Merck to Acquire Ophthalmology-Focused Biotech Company, EyeBio for $3 Billion

Overview

Merck, known as MSD outside of the United States and Canada, and Eyebiotech Limited (EyeBio), a privately held ophthalmology-focused biotechnology company, announced that the companies have entered into a definitive agreement under which Merck, through a subsidiary, will acquire EyeBio.

Words from President: Merck Research Laboratories

• “We continue to execute on our science-led business development strategy to expand and diversify our pipeline,” said Dr. Dean Y. Li, president, Merck Research Laboratories. 
• “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.”

Terms of the Agreement

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.

Eyebio Pipeline for Preventing Vision Loss

• 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, Restoret (EYE103), is an investigational, potentially first-in-class tetravalent, tri-specific antibody that acts as an agonist of the Wingless-related integration site (Wnt) signalling pathway. 
• Based on positive results from the open-label phase 1b/2a AMARONE study in patients with diabetic macular edema (DME) and neovascular age-related macular degeneration (NVAMD), Restoret 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.

Words from President: EyeBio

• “The EyeBio team has successfully assembled a pipeline of novel candidates with the potential to provide new treatment options for patients with retinal disease,” said Dr. David R. Guyer, chief executive officer and president, EyeBio. 
• “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.”

In addition to augmenting Merck’s pipeline, the acquisition significantly expands the company’s presence in ophthalmology. The EyeBio team and leadership including founders Dr. David Guyer and Dr. Tony Adamis will leverage their experience and world-class expertise as part of Merck to continue their pioneering work to advance the clinical development of Restoret and other ongoing development programmes.

From SV Health Investors

• “Less than three years ago, EyeBio was hatched to translate Dr. David Guyer’s idea for a potential new therapy for retinal diseases into a reality,” said Kate Bingham, EyeBio board chair and managing partner, SV Health Investors. 
• “This agreement reflects the hard work of the talented EyeBio team, led by Dr. Guyer, who through this agreement have placed Restoret on a defined development path to patients.”

Closing of the Proposed Acquisition

• 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.

Advisors for the Transaction

• 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.

Retinal Conditions

• Several retinal conditions are characterized by both inflammation and breakdown of the inner blood-retinal barrier (iBRB) resulting in vascular permeability and leakage into the neighbouring retinal tissue. 
• Vascular leakage is a known risk factor for retinal diseases including diabetic macular edema (DME) and neovascular age-related macular degeneration (NVAMD).

Restoret

• 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). 
• Restoret 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.

Eyebiotech Limited

Eyebiotech Limited (EyeBio) is a clinical-stage, privately held ophthalmology biotechnology company dedicated to developing and delivering a new generation of therapies to protect, restore and improve vision in patients with sight-threatening eye diseases.

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