Bayer today said it agreed to acquire gene therapy developer Asklepios BioPharmaceutical (AskBio) for up to $4 billion—half of that in upfront cash—in a deal signaling the buyer’s intent to expand its cell and gene therapy (CGT) business into an industry leader focusing on treatments for unmet needs.
Headquartered in North Carolina’s Research Triangle Park, AskBio focuses on gene therapies for neuromuscular, central nervous system, cardiovascular, and metabolic diseases, based on the company’s adeno-associated virus (AAV) platform. AskBio’s lead research programs are designed to treat Pompe disease, Parkinson’s disease, and congestive heart failure, and are in early clinical phases.
AskBio’s gene therapy platform includes a cell line manufacturing process and an AAV capsid and promoter library. The company said it has generated hundreds of proprietary third-generation AAV capsids and promoters designed to offer differentiation through potentially improved efficacy, immune response, and tissue and organ specificity. The platform also holds the potential to treat a larger number of patients by tackling polygenetic indications.
That platform is based on the work of R. Jude Samulski, PhD, who founded AskBio in 2001. Samulski was first to show that AAV could be cloned for therapeutic purposes and used as a vector in delivering gene therapy. Samulski was later the scientific founder of an AskBio spinout, Bamboo Therapeutics of Chapel Hill, where he served as its chief scientific officer and executive chairman until Bamboo was acquired by Pfizer in 2016 for $645 million.
In acquiring AskBio, Bayer will own full rights to that company’s gene therapy platform, as well as an established contract development and manufacturing organization (CDMO) that the buyer said will enable future partnerships centered on AAV gene therapies.
“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,” Sheila Mikhail, CEO and co-founder of AskBio, said in a statement.
Complementing BlueRock
By adding AskBio to its CGT business, Bayer said, it will strengthen its commitment to the field by impacting multiple therapeutic areas, as well as complement its up-to-$600 million acquisition of cell therapy developer BlueRock Therapeutics last year.
“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,” stated Werner Baumann, Bayer’s chairman of the board of management (CEO). “In line with our purpose ‘science for a better life,’ we are committed to bringing significant improvements for patients through innovation.”
The deal also helps shore up Bayer’s drug operations at a time when it faces two significant headwinds. One is its acquisition of Monsanto, a $63 billion deal completed in 2018 and which has forced Bayer to shoulder costly legal battles over the acquired company’s Roundup herbicide.
In June, Bayer agreed to pay $10.9 billion in a settlement of tens of thousands of claims, in return for being able to continue selling Roundup without additional warning labels; Bayer insists Roundup is safe based on review by the U.S. Environmental Protection Agency and other regulators. Earlier this month, California’s Supreme Court turned back a Bayer appeal from a separate $20.4 million judgment in favor of groundskeeper Dewayne “Lee” Johnson, who sued the company contending that he developed cancer after using the herbicide.
The other headwind Bayer faces is shrinking sales for its agriculture unit due to reduced demand for biofuel and shrinking crop prices blamed on the COVID-19 pandemic. In September, Bayer said it would cut €1.5 billion (about $1.8 billion) in expenses, and raised the possibility of also eliminating jobs and selling some of its operations.
Recouping sales
By boosting its CGT business, Bayer also hopes to recoup sales it expects to lose once patent protection starts to expire in 2024 for two present-day blockbusters—Zarelto® (rivaroxaban), co-marketed with Johnson & Johnson’s Janssen Pharmaceuticals; and Eylea® (aflibercept), the vascular endothelial growth factor (VEGF) inhibitor indicated for numerous eye disorders and co-marketed with Regeneron Pharmaceuticals.
During the first half of this year, Xarelto was Bayer’s best-selling drug with January–June sales of €2.172 billion ($2.566 billion), up 11.7% from the first half of 2019. The company’s second-best seller was Eylea, which racked up €1.161 billion ($1.372 billion), down 2.2% from the year-ago period.
In agreeing to acquire AskBio, Bayer agreed to pay $2 billion upfront and up to $2 billion tied to achieving milestones—of which 75% could be payable over the next five years.
AskBio will continue to operate as an independent company on an arm’s-length basis from parent Bayer “to preserve its entrepreneurial culture as an essential pillar for nurturing successful innovation,” Bayer said. The prospective parent company’s new CGT unit will consolidate the company’s activities in the field in order to establish an innovation ecosystem for AskBio as well as BlueRock.
The deal is set to close in the fourth quarter, subject to customary closing conditions that include regulatory approvals.
Samulski was recruited in 1993 to the University of North Carolina at Chapel Hill through a grant from the state-funded North Carolina Biotechnology Center, created in 1984 to advance the industry statewide and wean the state’s economy from the declining tobacco, textiles, and furniture sectors. He led the University’s Gene Therapy Center for 25 years and still heads a research laboratory there.
Samulski has played a key role in building North Carolina biotech beyond the manufacturing operations of heritage pharma giants—especially in the Raleigh-Durham-Research Triangle Park region that is among the nation’s top-10 biopharma clusters as ranked by GEN last year and this year.
“Our innovation in capsid re-engineering and promoter design, coupled with our scaled manufacturing processes, gives us the tools to provide gene therapy solutions to more people suffering from a wider spectrum of disease that is not being adequately treated today,” Samulski said.
