Merck to Acquire EyeBio for Up to $3 Billion to Advance First-in-Class Trispecific Antibody Restoret for Retinal Diseases

On May 29, MSD and EyeBio, an ophthalmic biotechnology company, announced that they had reached a definitive acquisition agreement. According to the terms of the agreement, MSD will acquire EyeBio for up to $3 billion through its subsidiary, including $1.3 billion in upfront cash and $1.7 billion in potential development, regulatory, and commercial milestone payments. The acquisition has received unanimous approval from EyeBio's board of directors. The transaction is expected to be completed in the third quarter of 2024.

EyeBio's lead candidate drug Restoret (EYE103) is a potential "first-in-class" tetravalent trispecific antibody, expected to enter pivotal Phase 2b/3 clinical trials in the second half of this year.

Dr. Dean Y. Li, President of Merck Research Laboratories, stated: "We will continue to execute our science-led business development strategy to expand and diversify our pipeline. Under the leadership of Dr. David Guyer and Dr. Tony Adamis, the EyeBio team has an excellent track record in developing groundbreaking ophthalmic therapies. By combining our strengths, we will rigorously accelerate the development of their promising candidates for retinal diseases."

EyeBio was founded in August 2021 and has completed $130 million in financing to date.

In February 2022, EyeBio completed a $65 million Series A financing round. In November 2023, EyeBio completed a $65 million Series A+ financing round. Investors included Bain Capital Life Sciences, Omega Funds, Vertex Ventures HC, SV Health Investors (seed round investment), Jeito Capital, Samsara Biocapital, and MRL Ventures Fund (MSD's Series A investment).

Retinal vascular leakage is a known risk factor for retinal diseases. EyeBio is developing a series of clinical and preclinical drug candidates for the prevention and treatment of vision loss associated with retinal vascular leakage.

The company's lead candidate product, Restoret™ (EYE103), is a potential first-in-class tetravalent, trispecific antibody in development that can simultaneously bind to the receptors LRP5 and FZD4, activating the Wingless-related integration site (Wnt) signaling pathway.

Norrin has been proven to be a necessary and sufficient condition for effectively restoring and maintaining the blood-retina barrier (BRB). Restoret mimics the natural ligand Norrin to activate the Wnt pathway. Restoret effectively simulates the function of Norrin and resolves leakage issues with long-lasting effects. It is administered via intravitreal injection to treat retinal diseases characterized by leakage, including neovascular age-related macular degeneration (NVAMD), diabetic macular edema (DME), and familial exudative vitreoretinopathy (FEVR).

Restoret is injected once a month and can restore the strength of the blood-retinal barrier and prevent leakage. In February 2024, EyeBio announced positive Phase 1b/2a clinical data for Restoret, showing that this treatment can both improve vision in AMD and DME patients and reduce the thickness of edema, sparking a surge of interest from potential buyers. Nearly every patient showed broad improvements. Much of the edema in these eyes disappeared, leading to retinal normalization in many cases.

Based on the positive results from the open-label Phase 1b/2a AMARONE study in patients with diabetic macular edema (DME) and neovascular age-related macular degeneration (NVAMD), Restoret is expected to enter pivotal Phase 2b/3 trials in the second half of 2024 to assess its potential for treating DME.

Dr. David R. Guyer, CEO and President of EyeBio, stated: "The EyeBio team has successfully assembled a series of new drug candidates that have the potential to offer new treatment options for patients with retinal diseases. As a subsidiary of MSD, EyeBio will be able to leverage the necessary resources and infrastructure to support the clinical, regulatory, and commercial development of these drug candidates, helping to bring them to patients worldwide."

In addition to expanding MSD's pipeline, this acquisition significantly broadens the company’s presence in the ophthalmology field. The EyeBio team and leadership, including founders Dr. David Guyer and Dr. Tony Adamis, will continue their groundbreaking work as part of MSD, leveraging their experience and world-class expertise to advance the clinical development of Restoret and other ongoing projects.

According to research data from Grand View Research, the global AMD market size is expected to grow from over USD 10 billion in 2022 to approximately USD 18 billion by 2030. Currently, drugs such as Eylea (with sales reaching USD 5.9 billion in 2023), developed by Regeneron, and Vabysmo (with sales reaching USD 2.7 billion in 2023), developed by Roche, have been approved for the treatment of wet AMD.

MSD once sold some ophthalmic drugs but later abandoned the ophthalmology market to focus on drugs for treating cancer and immune diseases, as well as selling vaccines and animal treatment drugs. In recent years, MSD's CEO Rob Davis has been conducting asset transactions to reduce the company’s reliance on Keytruda, its blockbuster cancer immunotherapy drug. Keytruda is the company’s best-selling drug and is expected to lose protection of its main patent in 2028.

In the fiscal year 2023, Keytruda accounted for over 40% of Merck & Co., Inc.'s $60 billion in sales. The deals led by Davis include last year’s $10.8 billion acquisition of immunotherapy drug developer Prometheus Biosciences and the $11.5 billion acquisition of Acceleron Pharma in 2021.

By acquiring Acceleron, MSD has gained a newly approved product named Winrevair. Analysts predict that the drug’s sales will reach billions of dollars and help MSD diversify its business beyond Keytruda.

MSD also hopes to gain momentum from the upcoming FDA approval of the new pneumococcal vaccine V116. The PDUFA target date for this 21-valent vaccine is June 17, 2024. If approved, V116 will become the first pneumococcal conjugate vaccine specifically designed for adults.

In recent years, ophthalmic drugs have attracted the interest of pharmaceutical companies with their broad market space and growth potential. Last year, Bausch + Lomb acquired a dry eye drug from Novartis for $1.75 billion, while Japanese pharmaceutical company Astellas acquired Iveric Bio for $5.9 billion to enhance its capabilities in the ophthalmology field.

MSD's $1.3 Billion Acquisition of Eyebiotech Aims to Re-enter Growing Ophthalmology Market