Merck to acquire EyeBio for upfront payment of $1.3 billion

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Merck and Eyebiotech Limited announced that the companies have entered into a definitive agreement under which Merck, through a subsidiary, will acquire EyeBio.

Dean Y. Li, MD, PhD, president of Merck Research Laboratories, noted in a news release that the company continues to execute its science-led business development strategy to expand and diversify its pipeline.¹

“The EyeBio team, under the leadership of Dr. David Guyer and Dr. Tony Adamis, has a strong track record of developing groundbreaking ophthalmology therapies,” he said in the release. “By combining our strengths, we aim to advance with rigor and speed the development of their promising pipeline of candidates targeting retinal diseases.”

Under the terms of the agreement, Merck, through a subsidiary, will acquire all outstanding shares of EyeBio for up to $3 billion, including an upfront payment of $1.3 billion in cash and a further potential $1.7 billion in developmental, regulatory and commercial milestone payments. The acquisition has been unanimously approved by the EyeBio Board of Directors.¹

According to the news release, EyeBio is developing a pipeline of clinical and preclinical candidates for the prevention and treatment of vision loss associated with retinal vascular leakage, a known risk factor for retinal diseases.

The company’s lead candidate, EYE103 (Restoret), is an investigational, potentially first-in-class tetravalent, tri-specific antibody that acts as an agonist of the Wingless-related integration site (Wnt) signaling pathway.

Based on positive results from the open-label Phase 1b/2a AMARONE study (NCT05919693)in patients with diabetic macular edema (DME) and neovascular age-related macular degeneration (NVAMD), EYE103 is anticipated to advance into a pivotal Phase 2b/3 trial to investigate the treatment of patients with DME in the second half of 2024.

According to the company, EYE103 (Restoret) is an investigational, potentially first-in-class tetravalent, tri-specific Wnt antibody designed to address unmet medical need in patients with retinal diseases, including diabetic macular edema (DME) and neovascular age-related macular degeneration (NVAMD). It is administered as an intravitreal injection seeking to eliminate leakage in retinal vascular diseases by agonizing the Wnt pathway with the goal of restoring and maintaining the blood-retinal barrier. Preclinical evidence indicates that agonizing the Wnt pathway in the retina may reduce vascular leakage.²

The company noted in a news release² that the Week 12 data from AMARONE demonstrated EYE103 was well-tolerated, with no drug-related adverse events, drug-related serious adverse events, or intraocular inflammation reported. Patients with DME (n = 26) received EYE103 as monotherapy, manifesting a mean improvement in best-corrected visual acuity of +11.2 letters and a mean reduction in retinal thickness of -143 µm, as measured by optical coherence tomography (OCT).

Moreover, according to the news release, similar outcomes were observed in patients with NVAMD (n=5), who received EYE103 in combination with aflibercept. The data demonstrated that multiple monthly doses of EYE103, as both monotherapy and in combination with aflibercept, were well-tolerated.

David R. Guyer, MD, president and CEO of EyeBio, said the company 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,” he said in the news release.

In addition to augmenting Merck’s pipeline, the acquisition expands the company’s presence in ophthalmology.

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

Citi acted as financial advisor to Merck in this transaction and Gibson, Dunn & Crutcher LLP as its legal advisors. Centerview Partners LLC acted as financial advisor to EyeBio and Skadden, Arps, Slate, Meagher & Flom LLP as the company’s legal advisors.

Reference:

1. Merck to Acquire EyeBio. Merck.com. Accessed May 31, 2024. https://www.merck.com/news/merck-to-acquire-eyebio/

2. EyeBio Announces Positive Visual, Anatomic and Safety Data from First-in-Human Ph1b/2a AMARONE Trial of Restoret at Macula Society Annual Meeting. www.businesswire.com. Published February 13, 2024. Accessed February 13, 2024. https://www.businesswire.com/news/home/20240212626117/en/EyeBio-Announces-Positive-Visual-Anatomic-and-Safety-Data-from-First-in-Human-Ph1b2a-AMARONE-Trial-of-Restoret-at-Macula-Society-Annual-Meeting