Bayer buys AskBio for up to $4bn in gene therapy push

German chemicals giant Bayer AG said on Monday it agreed to acquire US biotech company Asklepios BioPharmaceutical Inc. (AskBio) for as much as $4 billion in a move that strengthens its pharma division with experimental gene therapies.

Bayer will pay $2 billion up front for North Carolina-based AskBio and up to an additional $2 billion in “potential success-based milestone payments.”

Bayer said that to “preserve its entrepreneurial culture as an essential pillar for nurturing successful innovation” AskBio will continue to operate as an independent company on an arm’s-length basis.

“AskBio’s development portfolio includes investigational pre-clinical and clinical stage candidates for the treatment of neuromuscular, central nervous system, cardiovascular and metabolic diseases,” said Bayer.

“Bayer will own full rights to AskBio’s gene therapy platform, including a broad intellectual property portfolio and an established contract development and manufacturing organization (CDMO) laying the foundation for future partnerships in the area of adeno-associated virus (AAV) therapies.

“The addition of AskBio to Bayer’s emerging cell and gene therapy (CGT) business strengthens Bayer’s commitment to the field.

“It complements the 2019 acquisition of BlueRock Therapeutics and consolidates Bayer’s ambition to create platforms with the potential to have an impact in multiple therapeutic areas …”

Bayer CEO Werner Baumann said: “With this acquisition, Bayer significantly advances the establishment of a cell and gene therapy platform that can be at the forefront of breakthrough science, contributing to preventing or even curing diseases caused by gene defects and further driving company growth in the future.”

Sheila Mikhail, CEO and co-founder of AskBio, said: “With Bayer‘s worldwide reach and translational expertise, especially in pathway diseases, our combined cultures of scientific advancement and commitment to patients, along with the retention of AskBio’s independent structure, Bayer and AskBio are positioned to provide accelerated development of gene therapies to treat more patients who can benefit from them.”

Closing of the transaction is contingent on customary closing conditions, including receipt of the required regulatory approvals, and is expected to take place during the fourth quarter of 2020.

Credit Suisse is serving as financial advisor to Bayer, while Baker McKenzie is serving as legal counsel. JP Morgan is serving as financial advisor to AskBio, while Ropes & Gray is serving as legal counsel.