US drug company Merck has signed a definitive agreement to acquire privately held US-based clinical-stage biotechnology company Afferent Pharmaceuticals.
Known as Merck Sharp & Dohme (MSD) outside the US and Canada, the company will will take over all outstanding stock of Afferent Pharmaceuticals in lieu for an upfront payment of $500m in cash.
Under the terms of the deal, the shareholders of Afferent Pharmaceuticals will be eligible to receive up to another $750m that is based on the attainment of certain clinical development and commercial milestones for multiple indications and candidates, including AF-219.
AF-219, which is a major investigational candidate of the biotechnology company, is a selective, non-narcotic, orally-administered P2X3 antagonist that is at present being tested in a Phase IIb clinical trial for the treatment of refractory, chronic cough.
It is also being evaluated in a Phase II clinical trial for the treatment of idiopathic pulmonary fibrosis (IPF) with cough.
Afferent Pharmaceuticals CEO Kathleen Sereda Glaub said: "This achievement is a reflection of the talent and hard work of the experienced Afferent team in advancing the science of P2X3 receptors and the clinical development of our novel therapeutic candidates.
"We are very pleased to enter into this agreement given Merck's reputation for maximising opportunities around novel mechanisms.
"This agreement with Merck creates significant value for Afferent shareholders while enhancing the potential of our portfolio to provide meaningful benefits to patients globally."
Subject to certain conditions, the closing of the transaction is expected to be in the third quarter of this year.
Afferent Pharmaceuticals develops therapeutic candidates that target the P2X3 receptor for the treatment of common, poorly-managed, neurogenic conditions.