Merck (NYSE: MRK), also known as MSD outside of the United States and Canada, has announced a definitive agreement to acquire EyeBio Limited, a prominent ophthalmology-focused biotechnology company, in a deal worth up to $3 billion. This acquisition includes an upfront payment of $1.3 billion in cash, with additional developmental, regulatory, and commercial milestone payments potentially reaching $1.7 billion.

Strategic Acquisition to Enhance Merck’s Ophthalmology Focus

The agreement, unanimously approved by the EyeBio Board of Directors, sees Merck acquiring all outstanding shares of EyeBio through a subsidiary, significantly bolstering its ophthalmology pipeline. This move is part of Merck’s broader strategy to diversify and enhance its portfolio with innovative therapies.

Dr. Dean Y. Li, president of Merck Research Laboratories, expressed enthusiasm about the acquisition: “We continue to execute on our science-led business development strategy to expand and diversify our pipeline. The EyeBio team, under the leadership of Dr. David Guyer and Dr. Tony Adamis, has a strong track record of developing groundbreaking ophthalmology therapies. By combining our strengths, we aim to advance with rigor and speed the development of their promising pipeline of candidates targeting retinal diseases.”

EyeBio’s Promising Therapeutic Innovations

EyeBio is currently advancing a pipeline of clinical and preclinical candidates designed to prevent and treat vision loss associated with retinal vascular leakage, a significant risk factor for various retinal diseases. The company’s flagship candidate, Restoret (EYE103), a potentially first-in-class tetravalent, tri-specific antibody, has shown promising results in early-phase trials. Following positive outcomes from the AMARONE study in patients with diabetic macular edema (DME) and neovascular age-related macular degeneration (NVAMD), Restoret is set to progress into a pivotal Phase 2b/3 trial in the latter half of 2024.

Dr. David R. Guyer, CEO and president of EyeBio, commented on the merger’s potential: “The EyeBio team has successfully assembled a pipeline of novel candidates with the potential to provide new treatment options for patients with retinal disease. As a subsidiary of Merck, EyeBio will be positioned to tap into the resources and infrastructure needed to support the clinical, regulatory and commercial development of these candidates and help bring them to patients worldwide.”

Transaction Details and Future Prospects

The acquisition is slated to close in the third quarter of 2024, subject to approval under the Hart-Scott-Rodino Antitrust Improvements Act and other customary conditions. The transaction will be accounted for as an asset acquisition, with Merck expecting to record a charge of approximately $1.3 billion, or about $0.50 per share, in non-GAAP results for the quarter in which the transaction closes.

This acquisition not only enhances Merck’s capabilities in ophthalmology but also reaffirms its commitment to investing in cutting-edge medical technologies and treatments that offer significant benefits to patients worldwide.

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