💊 Acquisition of Verona Pharma for 10 billion USD!
Pharmaceutical giant Merck $MRK is expanding its portfolio as it announced the acquisition of Verona Pharma $VRNA, a British company specializing in the treatment of chronic lung disease (COPD). The value of the acquisition is expected to reach approximately $10 billion. This is the company's largest transaction since 2023 and a clear response to the impending end of patent protection for its flagship product Keytruda, a cancer drug that generated over $30 billion in sales last year .

Merck is offering $107 per Verona share , which is 20% premium to Tuesday's closing price.

Verona Pharma has received marketing approval for its drug Ohtuvayre to market in U.S.. This drug is intended for patients with COPDthat almost all COPD patients suffer from 16 million Americansů.

This single product was created 96 %of Verona's sales in Q1 2025, and analysts estimate it could generate up to $4 billion annually by 2035.

🧩The purpose of the acquisition
Merck needs to diversify its business, as Keytruda's patent expires by 2028 and with it the exclusivity for one of the most profitable drugs on the market. Thus, buyouts of smaller biotech companies with potential for new products are a logical strategy.

This year, already Merck:
Signed a $2 billion licensing deal with China's Hengrui Pharma for a heart disease drug.
Negotiated a takeover of MoonLake Immunotherapeutics.
And now he's taking over Verona as a key growth catalyst for the coming decade.

🏢 Merck: $204 billion market cap.

🧬 Verona Pharma: current capitalization $9 billion, $10 billion acquisition.

💰 Expected revenue from Ohtuvayre by 2035: USD 4 billion per year

Will Merck be able to diversify its portfolio sufficiently before the oncology market starts to change significantly? What do you think of the company $MRK?