Verona Pharma to be acquired by Merck (MRK) for $107 per ADS
- Co announced that the companies have entered into a definitive agreement under which Merck, through a subsidiary, will acquire Verona Pharma for $107 per American Depository Share, each of which represents eight Verona Pharma ordinary shares, for a total transaction value of approximately $10 billion.
- Through this acquisition Merck will add Ohtuvayre, a first-in-class selective dual inhibitor of phosphodiesterase 3 and 4 (PDE3 and PDE4), to its growing cardio-pulmonary pipeline and portfolio. The U.S. Food and Drug Administration approved Ohtuvayre in June 2024 for the maintenance treatment of chronic obstructive pulmonary disease (COPD) in adult patients. Ohtuvayre is the first novel inhaled mechanism for the treatment of COPD in more than 20 years and combines bronchodilator and non-steroidal anti-inflammatory effects. Ohtuvayre is also being evaluated in clinical trials for the treatment of non-cystic fibrosis bronchiectasis.
- The transaction was unanimously approved by both the Merck and Verona Pharma Boards of Directors and is intended to be effected by way of a scheme of arrangement under UK law. Closing of the proposed acquisition is subject to approval under the Hart-Scott-Rodino Antitrust Improvements Act, approval of Verona Pharma shareholders, sanction by the High Court of Justice of England and Wales and other customary conditions. The transaction is expected to close in the fourth quarter of 2025 and will result in the capitalization of most of the purchase price as an intangible asset for Ohtuvayre (which will be amortized as a GAAP-only charge over the life of the product).
An estimated 11.7 million people in the U.S. contend with COPD, or chronic obstructive pulmonary disease. Verona's Ohtuvayre blocks enzymes called PDE3 and PDE4. This allows it to act as an anti-inflammatory and a bronchodilator, relaxing the muscles in the lungs and widening the airways.
The acquisition reflects Merck's work to expand its portfolio of treatments for cardio-pulmonary diseases, Chief Executive Robert Davis said in a statement.
"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," he said.
Verona Pharma's Commercial Success
Verona's drug works differently from Regeneron Pharmaceuticals' (REGN) and Sanofi's (SNY) Dupixent, which won approval to treat COPD last September. Dupixent is an injected drug that blocks an inflammatory cytokine called IL-4. This allows it to tackle one form of inflammation. But Verona's executives said Ohtuvayre can work on both forms of inflammation.
During the first quarter, Ohtuvayre brought in $71.3 million in sales, growing 95% sequentially and crushing expectations for $50.3 million. Verona Pharma said there were 25,000 Ohtuvayre prescriptions filled in the first three months of the year.
