Companies agree deal worth up to $610m for preclinical pipeline targeting genetically defined neurodegenerative diseases.
Preclinical biopharma Caraway Therapeutics is to be acquired by pharma giant Merck in a deal worth up to $610 million. The companies revealed that a definitive agreement has been reached, with a Merck subsidiary acquiring Caraway for an undisclosed upfront payment and contingent milestone payments.
With a focus on treating genetically defined neurodegenerative and rare diseases, Caraway is developing small-molecule therapeutics designed to activate cellular recycling processes, thereby clearing toxic materials and defective cellular components by modulating lysosomal function.
Caraway’s product engine allows it to gain proprietary insights into lysosomal function and small molecule ion channel modulation. The company has built a pipeline of precision therapeutic candidates with disease-modifying potential in Parkinson’s, ALS and more.
Under the terms of the acquisition, Merck, through its subsidiary, will acquire all outstanding shares of Caraway. Earnout milestones are attached to the development of specific pipeline candidates. The transaction has received approval from Caraway Therapeutics’ Board of Directors.
“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,” said George Addona from Merck Research Laboratories. “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.”
Merck has been a shareholder in Caraway Therapeutics since 2018 through its MRL Ventures Fund. Other investors in Caraway include SV Health Investors and its Dementia Discovery Fund, AbbVie Ventures, MRL Ventures Fund, Amgen Ventures and Eisai Innovation.
“This important milestone is a testament to the hard work and dedication of the Caraway team and our mission to develop therapeutics with the potential to alter the progression of devasting neurodegenerative diseases and help patients,” said Martin D. Williams, CEO of Caraway Therapeutics. “This acquisition leverages Merck’s industry-leading research and development capabilities to help further advance our discovery and preclinical programs.”