Verona Pharma: A Transatlantic Success Story in the Biotech Landscape

This time, don’t let the name mislead you. Because this Verona is on the British Isles and has no ancient arena for operas. But the story could easily serve as a modern version of a wedding drama – with a happy end included. Founded in 2005 and headquartered in London, Verona Pharma has emerged as a standout case of biotech perseverance and innovation, culminating in the US approval of Ohtuvayre, a first-in-class therapy for chronic obstructive pulmonary disease (COPD). Analysts estimate the drug’s peak annual sales could reach nearly US$4 billion by the mid-2030s, making it a strong asset for the buyer US-Merck and Merck’s respiratory pipeline.

Yet beyond its therapeutic success, Verona’s journey reveals an alternative path through the notoriously capital-intensive and high-risk world of biotech. Unlike the dominant venture capital-backed models in hubs like Boston, the Bay Area or some places in Asia, Verona Pharma largely bypassed early institutional investment. Instead, it relied on microcap public placements on London’s AIM exchange, avoiding the typical Series A/B rounds. With just around US$100 million in total equity raised prior to IPO in 2017, the company ultimately scaled to a US$10 billion valuation—delivering an extraordinary 100x return on early capital.

This discipline extended to its scientific strategy. Where others abandoned the PDE3/4 inhibitor class due to toxicity concerns, Verona re-engineered the concept via inhaled delivery, achieving local efficacy with reduced systemic exposure. Ohtuvayre specifically targets patients who remain symptomatic despite dual bronchodilation—offering a clearly defined and underserved indication in a field where innovation had stagnated.

For Merck, the deal represents its largest acquisition since buying Prometheus Biosciences in 2023. It comes at a pivotal moment in the famous challenge of a patent cliff where the sword of Damocles is hanging over the big pharma. That´s because Keytruda—responsible for nearly $30 billion in annual revenue—faces patent expiry and pricing pressures from 2028 onward. By acquiring a company with an approved product and pipeline potential in respiratory disease, Merck aims to bridge its future revenue gap while deepening its footprint in pulmonology.

Is there an US rush to European biotechs? And is another European biotech script possible?

Verona’s story is also a signal of increasing US interest in European biotech. The sharp increase in valuation—from a US$1 billion market cap shortly before FDA approval to a US$10 billion buyout within just over a year—suggests that international investors are watching more closely. Other examples such as Belgium’s argenx, Denmark’s Genmab (both also cooperating to even double awarness and interest from others), and UK-based Orchard Therapeutics (recently acquired by Kyowa Kirin) reflect this trend.

While the broader European ecosystem still faces challenges—fragmented markets, limited late-stage capital, and fewer specialist investors—Verona Pharma offers a compelling counter-narrative: that scientific rigor, strategic focus, and alternative financing routes can still lead to transformative outcomes. As the transatlantic biotech corridor becomes more active, Verona may prove less an anomaly and more a model—especially for European companies seeking scale and global relevance without conforming to the classic Silicon Valley script.