Merck’s $10 Billion Verona Buyout: Smart Bet or Scramble Before the Keytruda Cliff?

Merck’s $10 billion acquisition of Verona Pharma marks another pivotal move in its broader strategy to offset the looming revenue hit from Keytruda’s patent expiration in late 2028. The company is navigating an era of transformation, with nearly 20 launches planned over the next few years, including key assets in cardiometabolic, immunology, HIV, and oncology. While Keytruda generated $29.5 billion in 2024 revenue and remains Merck’s crown jewel, its approaching loss of exclusivity is expected to erode annual revenues by $18 billion, prompting Merck to aggressively expand and diversify its pipeline. The Verona acquisition, announced shortly after FDA approval of Merck’s RSV vaccine (clesrovimab) and strong Phase III readouts for its oral PCSK9 inhibitor (enlicitide), signals a focus on immediate impact assets. Verona’s Ohtuvayre—recently approved for COPD and projected to reach peak sales of $4 billion—adds near-term commercial value, but analysts remain divided on whether it can truly cushion the Keytruda cliff.