Dive Brief:

• Merck & Co. on Wednesday said it has agreed to buy privately held eye drug developer EyeBio for $1.3 billion in cash upfront and as much as $1.7 billion in future milestone payments.
• Backed by SV Health Investors, Samsara BioCapital and Jeito Capital, EyeBio focuses on developing treatments for vision loss associated with retinal vascular leakage. Its most advanced drug, Restoret, is an injection designed to restore the blood-retinal barrier by targeting a signaling pathway known as Wnt.
• Restoret delivered results Merck described as positive in a Phase 1b/2a study of people with diabetic macular edema and neovascular age-related macular degeneration. Based on that research, EyeBio plans to move Restoret into a pivotal trial for patients with diabetic macular edema in the second half of this year.

Dive Insight:

The purchase offers more diversity for a Merck pipeline dominated by vaccines and treatments for cancer, infectious diseases and cardiometabolic disorders. An earlier foray into eye disease fizzled out in 2022 when a partnership with NGM Biopharmaceuticals produced disappointing study results for a geographic atrophy drug. Merck later dropped its option to license the medicine and related compounds.

EyeBio launched in 2021 under the direction of founders David Guyer and Tony Adamis, who will both now join Merck. The pair previously founded a company called Eyetech Pharmaceuticals, which Guyer ran as CEO before becoming a venture capitalist and later serving as CEO of Iveric Bio.

Adamis went on to Roche’s Genentech, where he helped develop Vabysmo as part of his focus on anti-vascular endothelial growth factor, or VEGF, drugs.

Adamis is credited with the co-discovery of the important role VEGF can play in neovascular-related macular degeneration and diabetic retinopathy. Overall, he’s helped develop 20 medications with 30 indications that have led to 25 Food and Drug Administration approvals, according to his corporate biography.

Guyer and Adamis founded EyeBio with seed money from SV Health. The company then undertook a Series A financing round in February 2022 that raised $65 million, helped by funds from Merck’s corporate venture arm. In November 2023, an expanded Series A round upped the total to $130 million.

Merck’s decision to snap up EyeBio follows an upswing in biotech acquisitions that began last year after a relatively quiet 2021 and 2022. Merck said the acquisition will be made through a subsidiary and should close in the third quarter.