US drugmaker Merck has agreed to pay KalVista Pharmaceuticals more than $750 million to gain the rights to KVD001, an investigational treatment for diabetic macular edema (DME), as well as future oral DME compounds based upon plasma kallikrein inhibition.

“KalVista’s CEO, Andrew Crockett, said: “Plasma kallikrein inhibition is a novel approach to the treatment of DME that we believe may offer benefit to a significant number of patients, and an oral therapy particularly would represent a groundbreaking advance for treatment of this indication.”

Under the terms of the deal, Merck will pay KalVista an upfront non-refundable fee of $37 million. KalVista is also eligible for further payments that could potentially reach $715 million. In addition to the collaboration, Merck has also taken a 9.9% stake in KalVista.

Merck gets certain rights including an option to acquire KVD001 through a period following the completion of the Phase 2 proof-of-concept trial that KalVista intends to begin later this year. KalVista has also granted Merck a similar option to acquire investigational orally delivered molecules for DME that will continue to be developed as part of its ongoing R&D activities.

Ben Thorner, senior vice president and head of business development & licensing at Merck Research Laboratories, said the KalVista team had already made important progress in advancing the candidate drug into the clinic.