Verona Pharma stock jumps 20% on $10B Merck deal—can FDA-approved Ohtuvayre reshape COPD care?
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Verona Pharma stock surged 20% on Wednesday after Merck announced it's buying the British biotech company in a $10.8 billion deal. Merck, through a subsidiary, will pay $107 per American depositary share for Verona Pharma, a company focused on respiratory treatments. This move follows the FDA's recent approval of Verona's drug Ohtuvayre, which is used to manage chronic obstructive pulmonary disease (COPD) in adults.As per the joint announcement, the deal is expected to close in Q4 2025, pending regulatory approval from the U.K. authorities. Meanwhile, Verona's U.S.-listed shares were up 20% at $104.55 in premarket trading, while Merck's stock was slightly higher, rising 0.2%.Merck's decision to acquire Verona Pharma comes just weeks after the U.S. Food and Drug Administration (FDA) granted approval to Ohtuvayre, Verona's lead drug for COPD. Merck CEO Robert M. Davis called Ohtuvayre a strong fit for the company's growing cardio-pulmonary portfolio, saying the drug "complements and expands" Merck's existing treatments.This acquisition allows Merck to strengthen its position in respiratory care, a space it's been eyeing for future growth. With Ohtuvayre already FDA-approved and additional clinical trials underway, Merck likely saw this as a well-timed opportunity to buy into a promising treatment pipeline.Ohtuvayre, Verona Pharma's flagship therapy, is designed for the maintenance treatment of chronic obstructive pulmonary disease (COPD)—a condition that affects over 16 million adults in the U.S. alone, according to the CDC.The drug received FDA approval in June 2024, and it is now being evaluated for additional use in non-cystic fibrosis bronchiectasis, which is another hard-to-treat lung condition. This broader application potential makes Ohtuvayre a valuable long-term asset, not just a single-treatment drug.Given the increasing number of COPD cases and limited long-term therapies in the market, Ohtuvayre could be a key differentiator for Merck in this niche.The deal values Verona Pharma at approximately $10.8 billion, with Merck agreeing to pay $107 per American depositary share (ADS). This represents a ~24% premium over Verona's recent trading price before the announcement.Shareholders of Verona saw an immediate benefit, with stock climbing 20% to $104.55 in early trading hours. The offer price also gives current holders an attractive exit or long-term upside if they believe in Merck's execution capabilities.This acquisition follows a trend of pharma giants turning to biotech startups for fresh innovation rather than developing everything in-house—a strategy that saves time and accelerates go-to-market opportunities.Once the acquisition is finalized—expected sometime in Q4 2025, pending UK regulatory approval—Verona will operate as part of Merck's growing respiratory division. Merck will likely support ongoing trials for Ohtuvayre's use beyond COPD, particularly in non-cystic fibrosis bronchiectasis.Additionally, Merck may integrate Verona's research teams, technologies, and pipelines into its broader global infrastructure to maximize development and commercial potential.This move not only gives Merck access to a revenue-generating asset, but also the scientific expertise and momentum Verona has built around respiratory innovation.This acquisition could mark a turning point in how COPD and related pulmonary diseases are treated. With Merck's global reach and Verona's product innovation, the hope is for more effective, accessible, and scalable treatments.In a market where demand for chronic disease therapies is rising sharply—especially in aging populations—Merck's move positions it well for the long term.As more clinical data becomes available for Ohtuvayre's extended applications, both patients and investors will be watching closely to see how this partnership unfolds.The Verona Pharma stock jump reflects strong investor confidence in Merck's $10B bet on respiratory care. With Ohtuvayre already FDA-approved and more indications under trial, this acquisition could reshape Merck's portfolio—and possibly the future of COPD treatment worldwide.A: Merck bought Verona to expand its COPD drug pipeline with FDA-approved Ohtuvayre.A: Verona develops treatments for COPD and other lung conditions like bronchiectasis.
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