Merck bets $10B on COPD breakthrough with Verona Pharma buyout

Merck (or MSD if you live in Europe) is acquiring Verona Pharma for $10 billion, gaining access to Ohtuvayre, a first-in-class, FDA-approved treatment for chronic obstructive pulmonary disease (COPD).

Why it matters: The deal strengthens Merck’s respiratory portfolio ahead of looming revenue loss from Keytruda’s patent expiry and positions Ohtuvayre as a potential blockbuster in a $17B—and growing—COPD market.

Backstory: Merck’s acquisition playbook focuses on mid-sized, high-growth biotech firms in the $10–12B range:

• In 2021, Merck acquired Acceleron for $11.5B, adding Winrevair for pulmonary arterial hypertension, which has since launched and established a strong foothold among lung specialists.

• In 2023, it bought Prometheus for $10.8B, gaining PRA023, a late-stage biologic for inflammatory bowel disease, still progressing through trials but seen as a future blockbuster.

Big picture: With its top-selling cancer immunotherapy Keytruda driving nearly half of Merck’s 2024 revenue ($29.5B), diversifying into chronic and respiratory diseases is key. Merck projects the COPD market will surge to $27B by 2032 and plans to launch 20 new assets, most with blockbuster potential.

Lead asset: Ohtuvayre, approved in August 2024, is the first inhaled COPD drug in over two decades. It works by inhibiting PDE3 and PDE4 enzymes—simultaneously relaxing airways and reducing inflammation—and is already seeing strong uptake, with 25,000 prescriptions in Q1 2025 alone. Merck aims to capitalize on its Winrevair network of physicians to scale Ohtuvayre uptake.

Yes, but: The competition in the COPD space is intensifying: GSK’s Nucala, Amgen/AstraZeneca’s Tezspire, and Regeneron/Sanofi’s Dupixent and itepekimab are all targeting COPD. In addition, the European approval for Ohtuvayre is still pending.