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Merck & Co. Inc. is buying Caraway Therapeutics for a potential sum of up to $610 million. The New Jersey-based company confirmed this deal on Tuesday, Nov. 21.
Reuters reported that Merck will acquire the said biotech firm through a subsidiary. The upfront payment will be offset by the company in the last quarter of this year.
Other Details of the Deal
Merck signed off on a contract for the acquisition of Caraway Therapeutics which was originally named Rheostat Therapeutics. In addition to the upfront, Merck will complete the payment via milestones. At this point, there are no details about the breakdown of the exact costs yet.
The transaction was already approved by Caraway’s Board of Directors. The firm is known for its experimental treatment of genetically defined neurodegenerative conditions and other rare diseases such as Parkinson's disease.
The Future of the Partnership
Merck and Caraway Therapeutics are both looking forward to joint efforts in the development of better treatments for neurodegenerative diseases. At any rate, under the terms of their acquisition deal, the former, through its subsidiary, will buy all outstanding shares of Caraway with earnout milestones related to the development of some pipeline candidates.
“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,” Merck Research Laboratories’ senior vice president of discovery, preclinical development and translational medicine, George Addona, said in a press release. “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.”
Caraway Therapeutics’ chief executive officer, Martin D. Williams, added that the deal with Merck is an important milestone for the company. Furthermore, he said the acquisition is also a testament to the dedication and hard work of the Caraway team that tried its best to fulfill the company’s mission of creating therapeutics with the “potential to alter the progression of devasting neurodegenerative diseases and help patients.”
Williams went on to say, “This acquisition leverages Merck’s industry-leading research and development capabilities to help further advance our discovery and preclinical programs. We thank and appreciate our investors, including SV Health Investors and its Dementia Discovery Fund, AbbVie Ventures, Amgen Ventures, Eisai Innovation and MRL Ventures Fund for their support.”
Photo by: Merck Media Library
