Hounds track their prey with a keen sense of smell.

Literal

Hunting-dog [topic-は] keen [of-の] smell-sense [instrumental-で] prey [object-を] chases.

鋭い ('sharp, keen, acute'). 嗅覚 ('sense of smell') — 嗅 ('to smell') + 覚 ('sense, perception'). 獲物 ('prey, game, catch'). 追う ('to chase, pursue'). A technical descriptive sentence about canine behavior.