Merck Acquires Verona Pharma in $10 Billion Deal to Boost Respiratory Portfolio

Merck & Co., Inc. has announced a definitive agreement to acquire London-based Verona Pharma plc for approximately $10 billion. Under the terms of the deal, Merck will pay $107 per American Depository Share (ADS) of Verona Pharma, each representing eight ordinary shares. The acquisition is expected to close in the fourth quarter of 2025, pending regulatory approvals and other customary conditions.

This strategic move will add Ohtuvayre® (ensifentrine) to Merck's cardio-pulmonary portfolio. Ohtuvayre is a first-in-class selective dual inhibitor of phosphodiesterase 3 and 4 (PDE3 and PDE4), approved by the U.S. Food and Drug Administration in June 2024 for the maintenance treatment of chronic obstructive pulmonary disease (COPD) in adults. The drug combines bronchodilator and non-steroidal anti-inflammatory effects, representing the first novel inhaled mechanism for COPD treatment in over two decades.

Merck's Chairman and CEO, Robert M. Davis, stated, "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."

Verona Pharma, headquartered in London with U.S. operations in Raleigh, North Carolina, has seen rapid uptake of Ohtuvayre since its U.S. launch in August 2024, with over 25,000 prescriptions filled in the first quarter of 2025. Analysts project that Ohtuvayre could achieve peak annual sales of up to $4 billion by the mid-2030s.

The acquisition aligns with Merck's strategy to diversify its revenue streams and strengthen its presence in the respiratory treatment market. With the impending patent expiration of its blockbuster cancer drug, Keytruda, in 2028, Merck is proactively seeking to offset anticipated revenue losses. In 2024, Keytruda generated nearly $30 billion in sales, accounting for approximately 46% of Merck's total revenues.

Following the announcement, Verona Pharma's stock experienced a significant increase, reflecting investor confidence in the acquisition's potential. As of July 22, 2025, Verona Pharma's stock is trading at $104.92, while Merck's stock is at $81.22.

Ohtuvayre's pricing has been a topic of discussion. Upon its approval, Verona Pharma set the annual list price at $35,400, nearly three times higher than the Institute for Clinical and Economic Review's (ICER) valuation range of $7,500 to $12,700 per year. ICER expressed concerns that this pricing could lead to restricted access for patients.

The acquisition has several societal implications:

• Patient Access: The integration of Ohtuvayre into Merck's portfolio could potentially enhance patient access to this novel COPD treatment, especially if Merck leverages its extensive distribution networks.

• Healthcare Costs: The high pricing of Ohtuvayre may impact healthcare budgets and insurance coverage decisions, potentially affecting patient affordability and access.

• Employment: Verona Pharma's U.S. headquarters in Raleigh, North Carolina, and its workforce may experience changes post-acquisition, influencing local employment dynamics.

This acquisition is part of a broader trend in the pharmaceutical industry, where companies seek to diversify their portfolios in anticipation of patent expirations of blockbuster drugs. Merck's previous acquisitions, such as Prometheus Biosciences in 2023 and Acceleron Pharma in 2021, reflect this strategic approach.

In summary, Merck's acquisition of Verona Pharma represents a significant step in bolstering its respiratory treatment offerings and positioning the company for sustained growth in the coming decade.