Verona Pharma (VRNA) Surges 0.18% on Merck Acquisition, Eyes $1.63B COPD Market

Verona Pharma (VRNA) climbed 0.18% on Monday, extending its winning streak to seven consecutive days and posting a 0.62% cumulative gain over the past week. The stock hit its highest intraday level since September 2025, with a 0.21% rise during trading, signaling renewed investor confidence in the company’s strategic direction.

The momentum follows Merck & Co.’s $10 billion acquisition of Verona in July 2025, a move aimed at diversifying Merck’s portfolio amid the looming patent expiration of its flagship oncology drug, Keytruda. The deal underscores Merck’s pivot toward respiratory care, with Verona’s Ohtuvayre—a first-in-class dual phosphodiesterase inhibitor for COPD—positioned to offset potential revenue declines from its oncology segment. Analysts project Ohtuvayre could generate $1.63 billion in annual sales by 2030, aligning with the $140 billion global COPD/asthma market growth forecast by 2030.

Investor sentiment remains mixed. Institutional buyers like Velan Capital and Jasper Ridge Partners have increased VRNA holdings, while short interest declined by 39.2% in August 2025. However, insider selling by key executives has raised eyebrows, with the CEO and CFO offloading significant shares during the same period. This activity has fueled speculation about post-acquisition strategic reallocations or reduced confidence in Verona’s standalone potential.

Merck’s financing strategy for the acquisition further highlights its long-term commitment. The company issued investment-grade bonds at yields 1 percentage point above Treasuries to fund the deal, reflecting confidence in Ohtuvayre’s profitability. The COPD market’s resilience—driven by chronic disease management needs and aging demographics—positions the drug as a stable revenue stream for Merck, contrasting with the volatility of oncology markets. With North America accounting for 60% of COPD drug sales in 2024, Merck’s global commercial infrastructure is expected to accelerate Ohtuvayre’s market penetration.