July 9, 2025 — Merck & Co. (NYSE: MRK) has announced the $10 billion acquisition of UK-based Verona Pharma, strengthening its position in respiratory treatments as it prepares for the upcoming Keytruda patent expirations beginning in 2028.

Keytruda, Merck’s flagship immunotherapy drug, brought in nearly $30 billion in revenue last year, but its exclusivity is nearing its end. To mitigate potential revenue losses, the pharmaceutical giant is aggressively expanding its drug portfolio through strategic acquisitions and internal development.

Diversifying Beyond Oncology

The deal, revealed on Wednesday, marks Merck’s first major acquisition of 2025 and the largest since its $10.8 billion Prometheus Biosciences deal in 2023. Verona Pharma brings to the table Ohtuvayre, a recently approved inhaled medication for chronic obstructive pulmonary disease (COPD), often referred to as “smoker’s lung.”

Ohtuvayre generated $42.3 million in sales in 2024, and analysts project it could surpass $3 billion in annual revenue, making it a strong contender as Merck seeks post-Keytruda growth drivers.

Deal Details and Market Reaction

Merck will pay $107 per American Depository Share, reflecting a 23% premium over Verona’s last closing price on the Nasdaq. Following the announcement, Verona shares surged by 20% in premarket trading, while Merck’s stock saw modest gains.

“Merck deal looks good at first glance. Given their home run with Prometheus and Winrevair, this [Ohtuvayre] looks like a potential complementary therapy,” said Kevin Gade, COO at Bahl & Gaynor.

Evan Seigerman of BMO Capital Markets echoed the optimism but noted the company still needs to reassure investors about maintaining revenue momentum after Keytruda’s exclusivity ends.

Strategic Growth and Pipeline Expansion

As its blockbuster cancer therapy Keytruda faces patent expiry, Merck is looking for new growth drivers

Since 2021, Merck has tripled its late-stage pipeline, thanks to a blend of in-house R&D and acquisitions. In addition to Ohtuvayre, the company acquired Winrevair—a pulmonary arterial hypertension drug—via its $11.5 billion purchase of Acceleron.

These moves illustrate Merck’s strategy to build a diversified therapeutic portfolio and avoid overreliance on a single blockbuster drug.

For author: Staff Writer
Courtesy of: Forbes
Source: Reuters