Merck Drops Up to $610M on Neuro Disease-Focused Caraway Therapeutics
21 Nov 2023
AcquisitionVaccineImmunotherapy
Pictured: Merck Canada head office/iStock, JHVEPhoto
Merck bumped up its position from shareholder to acquirer in a move to scoop up neurodegenerative disease biotech Caraway Therapeutics for up to $610 million, the pharma giant announced Tuesday.
Previously invested in Caraway since 2018 through its MRL Ventures Fund, Merck will now acquire all outstanding shares of the company. Merck is buying out the neuro-focused biotech through a subsidiary with an undisclosed upfront payment, which will be expensed in the fourth quarter of 2023, and contingent milestone payments.
Caraway’s platform focuses on activating the cell’s recycling center—the lysosome—to rid the body of toxic materials and clear defective cellular components to treat genetically defined neurodegenerative and rare diseases.
Its pipeline includes three small molecules in preclinical development for Parkinson’s disease, amyotrophic lateral sclerosis (ALS) and lysosomal storage diseases. Caraway’s Parkinson’s-ALS candidate, TMEM175, is being developed as part of a collaboration with AbbVie. The venture capital arms of Amgen and Eisai are also invested in Caraway.
The deal is a modest one in comparison to Merck’s other cash drops this year. In October 2023, the pharma signed a global pact with Daiichi Sankyo to advance three of its DXd-based antibody-drug conjugates for solid tumor indications. Merck made an upfront payment of $4 billion to the Japanese biopharma with an additional $1.5 billion in tranches over the next two years. Daiichi Sankyo is also eligible for up to $16.5 billion for sales milestones.
In June 2023, Merck acquired immune-focused Prometheus Biosciences for around $10.8 billion. The deal added five clinical and pre-clinical candidates to its pipeline for inflammatory bowel and immune-mediated diseases.
The company was among several pharma giants to post positive third-quarter financial results, raising its full-year sales forecast to between $59.7 billion and $60.2 billion for 2023, led by strong sales of Merck’s blockbuster cancer drug Keytruda, HPV vaccine Gardasil and COVID-19 antiviral drug Lagevrio.
Kate Goodwin is a freelance life science writer based in Des Moines, Iowa. She can be reached at kate.goodwin@biospace.com and on LinkedIn.
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