Merck & Co. Inc. ( MRK ) agreed on Wednesday to acquire Verona Pharma plc ( VRNA ) for $107 per American Depository Share (ADS) for a total transaction value of approximately $10 billion. Each ADS represents eight ordinary shares of Verona Pharma ( VRNA ).

Through the acquisition of this respiratory disease-focused company, Merck ( MRK ) will add Ohtuvayre (ensifentrine), a first-in-class, selective dual inhibitor of phosphodiesterase 3 and 4 (PDE3 and PDE4), to its cardiovascular and pulmonary pipeline and portfolio.

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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 COPD in more than 20 years, combining bronchodilator and non-steroidal anti-inflammatory effects.

Ohtuvayre is also being evaluated in clinical trials for non-cystic fibrosis bronchiectasis.

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.

The Financial Times, which first reported the possible takeover, added that the deal would be Merck's ( MRK ) biggest since it bought Prometheus Biosciences for $10.8 billion in 2023.

It reflects a growing trend of big drug companies acquiring biotech firms that already have approved, revenue-generating products, as they seek to replace revenue from major drugs losing patent protection.

The FT report states that Merck's ( MRK ) cancer treatment Keytruda, the world's top-selling drug with nearly $30 billion in annual revenue, is set to come off patent and face U.S. government price-setting rules as early as 2028.

Since Rob Davis became Merck's ( MRK ) CEO in April 2021, the company has been one of the most active in the pharmaceutical industry in terms of acquisitions and licensing, with the highest deal count and spending. However, investors have been pushing for even more deals in recent months to help offset the expected decline in sales once Keytruda loses patent protection.

The FT report highlighted that Davis was seeking deals worth between $1 billion and $15 billion, or even more, if the opportunity was right.

Earlier this year, Merck ( MRK ) signed a licensing agreement worth up to $2.2 billion with China’s Jiangsu Hengrui Pharmaceuticals for the global rights to a heart disease drug.

According to a July media report, AstraZeneca Plc ( AZN ) was reportedly in talks with Summit Therapeutics Inc. ( SMMT ) about a partnership worth up to $15 billion.

Price Action: VRNA stock rose 20.7% to $104.83. MRK stock was up 0.50% at $81.78 during the premarket session at the last check on Wednesday.

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