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Merck is deepening its commitment to the development of treatments for neurodegenerative diseases with its latest acquisition.

The Rahway-based pharmaceutical company and Caraway Therapeutics Inc. unveiled a definitive agreement Nov. 21 under which Merck, through a subsidiary, will acquire the Cambridge, Mass., biopharmaceutical company for a total potential consideration of up to $610 million, including an undisclosed upfront payment as well as contingent milestone payments.

The upfront payment will be expensed by Merck in the fourth quarter of 2023 and included in non-GAAP results, the company said.

The news follows Merck’s June closing of its $10.8 billion acquisition of San Diego-based Prometheus Biosciences Inc., which focuses of developing treatments for immune-mediated diseases, such as ulcerative colitis and Crohn’s disease.

Caraway works on innovative approaches for the treatment of genetically defined neurodegenerative and rare diseases, including Parkinson’s disease and ALS, or amyotrophic lateral sclerosis.

“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,” said George Addona, senior vice president, Discovery, Preclinical Development and Translational Medicine, Merck Research Laboratories. “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.”

Under the terms of the agreement, the Merck subsidiary will acquire all outstanding shares of Caraway with earnout milestones associated with the development of certain pipeline candidates.

The Caraway board of directors has approved the transaction, according to the announcement.

Through its MRL Ventures Fund, Merck has been a Caraway shareholder since 2018.