Merck & Co., one of the world’s largest pharmaceutical companies, announced a definitive agreement to acquire Verona Pharma Plc for approximately $10.1 billion, strengthening its position in the competitive respiratory drug market. This move underscores Merck’s strategic shift toward chronic obstructive pulmonary disease (COPD) treatment, a sector projected to grow significantly due to rising global cases and limited advanced therapies.
According to MarketWatch, Merck will pay $25 per share in cash to acquire Verona Pharma, marking a 103% premium over Verona’s last closing price. This acquisition centers around Verona’s leading drug candidate, Ensifentrine, an inhaled therapy for COPD patients. Currently under regulatory review by the U.S. Food and Drug Administration (FDA), Ensifentrine is expected to be approved by year-end, with Merck betting on its commercial success.
High-Stakes Bet on Ensifentrine and Market Leadership
Verona Pharma, a London-based biopharmaceutical firm, has been a frontrunner in developing novel treatments for COPD, a progressive lung disease that affects millions globally and ranks as the third-leading cause of death worldwide. Ensifentrine, Verona’s potential blockbuster drug, combines bronchodilator and anti-inflammatory properties, offering an alternative to steroids and long-standing therapies.
As reported by CNBC and Reuters, Merck executives see the acquisition as a natural extension of their “science-led strategy”, aiming to supplement their existing pipeline beyond oncology, where Merck has dominated with its blockbuster cancer drug Keytruda.
The deal comes amid growing investor pressure for Merck to diversify and offset expected revenue losses from Keytruda’s 2028 patent expiration. Analysts view the acquisition as a defensive and offensive play, allowing Merck to gain early access to a first-in-class COPD therapy while also addressing future revenue gaps.
Market Response and Future Outlook
Investors and analysts have largely welcomed the announcement, viewing it as a calculated risk with strong upside. According to Bloomberg, the deal aligns with broader industry trends where big pharma firms are targeting mid-sized biotechs with late-stage assets. The acquisition, expected to close in the third quarter of 2025, is subject to regulatory approvals and customary closing conditions.
The Financial Times (FT) noted that the deal could spark renewed M&A activity in the biotech space, especially among firms specializing in respiratory and inflammation treatments. If Ensifentrine gets FDA approval and performs well commercially, analysts estimate it could generate over $1 billion in annual sales, positioning Merck as a key player in the $20 billion COPD drug market.
Merck’s acquisition of Verona Pharma marks not just a bold financial investment but a signal of the company’s future direction: toward broadening its portfolio with first-in-class treatments that address large, unmet medical needs.
Visit more of our news! Mr. Business Magazine.
Sources:
https://www.ft.com/content/bf1c2253-15b3-426a-975d-15ddca1d84a5
