Merck spends $10 billion for Verona, gaining access to its COPD medication

Pharmaceutical giant Merck is buying Verona Pharma, a company that focuses on respiratory diseases, in an approximately $10 billion deal.

The deal gives Merck access to Verona Pharma's new chronic obstructive pulmonary disease medication Ohtuvayre. U.S. regulators approved the inhaled medication more than a year ago to treat chronic obstructive pulmonary disease, or COPD, in adults.

“Ohtuvayre complements and expands our pipeline and portfolio of treatments for cardiopulmonary diseases while delivering near- and long-term growth as well as value for shareholders," Merck & Co. Inc. Chairman and CEO Robert Davis said in a statement.

Verona CEO David Zaccardelli added that Merck's commercial reach can help Ohtuvayre reach more COPD patients.

COPD is a progressive disease that can cause shortness of breath, coughing and other problems that make it hard to breathe, according to the National Institutes of Health. It is caused by damage to the airways or other parts of the lung and affects more than 14 million adults in the United States.

Ohtuvayre was launched last August as the first commercial product for London-based Verona Pharma. The drug also is being studied as a possible treatment for another chronic respiratory problem that gets worse over time: non-cystic fibrosis bronchiectasis.

Merck plans to pay $107 for each Verona Pharma American Depository Share, which represents eight of the company's ordinary shares.

The deal announced Wednesday has been approved by the boards of both companies and is expected to close in the fourth quarter. But it still needs Verona Pharma shareholder approval and sanction by the High Court of Justice of England and Wales.

Shares of Rahway, New Jersey-based Merck climbed 25 cents to $81.63 before markets opened Wednesday.