FRANKFURT: Bayer AG struck an US$875mil deal to acquire British women’s health biotech Kandy Therapeutics Ltd in a move to expand its pharmaceuticals division before the expiration of patents on existing medicines.
The German drug and chemical company agreed to pay US$425mil upfront and potential milestone payments of US$450mil until the launch of Kandy’s experimental treatment for menopause symptoms.
Kandy’s drug NT-814 is expected to start a phase III clinical trial next year and could generate peak sales of €1bil globally, Bayer said in a statement.
Bayer shares rose 0.8% in Frankfurt.
Bayer’s pharmaceutical division has been looking for small-scale deals to boost earnings at a time when blockbuster blood thinner Xarelto and eye-care medicine Eylea will lose patent protection in the next few years.
The Leverkusen, Germany-based company has lacked major firepower for acquisitions after spending US$63bil in 2018 on agriculture giant Monsanto Co - a deal that brought a host of legal headaches that Bayer is also trying to put behind it.
Last August, Bayer’s pharma unit agreed to pay as much as US$600mil to buy the remainder of cell therapy biotech BlueRock Therapeutics. At the time, Stefan Oelrich, Bayer’s head of pharma, said that the best value-creating deals in the industry in recent years have targeted early-stage companies whose products wound up becoming blockbusters.
Once Kandy’s drug comes to market, Bayer could make additional sales milestone payments that exceed US$100mil, the company said. The deal is expected to close in September. — Bloomberg
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