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Merck signs $3bn deal for Kate Bingham-backed eye disease biotech

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US pharmaceutical group Merck has agreed to buy EyeBio, a start-up backed by UK venture capitalist Kate Bingham, for up to $3bn, as the maker of the world’s best-selling drug seeks to replenish its pipeline of treatments.

The deal for EyeBio, whose drugs under development treat common eye diseases, will come in the form of a $1.3bn upfront payment with a further $1.7bn dependent on certain milestones being achieved, Bingham and EyeBio chief executive David Guyer told the Financial Times.

Bingham, who led the UK government’s vaccine task force during the coronavirus pandemic, said EyeBio’s lead drug “could revolutionise the treatment of patients with diabetic macular oedema and age-related macular disease, which are the major forms of blindness in the western world”. The drug, restoret, is in early-stage trials.

For Merck, restoret would help boost its pipeline as it prepares for a projected fall in sales by 2029 as its blockbuster cancer drug Keytruda comes off patent. Bingham said the drug had the potential to generate several billion dollars in peak sales.

The US pharmaceutical group had already spent more than $20bn on business development since the start of last year, including $10.8bn on immunology biotech Prometheus Biosciences, as it prepares for Keytruda sales to peak at a projected $33bn in 2028.

“We believe that to accelerate development and to get this important, potential drug to patients with these diseases as soon as possible, partnering with . . . Merck made a lot of sense,” said Guyer.

Merck, which is known as MSD in Europe, declined to comment.

Age-related macular degeneration (AMD) is the main cause of irreversible blindness in the western world, while diabetic macular oedema (DME) is vision loss suffered by people with diabetes. Both occur when blood vessels leak into the back of the eye, leading to a build-up of fluid that causes blurred vision and blindness.

EyeBio’s drug is a once-monthly injection that restores the strength of the blood-retinal barrier and stops leakage. Early data from restoret released in February showed that the treatment could both improve AMD and DME patients’ eyesight in an eye test and reduce the thickness of the oedema, sparking a surge in interest for the company from prospective buyers, Bingham said.

“Virtually every patient showed extensive improvement. A lot of these eyes had oedema that went away and in many cases led to a normalised retina,” said Guyer. “That’s something that never happens . . . this is a form of regenerative, restorative medicine.”

Guyer said more data was required to determine if the drug could challenge or be used in combination with AMD drugs developed by Bayer and Genentech, which work in different ways. Merck will advance the treatment through late-stage trials in both disease areas.

Set up in 2021 by Guyer and Anthony Adamis, EyeBio received seed funding from SV Health Investors, the life sciences VC fund Bingham runs. She serves as EyeBio’s chair, while Merck was an early investor in 2022 through its venture fund.

EyeBio has raised just $130mn since being founded in 2021. “To end up with $1.3bn up front in less than two years is astonishing,” Bingham said.

Guyer, who also founded Iveric Bio, which Japan’s Astellas bought for $5.9bn last August, said EyeBio had another treatment in an earlier stage of development that could be complementary to restoret. He and Adamis plan to remain with EyeBio to develop the treatment further.


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