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.
Photo:
Christopher
Occhicone/Bloomberg,
via
Getty
Images