Merck and Eyebiotech Limited entered into a definitive agreement under which 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, Merck stated in a press release.

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

EyeBio is developing a pipeline of clinical and preclinical candidates for the prevention and treatment of vision loss associated with retinal vascular leakage. The company’s lead candidate, Restoret (EYE103), an investigational, potentially first-in-class tetravalent, tri-specific antibody, acts as an agonist of the Wingless-related integration site signaling pathway. Based on positive results from the open-label Phase 1b/2a AMARONE study in patients with diabetic macular edema (DME) and neovascular AMD, 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.

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.