Merck & Co. Inc. made a $9.1 million investment in KalVista Pharmaceuticals Inc., acquiring a 9.9% stake in the company by purchasing 1,070,589 shares at $8.50 apiece.

Merck will also pay a further $37 million to help develop KalVista's investigational drug KVD001 to treat diabetic macular edema. Merck has an option to buy the treatment once it clears a phase 2 proof-of-concept trial, which will begin later this year.

Merck will also have access to any future KalVista treatments for diabetic macular edema.

If Merck exercises its option, KalVista will be eligible to receive up to a further $715 million in milestone-related payments, as well as royalties on the sale of any commercialized products.

KalVista will retain control over the products and the trial until Merck exercises its option.