Merck & Co – known as MSD outside the US and Canada – has entered into a definitive agreement to acquire Caraway Therapeutics, with the deal worth up to $610m.
The acquisition gives Merck access to the preclinical biopharma’s pipeline of small-molecule therapeutics for genetically defined neurodegenerative and rare diseases.
Mutations that impair cellular clearance pathways are associated with multiple neurodegenerative and rare diseases, including neurodegenerative disorders characterised by cognitive dysfunction, according to Caraway.
The company focuses on discovering small molecules that activate cellular recycling processes to clear toxic materials and defective cellular components by modulating lysosomal function.
George Addona, senior vice president, discovery, preclinical development and translational medicine at Merck Research Laboratories, said: “Caraway’s multidisciplinary approach has yielded important progress in evaluating novel mechanisms of modulation of lysosomal function with potential for the treatment of progressive neurodegenerative diseases.
“We look forward to applying our expertise to build upon this work with the goal of developing much needed disease-modifying therapies for these conditions.”
Though exact financial details of the transaction have not been disclosed, Merck will make an upfront payment and contingent milestone payments to Caraway.
Martin Williams, chief executive officer of Caraway Therapeutics, described the buyout as a “testament to the hard work and dedication of the Caraway team and [its] mission to develop therapeutics with the potential to alter the progression of devastating neurodegenerative diseases and help patients”.
He continued: “This acquisition leverages Merck’s industry-leading research and development capabilities to help further advance our discovery and preclinical programmes.”
The acquisition is just one of a series of deals that Merck has made this year. Last month, the company agreed to pay Daiichi Sankyo $5.5bn to jointly develop three of its antibody-drug conjugate candidates, with the transaction potentially worth up to $22bn.
Merck also announced in April that it would be acquiring Prometheus Biosciences for around $10.8bn, marking a significant boost to its immunology pipeline. The deal, which was completed in June, granted Merck access to Prometheus’ lead candidate being developed for ulcerative colitis, Crohn’s disease and other autoimmune conditions.