuster vendor.
“Ohtuvayre enhances and expands our pipeline and portfolio of remedies for cardio-pulmonary ailments whereas delivering near- and long-term development in addition to worth for shareholders,” Merck CEO Robert Davis mentioned in a ready assertion. “This novel, first-in-class remedy addresses an essential unmet want for COPD sufferers persistently symptomatic based mostly on its distinctive mixture of bronchodilatory and non-steroidal anti-inflammatory results.”
Merck’s acquisition of Verona has been authorised by the boards of administrators of each firms. The deal nonetheless wants Verona shareholder and regulatory approvals. The businesses anticipate to shut transaction within the fourth quarter of this yr.
Picture: Christopher Occhicone/Bloomberg, through Getty Photographs