Merck’s potential $3 billion acquisition of EyeBio brings the drugmaker back into ophthalmology

Pictured: Merck Research Laboratories in South San Francisco, California/iStock, hapabapa

On Wednesday, Merck announced it was acquiring privately held biotech EyeBio for a potential $3 billion in a bid to diversify its pipeline and regain its position as a major player in the eye care industry.

Under the terms of the agreement, Merck will pay $1.3 billion upfront and commit $1.7 billion to development, regulatory and commercial purposes. The acquisition was unanimously approved by EyeBio’s Board of Directors. Merck will make the purchase through a subsidiary.

The companies expect to complete the transaction in the third quarter of 2024, pending approval under the Hart-Scott-Rodino Antitrust Improvements Act and other customary closing conditions.

Dean Li, president of Merck Research Laboratories, said in a statement that the EyeBio purchase is part of a “science-based business development strategy to expand and diversify our pipeline.” With this acquisition, Merck will have “promising drug candidates targeting retinal diseases,” Li added.

Wednesday’s buyout target is Restoret. Also known as EYE103, Restoret is an investigational and potentially first-in-class trispecific antibody being developed for the treatment of diabetic macular edema (DME) and neovascular age-related macular degeneration (NVAMD).

The candidate works by activating the Wnt signaling pathway, which the biotech’s website says is disrupted in DME and NVAMD, causing the endothelial cell barrier to weaken and fluid to leak into the retina. Restoret’s mechanism of action helps restore the integrity of ocular endothelial cells and prevent vascular leakage.

Based on early data, Restoret is expected to enter a pivotal Phase IIb/III trial in DME in the second half of 2024, according to the companies.

The acquisition of EyeBio marks Merck’s return to the ophthalmology space after exiting the market in 2014 and selling its assets to Akorn Pharmaceuticals and Santen Pharmaceutical.

BMO Capital Markets, in a note to investors Wednesday, said that while the EyeBio deal was smaller, the company was “encouraged by the progress Merck continues to diversify its revenue base” ahead of losing exclusivity for its blockbuster Keytruda.

The buyout also continues a deal spree for the pharmaceutical company, which bought small biotech startup Abceutics for $208 million in April 2024, gaining access to technology that could help improve the safety of antibody-drug conjugates.

In March 2024, Merck signed a $1 billion contract with Pearl Bio to develop engineered biologics. Based on research conducted by Yale scientists, Pearl Bio technology uses synthetic amino acids – in addition to 20 naturally occurring ones – which could theoretically produce proteins with increased therapeutic activity.

In January 2024, Merck also contributed $680 million to acquire cancer specialist Harpoon Therapeutics and its portfolio of T-cell engaging agents for the treatment of various types of cancer.

Tristan Manalac is a freelance science writer based in Metro Manila, Philippines. Connect with him on LinkedIn or email him at [email protected] or [email protected].