Merck & Co Inc announced on Tuesday an agreement to acquire Caraway Therapeutics Inc for a total potential consideration of up to $610 million, including an undisclosed upfront payment and earnout milestones linked to the development of certain drugs Caraway has in the pipeline.
Caraway, a drug developer, has a drug pipeline that includes experimental treatment of genetically defined neurodegenerative and rare diseases, such as Parkinson's disease.
"Caraway’s multidisciplinary approach has yielded important progress in evaluating novel mechanisms of modulation of lysosomal function with potential for the treatment of progressive neurodegenerative diseases," Merck Research Laboratories senior vice president, discovery, preclinical development and translational medicine, George Addona said in a statement.
Merck noted the upfront payment will be expensed in the fourth quarter of 2023 and included in non-GAAP results.
The company added that it has been a shareholder of Caraway Therapeutics through its MRL Ventures Fund since 2018.
Shares of Merck were little changed in pre-market trading on Tuesday but have fallen 8% year to date.
Contact Sean at sean@proactiveinvestors.com