Under the terms of the agreement, MSD, 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 boards of directors of both companies.

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

“We continue to execute on our science-led business development strategy to expand and diversify our pipeline,” said Dean Y. Li, president of Merck Research Laboratories. “By combining our strengths, we aim to advance with rigor and speed the development of their promising pipeline of candidates targeting retinal diseases,” Li added.

EyeBio has 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) signaling 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, MSD said in a statement.

David R. Guyer, CEO of EyeBio, commented: “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.”

Closing of the proposed acquisition. The transaction, which is subject to approval under the Hart-Scott-Rodino Antitrust Improvements Act and other customary conditions, is expected to close in the third quarter of 2024.