Merck agrees to buy Verona in US$10b deal
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The news: Merck will buy UK-based Verona Pharma for about USD10 billion ($15.3 billion) to bolster the US drug maker's respiratory treatments in efforts to reduce dependence on its blockbuster cancer treatment.
The numbers: Merck said in a statement released Wednesday that it will pay USD107 per share for Verona (a 23% premium to Tuesday’s closing price), valuing the target at approximately USD10 billion.
Shares in Verona soared 20% in premarket trading on Wednesday on the news.
The context: Merck’s acquisition of Verona will expand the US pharmaceutical maker's offering through the addition of Ohtuvayre. The drug is approved in the US to treat chronic obstructive pulmonary disease (COPD) which could reportedly generate annual sales of almost USD4 billion by the mid-2030s.
Keytruda, Merck’s cancer treatment, is the world’s leading drug with USD30 billion in annual revenue, but is set to come off patent and facing price-setting rules as early as 2028.
“The value that this first in class novel mechanism brings…is an important addition to the armamentarium of patients facing COPD,” Rob Davis, Merck chief executive, told the FT. The acquisition puts Merck on a footing for “a period of really rapid transformation” as it addresses the Keytruda patent cliff, Davis added.
Merck and Verona said that the deal is set to close in the fourth quarter.
What they said: David Zaccardelli, president and chief executive officer, Verona Pharma. “Since launching Ohtuvayre in August 2024 we have seen rapid and accelerating uptake in the U.S. 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.”
The sources: Merck & Verona press release, FT, Bloomberg, Reuters
