Merck to Acquire Caraway Therapeutics for Close to $610 Mn in a Push for Neurodegenerative Disease Therapies

The agreement includes earnout milestones linked to the development of specific pipeline candidates. Through its MRL Ventures Fund, Merck has been a shareholder in Caraway Therapeutics since 2018.

Merck, also known as MSD outside of the United States and Canada, is set to acquire Caraway Therapeutics, Inc through a definitive agreement in a move aimed at bolstering its portfolio in the neurodegenerative disease space. The deal, valued at up to $610 million, includes an undisclosed upfront payment and contingent milestone payments.

Merck plans to expense the upfront payment in the fourth quarter of 2023.

Caraway Therapeutics, a preclinical biopharmaceutical company, specialises in developing innovative treatments for genetically defined neurodegenerative and rare diseases. The company has established a pipeline of novel, small-molecule therapeutics targeting these conditions.

George Addona, senior vice president of Discovery, Preclinical Development, and Translational Medicine at Merck Research Laboratories, commenting on the development, said, "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."

Lysosomal function modulation is a cutting-edge scientific approach that activates cellular recycling processes to clear toxic materials and defective cellular components, holding promise for altering the progression of neurodegenerative diseases.

"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. This acquisition leverages Merck's industry-leading research and development capabilities to help further advance our discovery and preclinical programs," said Martin D Williams, chief executive officer of Caraway Therapeutics.

The agreement includes earnout milestones linked to the development of specific pipeline candidates. Through its MRL Ventures Fund, Merck has been a shareholder in Caraway Therapeutics since 2018.

Merck aims to leverage its research and development capabilities to advance Caraway's discovery and preclinical programs, with a focus on developing disease-modifying therapies. The acquisition aligns with Merck's commitment to addressing the unmet needs in neurodegenerative diseases.

The Board of Directors of Caraway Therapeutics has approved the transaction, marking an important milestone in the company's journey to bring novel treatments to patients facing neurodegenerative and rare diseases.

Merck's acquisition of Caraway Therapeutics reflects the pharmaceutical giant's strategic pursuit of innovative solutions in the neuroscience space. As the companies join forces, the hope is to combine expertise and resources to accelerate the development of potential therapies for conditions with significant unmet medical needs, providing hope for patients and advancing the frontier of neurodegenerative disease research.

Merck Life Science was incorporated in 1986 as a joint venture with Millipore Corporation, USA and became a 100% subsidiary of Millipore Corporation in 2009. Millipore was acquired by Merck Chemicals in 2010. Merck Life Sciences offers researchers advanced tools, services, and expertise worldwide. They offer one of the broadest portfolios in the industry for scientists, and their innovations touch individuals globally.

In September this year, Merck entered two strategic collaborations to strengthen AI-driven drug discovery with BenevolentAI, London, UK, and Exscientia, Oxford, UK.

These partnerships sought to utilise AI-driven design and discovery capabilities, further advancing Merck's research efforts. Additionally, it is expected to generate multiple novel clinical development drug candidates with first-in-class potential, particularly in critical therapeutic areas of oncology, neurology and immunology.