Merck has reached a $10 billion deal to acquire Verona Pharma, a biotech whose first-in-class drug is already commercialized in one prevalent lung disorder and is showing promise in other respiratory conditions. The multi-blockbuster potential of this drug is important to Merck, which is scouting for assets to make up for the steep drop in revenue coming soon when its top overall product tumbles over the patent cliff.
London-based Verona has American depositary shares that trade on the Nasdaq. According to acquisition terms announced Wednesday, Merck will pay $107 for each of those shares, which represents a more than 23% premium to Verona’s closing stock price on Tuesday. When Verona went public in 2017, it priced shares at $13.50 apiece.
The main asset of Verona is Ohtuvayre, a drug that the FDA approved last year as a maintenance treatment for chronic obstructive pulmonary disease (COPD). This inhaled medicine’s main pharmaceutical ingredient, ensifentrine, is a small molecule with a dual mechanism of action. In addition to blocking PDE4 enzymes to stop inflammation, it also blocks PDE3 enzymes to widen the airway. This dual approach may have applications in other respiratory disorders. Mid-stage studies are underway in asthma, cystic fibrosis, and non-cystic fibrosis bronchiectasis.
The bronchiectasis indication is a particularly promising one, as this chronic lung disorder is growing in prevalence and currently has no FDA-approved therapies — though that could change soon. Insmed drug brensocatib is currently under FDA review in non-CF bronchiectasis. An FDA decision for the oral small molecule is expected by Aug. 12. Industry observers project the Insmed drug could become a blockbuster seller. Ohtuvayre gives Merck a way to potentially get a piece of the bronchiectasis market.
When Ohtuvayre was approved in June 2024, it was the first new inhaled COPD drug with a novel mechanism of action in two decades. Since then, Sanofi’s Dupixent and Nucala from GSK — both biologic drugs administered by injection — have expanded their labels specifically to include treatment of COPD driven by type 2 inflammation, a new indication for both blockbuster products.
Ohtuvayre is also projected to become a blockbuster seller. Market uptake for the drug in COPD has been rapid. For the first quarter of this year, Verona reported about 25,000 Ohtuvayre prescriptions filled for COPD and a 50% increase in prescribers of the medication compared to the fourth quarter of 2024. Revenue in the first quarter was $71.3 million, up from $36.6 million in the prior quarter.
Verona CEO David Zaccardelli told MedCity News in an interview last year that he expected his company’s clinical and regulatory validation of PDE3 and PDE4 inhibition with a single molecule would lead other companies to pursue drugs that work this way. He added that Verona was committed to commercializing Ohtuvayre in the U.S., but would seek partners to develop and commercialize it in other markets. So far, the only partner is Shanghai-based Nuance Pharma, which secured rights to the small molecule in Greater China in 2021. In the Merck announcement Wednesday, Zaccardelli said the pharma giant’s commercial footprint and clinical capabilities will enable Ohtuvayre to reach more COPD patients.
Merck’s top overall product is the cancer immunotherapy Keytruda, which accounted for $29.4 billion in revenue last year, a more than 17% increase over sales in the prior year. But Keytruda’s patent expires in 2028, which puts the pharmaceutical giant in the position of finding commercialized assets or drugs in late-stage development with the potential to fill the coming revenue gap.
In an investor presentation, Merck said Ohtuvayre represents a multibillion-dollar commercial opportunity into the mid-2030s. The pharma giant framed the Verona acquisition as complementary to its cardio-pulmonary portfolio, which is currently headlined by Winrevair, a drug that received FDA approval last year for treating pulmonary arterial hypertension. Winrevair came from the $11.5 billion acquisition of Acceleron Pharma in 2021. Merck’s older cardiovascular drugs went to Organon when that unit spun out of the pharma giant earlier that year. Winrevair now stands as the top Merck cardio product, accounting for $419 million in 2024 sales. This drug is also projected to become a blockbuster seller.
“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,” Merck CEO Robert Davis said in a prepared statement. “This novel, first-in-class treatment addresses an important unmet need for COPD patients persistently symptomatic based on its unique combination of bronchodilatory and non-steroidal anti-inflammatory effects.”
Merck’s acquisition of Verona has been approved by the boards of directors of both companies. The deal still needs Verona shareholder and regulatory approvals. The companies expect to close transaction in the fourth quarter of this year.
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