At US pharma giant Merck & Co., things are moving quickly. Whereas the company used to avoid large acquisitions in the past, things have been going forward steadily. Recently, there have been plenty of major deals: the $11.5 billion purchase of drug maker Acceleron Pharma was followed by the $780 million acquisition of US biotech company Exelead.

Shortly thereafter, the cancer specialist Imago BioSciences was acquired for $1.35 billion, followed by the $11 billion acquisition of immunology company Prometheus BioSciences.

Now, the pharma giant is striking again: yesterday, Merck announced the purchase of Caraway Therapeutics. With its next big acquisition, Merck & Co. wants to strengthen its drug portfolio in the area of genetically caused neurodegenerative and rare diseases.

Merck puts $610 million on the table Now to the details of the deal: Merck has signed an agreement under which the company will put up to $610 million in upfront payments and potential milestone payments for the purchase of Caraway Therapeutics.

Meanwhile, Caraway Therapeutics is not unknown to Merck. Originally known as Rheostat Therapeutics, it was founded by SV Health Investors and the Dementia Discovery Fund before launching in 2018 with a financing round of $23 million. Merck was a supporter from the start, leading the financing round together with pharma giant AbbVie.

Caraway – specialist for neurodegenerative diseases Caraway, a drug developer, has a drug pipeline that includes experimental treatments for genetically defined neurodegenerative and rare diseases such as Parkinson’s disease and ALS. According to the company’s website, four programs are currently in progress, none of which have yet reached clinical development.

The company is working on drugs that take advantage of the cells‘ ability to filter out toxins to prevent or contain damage. Caraway Therapeutics focuses on a cell structure called lysosome, which contains digestive enzymes and breaks down proteins.

As part of the transaction, Merck will acquire all outstanding shares of Caraway through a subsidiary, with certain milestones to be achieved for the development of certain pipeline candidates.

Merck looking for new blockbusters For Merck, the numerous acquisitions are part of the strategy: the company is looking for new products to replace the income from its blockbuster cancer drug Keytruda. After all, the preparation brought in around $21 billion in revenue last year as it heads towards the expiration of the patent and the looming generic competition. Keytruda accounted for around 35% of Merck’s total revenue.

While the $11 billion Prometheus Biosciences acquisition targeted treatment of inflammatory bowel diseases, the new acquisition is aiming at diseases for which there are only few promising drugs on the market. Whether Merck can successfully bring the development to a positive end remains to be seen. What is certain is that the deal with Caraway Therapeutics is likely not the last move to sustainably strengthen Merck’s research pipeline.