In a strategic move to bolster its research presence in neurodegenerative diseases, Merck & Co. has announced its acquisition of private biotechnology company Caraway Therapeutics. The deal, valued at up to $610 million, includes an undisclosed upfront payment along with conditional milestone payments. The acquisition aligns with Merck's ongoing commitment to advancing innovation in the field of neuroscience.
Caraway Therapeutics, established five years ago, specializes in studying the waste disposal machinery of cells. The company has four preclinical drug programs in its pipeline, with the most advanced programs targeting an ion channel, TRPML1, which has been of interest to Merck for some time. The ion channel plays a crucial role in regulating how lysosomes remove cellular waste, and Caraway's focus is on exploring its potential therapeutic applications.
Merck's investment in Caraway underscores the pharmaceutical giant's strategy to strengthen its position in the neurodegenerative disease research landscape. The deal involves an upfront payment, the details of which remain undisclosed, and additional milestone payments contingent on certain conditions. Merck plans to expense the upfront charge in the current quarter.
Caraway Therapeutics, originally named Rheostat Therapeutics, raised a modest Series A round of $23 million in 2018 with support from various pharmaceutical venture arms, including Merck's. The company has maintained a focus on developing treatments for rare and neurological diseases, with an emphasis on restoring cellular balance.
The acquisition comes as part of Merck's broader trend of active deal-making in 2023. Earlier in the year, the pharmaceutical company acquired Prometheus Therapeutics for about $11 billion, gaining access to a late-stage bowel disease drug. In October, Merck agreed to a $5.5 billion deal with Daiichi Sankyo, securing access to three antibody-drug conjugate cancer drugs.
Merck's interest in Caraway's pipeline, particularly the TRPML1-targeting programs, is notable given the company's previous involvement in similar drug development. In 2019, Merck acquired Calporta Therapeutics, a small biotech firm, in a deal worth $576 million. Calporta's drug pipeline focused on supporting lysosome activity by targeting the TRPML1 ion channel.
The planned acquisition of Caraway Therapeutics reflects a broader trend of increased pharmaceutical investment in neuroscience, signaling a resurgence in interest after a period of deprioritization by some large drugmakers. As Merck continues to diversify its portfolio through strategic acquisitions, the company positions itself at the forefront of advancements in neurodegenerative research.