Bayer to take over Asklepios BioPharmaceutical

Bayer (DE: BAYGn) agreed to take over the unlisted US biotech company Asklepios BioPharmaceutical Inc. for up to 4 billion dollars in order to rely on gene therapy with the help of modified viruses. The German company Bayer will pay $ 2 billion in advance and up to $ 2 billion in additional milestone payments depending on the development success, it said on Monday.

The North Carolina-based acquisition target, also known as AskBio, seeks to use the harmless adeno-associated virus as a delivery device to deliver genetic repair kits for a range of diseases into the body. The drug and agricultural pesticide maker needs to upgrade its drug development pipeline in light of the weaker outlook for agricultural sales and a $ 11 billion settlement over claims that its herbicide Roundup causes cancer.

AskBio's most advanced projects include early testing of volunteers for the prospective treatment of Pompe disease - a rare genetic disease in which a sugar molecule accumulates in cells - as well as Parkinson's disease and heart failure. Bayer said the agreement complements the 2019 acquisition of BlueRock Therapeutics, a developer of stem cell therapies, and underscores Bayer's intention to build a cell and gene therapy business. AskBio, which was founded in 2001, and BlueRock will share information and work together, but both will operate as independent entities, prompting a pledge from AskBio's five major owners, who are co-founders or key scientists, to stay with the company.

"We're staying on board because of the unique structure Bayer has provided ... We will be able to make our scientific decisions," said Sheila Mikhail, chief executive officer and co-founder of the company. Investors TPG Capital and Vida Ventures are selling a minority stake in the company. AskBio also helps other companies with their gene therapy research and production and has licensed experimental drugs to outside partners who have funded much of their own drug development. Bayer or AskBio would not provide any figures for such fee income.

A potential treatment for Duchenne muscular dystrophy, invented by AskBio, is currently being developed in clinical trials by Pfizer (N: PFE) and has been fast tracked by US regulators this month https://www.pfizer.com/ news / press-release / press-release-detail / pfizer-receives-fda-fast-track-designation-duchenne status received. In 2018 Bayer shifted to relying more on outside firms to improve drug development, which analysts believe needs a boost to offset an expected drop in revenue from its two best-selling pharmaceuticals from around 2024.

Credit Suisse (SIX: CSGN) served as financial advisor while Baker McKenzie served as legal advisor to Bayer. JP Morgan acted as financial advisor to AskBio while Ropes & Gray acted as legal advisor.