Merck to Buy Verona for $10 Billion as Patent Cliff Looms

Merck & Co. agreed to buy respiratory drugmaker Verona Pharma Plc for around $10 billion as part of its ongoing search for ways to fill the Keytruda-sized hole that will emerge over the next few years.

Merck has been shopping for deals in anticipation of patent losses that are expected to erode its sales by $18 billion over the next five years. The New Jersey-based drugmaker agreed to pay $107 per American depositary receipt for Verona, a 23% premium to the company’s close on Tuesday. It’s Merck’s third-biggest deal in decades, according to data compiled by Bloomberg.