Watching Merck drop $10 billion on Verona Pharma (+20%), is like walking in on your boss blackout-bidding at a charity auction, except instead of a weekend in Napa, it’s a British inhaler startup with one (count ‘em… one) commercial product. Congratulations to all the Verona bagholders who just got airdropped generational wealth by accident. If your morning started with the taste of expired protein bars and regret, at least you didn’t wake up at Merck’s M&A department with the realization you just paid Ferrari money for a magic asthma stick.
(Source: Giphy)
In short, Merck is shelling out $107 per share, which is…*checks notes*... 23% higher than yesterday’s close. To be fair, other than the FDA giving this thing the official blessing last June, Verona’s Ohtuvayre inhaler for COPD has racked up $71M so far in 2025. However, analysts estimate that peak Ohtuvayre sales hit $3.4B. Now you can do what you want with that information, but the last time anyone believed a pharma “peak sales” slide, Theranos still had a website. If you can squint at these numbers and not immediately develop COPD from all the smoke, you might have a future in investor relations.
(Source: Yahoo Finance)
But alas, Merck didn’t just buy an inhaler… they bought the right to pretend their revenue won’t crater when Keytruda falls off a patent cliff. See, Keytruda is not “a” blockbuster, it’s the blockbuster. Last year it hauled in almost $25 billion, but the bigly problem is: Keytruda starts hitting its patent expiration in 2028, and when that legal wall comes down, so does the revenue… fast. Investors get hives every time someone even whispers “LOE” (loss of exclusivity). Now is a hopeful “peak” of $3.4 billion enough to replace Keytruda’s entire revenue waterfall? Not even close. But it’s a start, and Merck needs a bunch of these “starts” to survive the coming earnings drought without getting laughed off the NYSE.
(Source: BioSpace)
For more context, Merck’s respiratory portfolio is now a greatest hits collection built entirely from drugs it bought off the metaphorical pharma Craigslist. Exhibit A: they just got CDC approval for their RSV antibody Enflonsia. Additionally, Merck's previous shopping sprees include spending $10.8B on Prometheus Biosciences and $11B on Acceleron. So it’s obvious they're willing to open their legs wallets to ensure they aren’t taken behind the shed and shot once 2028 rolls around. Which again is why Verona is specifically on the menu.
Now, if you're reading this at work with one tab open for your brokerage and one to Google “what is COPD.” Here’s why this may be a big deal: COPD is a chronic, aging-population cash machine. Not sexy, but sticky. The market for inhalers is huge, patient churn is low, and insurance companies basically have to pay up because it’s cheaper than ER trips when grandpa can’t breathe. What’s more is that Verona is also pushing Ohtuvayre into new indications (non-cystic fibrosis bronchiectasis, if you’re into rare lung trivia) because that’s how pharma multiplies revenue from a single science project. Meaning, if Merck can squeeze more use-cases out of this inhaler, that $3.4B “peak sales” figure starts to look less imaginary.
(Source: Giphy)
Of course, only time will tell if that happens or not, but it’s clear Merck’s burning cash to outrun biopharma mortality, while Verona gets the golden ticket with a mooning stock this Wednesday. For now though, keep your eyes on this story as more details on the acquisition come out and place your bets accordingly. Until next time, friends…
At the time of publishing, Stocks.News holds positions in Merck & Co. as mentioned in the article.
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