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Posted On: 08/08/2025 6:49:11 AM
Post# of 155687
This is what it looks like behind the wall.
Merck pulled off its $10 billion buyout of Verona Pharma last month with little of the wheeling and dealing that typically accompanies a big-money acquisition in the biopharma industry.
In fact, Merck was the only company that made an offer to Verona, according to a Securities and Exchange Commission filing by the British company on Monday, which detailed its negotiations leading up to the transaction.
The lack of interest came despite Verona scoring a landmark FDA approval a year ago for Ohtuvayre, the first new medicine for chronic obstructive pulmonary disorder (COPD) in more than a decade.
The treatment, which is administered twice daily with a hand-held nebulizer, earned an advantageous nod as the U.S. regulator signed off on it to be used as a monotherapy or in combination with other COPD maintenance drugs. It has drawn annual peak sales projections of up to $5 billion.
Verona’s efforts to attract suitors began in early 2023, as it and New York City investment advisory firm Centerview Partners conducted outreach with drugmakers who might be interested in a partnership or an outright acquisition, according to the filing.
Those attempts drew interest from just one unidentified company (not Merck), which met with Verona in July 2023 and signed a nondisclosure agreement. But the company never made Verona an offer.
In December 2023, Verona and Centerview agreed to begin another round of outreach, which attracted no substantial interest for more than a year. Then, in February of this year, Merck told Verona that a nondisclosure agreement—which they had signed in 2020—had expired. The companies signed a new one, without a “standstill provision,” which allowed them to freely discuss potential business development opportunities.
Over the next few months, Verona met several times with Merck’s Human Health International chief Joseph Romanelli. Among the topics they discussed were Merck owning rights to Ohtuvayre either inside or outside of the U.S.
Similarly, in early June, more than one third party, according to the filing, sent Verona a nonbinding term sheet concerning a potential collaboration on Ohtuvayre. A nonbinding term sheet allows a company to explore a potential transaction without making an offer.
Related
Merck joins Big Pharma cost-cutting crowd, revealing plan to save $3B annually by 2027
Then, on July 3, Merck proposed to buy out Verona for $104 per share and placed a five-day deadline on the offer. Later that day, Verona’s share price closed at $91.53.
Also that day, after a meeting with its board, Verona made a counteroffer of $112 per share, prompting Merck to respond with a $107 per-share offer. On the deadline, July 8, the companies agreed to the deal, which was a 23% markup on Verona’s price at market close on July 8 and a 39% premium on the company’s 60-day volume-weighted average price.
The transaction is the second-largest in the biopharma industry this year after Johnson & Johnson’s $14.6 billion buyout of Intra-Cellular Therapies. A regulatory filing after that deal indicated that it happened over the course of just one month and that J&J placed the lone bid on the company, which has schizophrenia and bipolar disorder drug Caplyta in its portfolio, along with another highly touted antipsychotic candidate.
Related
Merck pulled off its $10 billion buyout of Verona Pharma last month with little of the wheeling and dealing that typically accompanies a big-money acquisition in the biopharma industry.
In fact, Merck was the only company that made an offer to Verona, according to a Securities and Exchange Commission filing by the British company on Monday, which detailed its negotiations leading up to the transaction.
The lack of interest came despite Verona scoring a landmark FDA approval a year ago for Ohtuvayre, the first new medicine for chronic obstructive pulmonary disorder (COPD) in more than a decade.
The treatment, which is administered twice daily with a hand-held nebulizer, earned an advantageous nod as the U.S. regulator signed off on it to be used as a monotherapy or in combination with other COPD maintenance drugs. It has drawn annual peak sales projections of up to $5 billion.
Verona’s efforts to attract suitors began in early 2023, as it and New York City investment advisory firm Centerview Partners conducted outreach with drugmakers who might be interested in a partnership or an outright acquisition, according to the filing.
Those attempts drew interest from just one unidentified company (not Merck), which met with Verona in July 2023 and signed a nondisclosure agreement. But the company never made Verona an offer.
In December 2023, Verona and Centerview agreed to begin another round of outreach, which attracted no substantial interest for more than a year. Then, in February of this year, Merck told Verona that a nondisclosure agreement—which they had signed in 2020—had expired. The companies signed a new one, without a “standstill provision,” which allowed them to freely discuss potential business development opportunities.
Over the next few months, Verona met several times with Merck’s Human Health International chief Joseph Romanelli. Among the topics they discussed were Merck owning rights to Ohtuvayre either inside or outside of the U.S.
Similarly, in early June, more than one third party, according to the filing, sent Verona a nonbinding term sheet concerning a potential collaboration on Ohtuvayre. A nonbinding term sheet allows a company to explore a potential transaction without making an offer.
Related
Merck joins Big Pharma cost-cutting crowd, revealing plan to save $3B annually by 2027
Then, on July 3, Merck proposed to buy out Verona for $104 per share and placed a five-day deadline on the offer. Later that day, Verona’s share price closed at $91.53.
Also that day, after a meeting with its board, Verona made a counteroffer of $112 per share, prompting Merck to respond with a $107 per-share offer. On the deadline, July 8, the companies agreed to the deal, which was a 23% markup on Verona’s price at market close on July 8 and a 39% premium on the company’s 60-day volume-weighted average price.
The transaction is the second-largest in the biopharma industry this year after Johnson & Johnson’s $14.6 billion buyout of Intra-Cellular Therapies. A regulatory filing after that deal indicated that it happened over the course of just one month and that J&J placed the lone bid on the company, which has schizophrenia and bipolar disorder drug Caplyta in its portfolio, along with another highly touted antipsychotic candidate.
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