Merck KGaA and Skyhawk Therapeutics Forge $2B RNA-Targeting Alliance for Neurological Diseases

Merck KGaA, the German pharmaceutical giant, has entered into a significant collaboration with Skyhawk Therapeutics, a Massachusetts-based biotech firm, to develop novel small molecule RNA-targeting drugs for neurological indications. The partnership, announced on August 18, 2025, could be worth up to $2 billion, marking a substantial investment in the burgeoning field of RNA modulation.

Strategic Focus on Innovative Neuroscience

The collaboration aligns with Merck KGaA's strategic emphasis on innovative science and next-generation technologies in neurology. Dr. Amy Kao, Senior Vice President and Global Head of the Neuroscience and Immunology Research Unit at Merck KGaA, highlighted the potential of RNA splicing modulation as "an exciting frontier in drug discovery."

Under the agreement, Skyhawk will employ its proprietary SkySTAR (Skyhawk Small molecule Therapeutics for Alternative splicing of RNA) platform to design small molecules targeting specific RNA sequences selected by Merck. While the exact neurological indications remain undisclosed, both companies emphasized their focus on areas with high unmet medical needs.

Deal Structure and Financial Terms

The collaboration's structure reflects a trend in pharma-biotech partnerships, with Skyhawk leading discovery and preclinical efforts before potentially handing over development and commercialization to Merck. The German pharma will have the option to advance promising candidates into clinical trials and beyond.

Financial details reveal a potentially lucrative arrangement for Skyhawk:

• Total deal value of up to $2 billion
• Milestone payments to be paid by Merck KGaA
• Tiered royalties on potential future sales

This agreement adds to Skyhawk's impressive roster of high-value collaborations, including recent deals with Ipsen ($1.8 billion) and Vertex ($2.2 billion), as well as previous partnerships with Merck & Co., underlining the industry's growing interest in RNA-targeting technologies.

Skyhawk's Rising Profile in RNA Therapeutics

Founded in 2018 with a modest $8 million in initial financing, Skyhawk Therapeutics has rapidly established itself as a leader in RNA-targeted drug discovery. The company's internal pipeline includes a Phase 2/3 splicing modulator for Huntington's disease and preclinical programs in oncology and fibrosis.

Bill Haney, CEO of Skyhawk, expressed confidence in the SkySTAR platform's ability to "address challenging disease biology through precise RNA targeting," emphasizing the potential to develop first-in-class medicines through the Merck KGaA collaboration.

As the pharmaceutical industry continues to explore new modalities for addressing previously "undruggable" targets, partnerships like this Merck-Skyhawk alliance underscore the growing importance of RNA-based approaches in drug discovery and development, particularly in complex neurological disorders where traditional methods have fallen short.