Group 1 - Merck (MRK.US) announced the acquisition of Verona Pharma (VRNA.US) for approximately $10 billion to enhance its respiratory treatment portfolio and reduce reliance on its key cancer drug, Keytruda [1] - Keytruda generated nearly $30 billion in revenue last year, with its patent set to expire in 2028, prompting Merck to adjust its product lineup [1] - Since 2021, Merck has nearly doubled its late-stage development pipeline, pursuing both internal R&D and acquisitions, including a $11.5 billion acquisition of Acceleron in 2021 for pulmonary hypertension drug Winrevair [1] Group 2 - The acquisition of Verona Pharma provides Merck with Ohtuvayre, a drug approved by the FDA for chronic obstructive pulmonary disease (COPD), which has generated $42.3 million in sales in 2024, with analysts projecting annual sales to exceed $3 billion [1] - Merck will acquire Verona Pharma at $107 per ADS, representing a 23% premium over the latter's closing price on Tuesday [1] - Analysts express optimism about Ohtuvayre as a complementary therapy, while also emphasizing the need for Merck to ensure stable revenue transition post-Keytruda patent expiration [2]