Deal value: $2 billion (upfront)
Premium to previous closing price: N/A
Date announced: Oct. 26, 2020
Every pharma company wants to secure a place in the burgeoning cell and gene therapy field, including Bayer. Amid tough soul-searching, the German conglomerate made two acquisitions in the past two years for next-generation technologies.
Last year, Bayer put down $2 billion upfront and potentially $2 billion more in milestones to take in adeno-associated virus (AAV) gene therapy specialist Asklepios BioPharmaceutical.
Before AskBio, Bayer had already touched upon gene therapy with a $20 million upfront deal signed in 2014 with another AAV gene therapy developer, Dimension Therapeutics, now part of Ultragenyx. That deal’s focused on a Factor VIII gene therapy, which kicked off a clinical trial for hemophilia A at the end of 2018. But with AskBio, Bayer’s gained an entire platform.
Founded in 2001, AskBio has a relatively long history in gene therapy research compared with other well-known names such as AveXis and Spark Therapeutics, which were protagonists in multibillion buyouts by Novartis and Roche, respectively.
Over the years, AskBio spinoffs Chatham Therapeutics and Bamboo Therapeutics attracted buyouts by Baxter (now part of Takeda) and Pfizer for their respective hemophilia and Duchenne muscular dystrophy gene therapies. The Pfizer Duchenne candidate, dubbed PF-06939926, just began phase 3 testing.
Other AskBio subsidiaries include NanoCor Therapeutics, which last year pushed a gene therapy that aims to activate protein phosphatase inhibitor 1 into a phase 1 for congestive heart failure. Its Pompe Disease candidate is housed within another member called Actus Therapeutics.
All told, AskBio has developed a deep pipeline with preclinical and clinical candidates for neuromuscular, central nervous system, cardiovascular and metabolic diseases.
In a deal sweetener, AskBio also comes with gene therapy manufacturing capabilities, which are being applied to contractor work as the company doesn’t have a commercial product. Bayer has billed the CDMO setup as laying the foundation for future partnerships.
Gene therapy represents another front Bayer opened as it works to beef up its pharma pipeline before top-sellers Eylea and Xarelto lose patent protection around 2024. It followed the company’s 2019 acquisition of a cell therapy joint venture with Versant Ventures. Back then, it paid $240 million upfront to buy the remaining stake in BlueRock Therapeutics, taking full control of an induced pluripotent stem cell pipeline. In addition to that, it recently paid $60 million upfront to license Atara Biotherapeutics’ off-the-shelf CAR-T therapy ATA3271.
With those new additions in place, Bayer has created a cell and gene therapy platform, hoping to leverage external innovation while boosting its internal R&D capabilities in these fields with a streamlined infrastructure.
The pharma deals are part of a bigger overhaul Bayer CEO Werner Baumann initiated since the $63 billion Monsanto acquisition, which dragged it into a costly legal battle around weedkiller Roundup. The revamp is aimed at narrowing Bayer’s focus in pharma, consumer health and crop sciences. It has made several divestitures—including last year’s animal health sale to Elanco—and is making cuts elsewhere to channel resources to those areas.
More pharma licensing deals or M&As could be expected of Bayer as laid out in Baumann’s restructuring blueprint, which features external R&D heavily. Industry watchers have pointed out that the company’s internal pipeline lacks near-term projects that could step in for Eylea and Xarelto.