USA — Merck & Co. has entered into an agreement to acquire Caraway Therapeutics, a private biotechnology company, in a deal valued at up to US$610 million.
The move signifies Merck’s strategic expansion in the field of neurodegenerative disease research. The announcement outlines the terms of the deal, involving an undisclosed upfront payment along with conditional milestone payments. Merck intends to record the upfront charge during the current quarter.
Founded five years ago, Caraway Therapeutics specializes in the study of cellular waste disposal mechanisms.
The company boasts four preclinical drug programs in its pipeline, with a particular focus on an ion channel that has already captured Merck’s attention.
Caraway’s most advanced programs target the ion channel known as TRPML1, a protein regulating how lysosomes remove cellular waste.
This mechanism is of significant interest to Merck, given its potential applications in treating Parkinson’s disease associated with mutations in the GBA gene, as well as addressing non-central nervous system rare diseases.
Merck’s investment in Caraway follows the latter’s successful Series A funding round in 2018, where it raised US$23 million.
Noteworthy backers included several pharmaceutical venture arms, including that of Merck itself.
Initially known as Rheostat Therapeutics, the company rebranded to Caraway a year later, maintaining its commitment to developing treatments for rare and neurological diseases by “restoring cellular balance.”
Although Caraway has maintained a relatively low profile, Merck’s decision to acquire the company underscores its confidence in the emerging pipeline of the biotechnology firm.
Merck has previously demonstrated interest in drugs targeting TRPML1, as seen in its acquisition of Calporta Therapeutics in 2019 for US$576 million.
Calporta’s drug pipeline focused on supporting lysosome activity through TRPML1 ion channel targeting.
The acquisition aligns with a broader trend of increased pharmaceutical investment in neuroscience, signaling a resurgence of interest after setbacks and exits by major drugmakers in the last decade.
For Merck, this move represents another strategic step in a year marked by significant dealmaking. Earlier in 2023, the company acquired Prometheus Therapeutics for approximately US$11 billion, securing a late-stage drug for bowel disease.
Furthermore, in October, Merck committed to a payment of US$5.5 billion to Daiichi Sankyo for access to three antibody-drug conjugate cancer drugs.