Merck to pay up to $3B for ophthalmology-focused biotech EyeBio

Merck, the Rahway-based pharmaceutical giant, has entered into a definitive agreement to acquire Eyebiotech Ltd., a privately held ophthalmology-focused biotechnology company, for $1.3 billion upfront and up to another $1.7 billion in milestone payments, it announced Wednesday.

Under the terms of the agreement, Merck — through a subsidiary — will acquire all outstanding shares of EyeBio for up to $3 billion, including the upfront payment and potential milestone payments. The deal has been unanimously approved by the EyeBio board.

“We continue to execute on our science-led business development strategy to expand and diversify our pipeline,” Dean Y. Li, president of Merck Research Laboratories, said in a prepared statement. “The EyeBio team, under the leadership of Dr. David Guyer and Dr. Tony Adams, 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.”

Guyer, Adams and other members of the EyeBio team and leadership are expected to join Merck to continue work on EyeBio’s pipeline.

That pipeline includes clinical and preclinical candidates for the prevention and treatment of vision loss associated with retinal vascular leakage, a known risk factor for retinal diseases, Merck said in its news release. Its lead candidate is called Restoret.

Closing of the deal is expected in the third quarter, pending customary approvals and conditions.

Citi acted as Merck’s financial adviser, while Gibson, Dunn & Crutcher acted as its legal adviser. Centerview Partners LLC was EyeBio’s financial adviser, while Skadden, Arps, Slate, Meagher & Flom LLP was its legal adviser.