Merck has reached a $10 billion deal to amass Verona Pharma, a biotech whose first-in-class drug is already commercialized in a single prevalent lung dysfunction and is exhibiting promise in different respiratory circumstances. The multi-blockbuster potential of this drug is necessary to Merck, which is scouting for property to make up for the steep drop in income coming quickly when its high general product tumbles over the patent cliff.
London-based Verona has American depositary shares that commerce on the Nasdaq. In accordance with acquisition phrases introduced Wednesday, Merck can pay $107 for every of these shares, which represents a greater than 23% premium to Verona’s closing inventory value on Tuesday. When Verona went public in 2017, it priced shares at $13.50 apiece.
The primary 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 drugs’s fundamental pharmaceutical ingredient, ensifentrine, is a small molecule with a twin mechanism of motion. Along with blocking PDE4 enzymes to cease irritation, it additionally blocks PDE3 enzymes to widen the airway. This twin strategy might have functions in different respiratory issues. Mid-stage research are underway in bronchial asthma, cystic fibrosis, and non-cystic fibrosis bronchiectasis.
The bronchiectasis indication is a very promising one, as this power lung dysfunction is rising in prevalence and at present has no FDA-approved therapies — although that would change quickly. Insmed drug brensocatib is at present beneath FDA evaluate in non-CF bronchiectasis. An FDA determination for the oral small molecule is anticipated by Aug. 12. Business observers challenge the Insmed drug might turn into a blockbuster vendor. Ohtuvayre offers Merck a approach to doubtlessly get a chunk of the bronchiectasis market.
When Ohtuvayre was accredited in June 2024, it was the primary new inhaled COPD drug with a novel mechanism of motion in 20 years. Since then, Sanofi’s Dupixent and Nucala from GSK — each biologic medication administered by injection — have expanded their labels specifically to include treatment of COPD pushed by sort 2 irritation, a new indication for both blockbuster products.
Ohtuvayre can also be projected to turn into a blockbuster vendor. Market uptake for the drug in COPD has been speedy. For the primary quarter of this yr, Verona reported about 25,000 Ohtuvayre prescriptions stuffed for COPD and a 50% improve in prescribers of the medicine in comparison with the fourth quarter of 2024. Income within the first quarter was $71.3 million, up from $36.6 million within the prior quarter.
Verona CEO David Zaccardelli informed MedCity Information in an interview final yr that he anticipated his firm’s medical and regulatory validation of PDE3 and PDE4 inhibition with a single molecule would lead different corporations to pursue medication that work this manner. He added that Verona was dedicated to commercializing Ohtuvayre within the U.S., however would search companions to develop and commercialize it in different markets. Up to now, the one accomplice is Shanghai-based Nuance Pharma, which secured rights to the small molecule in Larger China in 2021. Within the Merck announcement Wednesday, Zaccardelli stated the pharma big’s business footprint and medical capabilities will allow Ohtuvayre to achieve extra COPD sufferers.
Merck’s high general product is the most cancers immunotherapy Keytruda, which accounted for $29.4 billion in income final yr, a greater than 17% improve over gross sales within the prior yr. However Keytruda’s patent expires in 2028, which places the pharmaceutical big within the place of discovering commercialized property or medication in late-stage improvement with the potential to fill the approaching income hole.
In an investor presentation, Merck stated Ohtuvayre represents a multibillion-dollar business alternative into the mid-2030s. The pharma big framed the Verona acquisition as complementary to its cardio-pulmonary portfolio, which is at present headlined by Winrevair, a drug that received FDA approval last year for treating pulmonary arterial hypertension. Winrevair got here from the $11.5 billion acquisition of Acceleron Pharma in 2021. Merck’s older cardiovascular medication went to Organon when that unit spun out of the pharma giant earlier that yr. Winrevair now stands as the highest Merck cardio product, accounting for $419 million in 2024 gross sales. This drug can also be projected to turn into a blockbuster vendor.
“Ohtuvayre enhances and expands our pipeline and portfolio of remedies for cardio-pulmonary illnesses whereas delivering near- and long-term progress in addition to worth for shareholders,” Merck CEO Robert Davis stated in a ready assertion. “This novel, first-in-class remedy addresses an necessary unmet want for COPD sufferers persistently symptomatic primarily based on its distinctive mixture of bronchodilatory and non-steroidal anti-inflammatory results.”
Merck’s acquisition of Verona has been accredited by the boards of administrators of each corporations. The deal nonetheless wants Verona shareholder and regulatory approvals. The businesses count on to shut transaction within the fourth quarter of this yr.
Picture: Christopher Occhicone/Bloomberg, by way of Getty Photos
