Update: MSD confirms $3bn takeover of EyeBio

Vince Fleming

MSD has confirmed a $3 billion takeover deal for ophthalmology biotech EyeBio and its drug candidate for diabetic macular oedema (DME) and neovascular age-related macular degeneration (AMD).

The transaction – which includes an upfront cash payment of $1.3 billion and another $1.7 billion in milestones – was first reported by the Wall Street Journal this morning. MSD, known as Merck & Co in the US and Canada, said it expects to close the purchase of the US and UK-based biotech in the third quarter.

EyeBio’s main asset is Restoret, an intravitreally delivered trispecific antibody that acts as an agonist of the Wnt signalling pathway and is in the phase 1b/2a AMARONE study in DME and neovascular or ‘wet’ AMD – both major causes of sight loss. MSD said that it expects the drug to start a pivotal phase 2b/3 study in DME before the end of the year. 

Restoret is designed to resolve the leakage in retinal fluid that is seen in these diseases and often persists, despite treatment with standard anti-VEGF therapies, which while effective can produce unpredictable results and often don’t resolve leakage fully, meaning vision will continue to deteriorate.

Last November, EyeBio completed an upscaled Series A financing, raising $130 million for the future development of Restoret, shortly after completing the initial multiple ascending dose (MAD) part of the AMARONE study focusing on safety. The second part – a dose-finding stage that will look at safety, as well as preliminary efficacy, measures – is now underway.

VEGF-directed drugs like Bayer and Regeneron’s Eylea (aflibercept) generate billions of dollars in sales every year from their use in AMD, DME, and other retinal disorders, and EyeBio reckons a drug that addresses residual fluid could have big sales potential.

To give an idea of the size and potential of the opportunity, Eylea is the top-selling drug in the ophthalmic anti-VEGF category, with sales of around $9.5 billion last year, but could see biosimilar competition within the next few years. Meanwhile, Roche’s newer VEGFxAng-2 bispecific antibody Vabysmo (faricimab) – first approved in 2022 – is also gaining ground at a phenomenal pace, with sales reaching $2.7 billion last year and almost $930 million in the first quarter of 2024 alone.

With those sorts of numbers, it is unsurprising that MSD is interested in making a wager on Restoret and accelerating its clinical development, particularly as it looks ahead to the end of patent protection for its $25 billion-a-year cancer blockbuster Keytruda (pembrolizumab) from 2028.

The pharma group has been steadily bolting on acquisitions to boost its pipeline and product portfolio, notably buying Acceleron for $11.5 billion in 2021 and Prometheus for $10.8 billion a year later, along with several smaller-scale deals.

In its 2023 financial update, chief executive Rob Davis said the company was still interested in deals in the $1 billion to $15 billion range. The company all-but exited the ophthalmology sector a decade ago, but has retained an interest – licensing a drug for geographic atrophy from NGM Bio in 2015, for example – although, that failed a phase 2 trial in 2022 and the alliance was dissolved.

Photo by Vince Fleming on Unsplash