Merck & Co. has agreed to acquire EyeBiotech (EyeBio) for up to $3 billion, the companies said today, in a deal that will return the buyer to the eye drug development segment it vacated about a decade ago.
Based in London, EyeBio has developed a pipeline of clinical and preclinical candidates designed to prevent and treat vision loss associated with retinal vascular leakage. EyeBio’s lead candidate Restoret™ (EYE103) is a tetravalent, tri-specific antibody agonist of the Wingless-related integration site (Wnt) signaling pathway.
EyeBio expects to advance Restoret into a pivotal Phase IIb/III trial that will assess the drug in patients with diabetic macular edema (DME) in the second half of this year, after generating positive data in the open-label Phase Ib/IIa AMARONE trial (NCT05919693) in patients with DME and neovascular age-related macular degeneration (NVAMD).
“(EyeBio) has a strong track record of developing groundbreaking ophthalmology therapies. By combining our strengths, we aim to advance with rigor and speed the development of their promising pipeline of candidates targeting retinal diseases,” Dean Y. Li, MD, PhD, president, Merck Research Laboratories, said in a statement.
Merck also aims to recoup revenues it expects to lose starting in 2028 when it loses key patent exclusivity in the U.S. for Keytruda® (pembrolizumab), the blockbuster cancer immunotherapy that was the world’s top-selling drug in 2023, with just over $25 billion in sales. Keytruda last year also generated $1.186 billion in royalties for Bristol Myers Squibb and ¥50.5 billion ($321.4 million) in royalties for Ono Pharmaceutical, under a 2017 agreement that settled a patent lawsuit filed by Ono and Bristol Myers Squibb, and is set to expire at the end of 2026.
In acquiring EyeBio, Merck will return to the eye drug segment it left through a series of deals. Merck divested its U.S. ophthalmology business to Akorn Pharmaceuticals in 2013 and 2014, initially by selling its ophthalmology subsidiary Inspire Pharmaceuticals to Akorn for $52.8 million. That deal gave Akorn U.S. rights to three branded eye drugs, AzaSite® , COSOPT® (dorzolamide hydrochloride—timolol maleate ophthalmic solution), and COSOPT® PF (dorzolamide hydrochloride-timolol maleate ophthalmic solution) 2%/0.5%.
A year later, Merck sold COSOPT, COSOPT PF, and seven other eye drugs to Japan-based Santen Pharmaceutical for $600 million upfront plus an undisclosed amount in payments tied to achieving milestones. The seven drugs were TRUSOPT® (dorzolamide hydrochloride ophthalmic solution) sterile ophthalmic solution 2%, TRUSOPT PF® (dorzolamide hydrochloride ophthalmic solution) preservative-free, TIMOPTIC® (timolol maleate ophthalmic solution), TIMOPTIC PF® (timolol maleate preservative free ophthalmic solution in unit dose dispenser), TIMOPTIC XE® (timolol maleate ophthalmic gel forming solution), SAFLUTAN® (tafluprost) and TAPTIQOM® (tafluprost-timolol maleate ophthalmic solution, in development) in Japan and key markets in Europe and Asia Pacific.
“The decision to divest our ophthalmics business is part of our ongoing strategy to sharpen our commercial focus and improve our operational effectiveness,” James J. (Jay) Galeota Jr., Merck’s then-president, Hospital and Specialty Care, stated at the time. (Galeota is now CEO and president of small molecule drug developer Kallyope).
Created in 2021
Privately-held EyeBio was created in August 2021 when SV Health Investors founded and seeded the company. (SV’s biotech franchise is co-led by Dame Kate Bingham, DBE, who chaired the UK Vaccine Taskforce during the COVID-19 pandemic, and Mike Ross, PhD, once Genentech’s 10th employee, who oversees U.S. investment).
In 2022, EyeBio emerged from stealth by announcing a $65 million Series A financing co-led by SV with Samsara BioCapital and Jeito Capital, with additional financial backing from MRL Ventures. Last November EyeBio closed on an extension of its Series A financing, bringing the company’s total raised to $130 million, with new investors Bain Capital Life Sciences, Omega Funds and Vertex Ventures HC joining existing investors.
“The EyeBio team has successfully assembled a pipeline of novel candidates with the potential to provide new treatment options for patients with retinal disease,” said David R. Guyer, MD, EyeBio’s CEO and president. “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.”
Guyer co-founded EyeBio with Anthony P. Adamis, MD, the company’s chief scientific officer. Both will remain with EyeBio to continue advancing the clinical development of Restoret and other ongoing development programs, as the company continues as a subsidiary of Merck.
Merck agreed to pay $1.3 billion upfront for EyeBio, as well as up to $1.7 billion in payments tied to achieving developmental, regulatory and commercial milestones.
Merck’s purchase of EyeBio is subject to approval under the Hart-Scott-Rodino Antitrust Improvements Act and other customary conditions. Merck said it expected 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. The deal is expected to close in the third quarter and be accounted for as an asset acquisition.
“Less than three years ago, EyeBio was hatched to translate David Guyer’s idea for a potential new therapy for retinal diseases into a reality,” Bingham stated. “This agreement reflects the hard work of the talented EyeBio team, led by Guyer, who through this agreement have placed Restoret on a defined development path to patients.”
