Merck is shoring up its neuroscience pipeline with the acquisition of Caraway Therapeutics, a preclinical startup with programs in Parkinson’s disease and amyotrophic lateral sclerosis.
Specific financial terms were not disclosed, but Merck said Tuesday that the acquisition agreement could pay out up to $610 million, which includes upfront and milestone payments.
Cambridge, Massachusetts-based Caraway develops drugs addressing genetically defined neurodegenerative and rare diseases. The company aims to treat them with small molecules that leverage processes in a cell for clearing away toxic cellular components. Mutations can impair the function of lysosomes, cellular components for breaking down and eliminating toxic substances. Caraway’s small molecules modulate lysosomal function.
Caraway has two compounds in its program addressing TRPML1, an ion channel located on lysosomes. One of the molecules is in development for Parkinson’s disease stemming from mutations to the GBA gene, which codes for glucocerebrosidase (GCase), an enzyme key to maintaining lipid metabolism. Deficiency of that enzyme leads to lysosomal dysfunction. By activating TRPML1, Caraway aims to address the pathway that is impaired in GBA-Parkinson’s patients.
There’s potential competition in treating genetically driven Parkinson’s. Chicago startup Vanqua Bio is developing small molecules that cross the blood-brain barrier to activate GCase and restore lysosomal function. Gene therapies in development by Neurocrine Biosciences and Eli Lilly offer the potential for a one-time fix of Parkinson’s driven by GBA1 mutations.
Another TRPML1-targeting small molecule from Caraway is in development for an undisclosed rare disease that is a non-central nervous system disorder. The company is also researching loss-of-function genetic variants of TMEM175, a potassium channel key to lysosomal function. Caraway is developing small molecules that increase TMEM175’s activity to enhance the activity of the lysosome as a potential treatment for Parkinson’s and ALS.
“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,” George Addona, senior vice president, discovery, preclinical development and translational medicine, Merck Research Laboratories, said in a prepared statement. “We look forward to applying our expertise to build upon this work with the goal of developing much needed disease-modifying therapies for these conditions.”
Caraway was initially called Rheostat Therapeutics. The startup was incubated by SBV Ventures and the Dementia Discovery Fund, which provided seed financing. In 2018, the startup announced a $23 million Series A round co-led by MRLV, the venture investment group of Merck, and AbbVie Ventures. In 2019, Rheostat changed its name to Caraway Therapeutics.
Neuroscience is a tiny portion of Merck’s drug portfolio and pipeline, which is dominated by oncology, mainly the cancer immunotherapy Keytruda. But the company has previously looked at TRPML1 as a way to treat neurodegeneration. In 2019, the pharma giant committed up to $576 million to acquire Calporta Therapeutics, a startup that was developing small molecule agonists of TRPLM1. It’s not clear what became of those programs, which are not listed in the company’s pipeline or financial reports.
Merck has also turned to partnerships to bolster its neuroscience prospects. Last year, it paid Cerevance $25 million up front to begin a collaboration discovering new targets for potential Alzheimer’s disease drugs.
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