Benzinga | Oct 26, 2020 11:40PM EDT

Bayer Acquires AskBio For $4B To Strengthen Its Gene Therapy Platform

German pharma and life sciences company Bayer AG (OTC: BAYRY) has acquired U.S.-based gene therapy biotech company Asklepios Biopharmaceutical Inc (AskBio) in a deal valued up to $4 billion.

The purchase price of $2 billion will be paid upfront, and the remaining half will be payable in success-based milestone payments. Approximately 75% of the milestone payment amount will be due in the next five years.

The agreement is expected to close in the fourth quarter of 2020, subject to regulatory approval.

What Happened The acquisition will give Bayer rights for AskBio's intellectual properties, including a functional Contract Development and Manufacturing Organization (CDMO), as well as AskBio's cutting edge adeno-associated virus-based gene therapies, technology, and manufacturing platforms.

Bayer has engaged Credit Suisse Group AG (NYSE: CS) as a financial advisor, whereas AskBio has JPMorgan Chase & Co (NYSE: JPM) as the financial advisor.

AskBio will continue to function as an independent entity on an arms-length basis after completing the acquisition transaction.

Why Does It Matter AskBio develops gene therapies for neuromuscular, central nervous system, cardiovascular and metabolic diseases.

According to Bloomberg, with some patents for key therapies set to expire, the biotech acquisition could support Bayer's cell and gene therapy treatments.

In 2019, Bayer acquired 100% interest in engineered cell therapy company BlueRock Therapeutics for $600 million. BlueRock was established as a joint venture in 2016, in partnership with healthcare investment firm Versant Ventures.

Price Action On Friday, BAYRY shares closed at $12.50 with a marginal 0.16% gain.

Image Courtesy: NIH Image Gallery