Merck will buy UK-based Verona Pharma for about $10 billion, the companies said Wednesday, strengthening the U.S. firm's respiratory treatment portfolio in a bid to diversify its revenue source beyond its blockbuster cancer drug.

Merck has been leaning on its aging cancer immunotherapy Keytruda, the world's top-selling prescription medicine, which generated nearly $30 billion in sales in 2024, but faces patent expiries starting in 2028.

In response, the company has ramped up deal-making to broaden its revenue base. The latest deal is Merck's largest since its $10.8 billion buyout of Prometheus Biosciences in 2023.

It builds on the company's portfolio of chronic lung disease treatments, including recently approved Winrevair and Enflonsia.

Merck will pay $107 per American depository share for London-based Verona, a premium of 23% to Verona's last closing price on the Nasdaq. Verona's U.S.-listed shares jumped 20% in premarket trading.

Verona, which is also listed in Frankfurt, rose into prominence with the approval of its inhalable, non-steroid treatment Ohtuvayre for patients with chronic obstructive pulmonary disease, also known as "smoker's lung," a common lung disease affecting nearly 16 million Americans.

Ohtuvayre was approved last year and brought in annual sales of $42.3 million. Jefferies analysts expect the drug to have peak annual sales of more than $3 billion.

The Financial Times first reported that Merck was nearing a deal to acquire Verona. Last month, FT reported that Merck held talks to buy Swiss biotech MoonLake Immunotherapeutics for more than $3 billion.