Update: MSD confirms $10bn takeover deal for Verona Pharma
The pace of M&A in the pharma sector this year has picked up once again, with MSD agreeing a takeover offer for respiratory medicine specialist Verona Pharma that values the company at around $10 billion.
MSD – known as Merck & Co in the US and Canada – said it expects the acquisition to complete before the end of the year, allowing it to take control of Verona and its first-in-class therapy for chronic obstructive pulmonary disease (COPD).
The dual phosphodiesterase (PDE) 3/4 inhibitor, Ohtuvayre (ensifentrine), was approved by the FDA a year ago, becoming the first inhaled product with a novel mechanism of action available for the maintenance treatment of COPD in more than 20 years.
Billed as a future blockbuster, it has already made inroads into the market, with sales nearly doubling in the first three months of 2025 from the last quarter of 2024, reaching $71 million as marketing applications in Europe and China move towards regulatory decisions.
With an additional indication in bronchiectasis in mid-stage testing and a combination product for COPD based on ensifentrine and glycopyrrolate also in the pipeline, analysts have suggested sales of the franchise could be in the $1 billion to $2 billion range by the end of the decade, potentially hitting as much as $4 billion at peak.
The acquisition – which will see MSD pay $107 for each American Depository Share (ADS) in UK-headquartered Verona – is the biggest by the US big pharma group since it bought immunology drug developer Prometheus Biosciences for $10.8 billion in 2023.
MSD has been snapping up pipeline assets through acquisitions and licensing deals in the last few years as it prepares for the loss of patent protection for its $29.5 billion cancer immunotherapy blockbuster Keytruda (pembrolizumab), which accounted for just under half (46%) of the group's global sales last year.
Adding Ohtuvayre to its portfolio will provide a near-term growth driver as MSD prepares for the loss of Keytruda's market exclusivity in key markets from 2028 onwards, and also add to a growing respiratory disease portfolio at the company.
Last year, MSD claimed FDA approval for pulmonary arterial hypertension (PAH) treatment Winrevair (sotatercept), another would-be blockbuster that it bolted on via the 2021 acquisition of Acceleron Pharma for $11.5 billion.
MSD chief executive Robert Davis said earlier this year that he sees acquisitions up to $15 billion in value as the "sweet spot" for the company and, while he reckons it is well-prepared for the loss of Keytruda exclusivity, he added: "We have always said we do believe we need to do more to continue to augment the pipeline we've built."
