Bayer to Acquire BlueRock Therapeutics for $240 Million to Establish Leadership in Cell Therapy

On August 9, 2019, VCBeat (WeChat ID: vcbeat) learned that Bayer and BlueRock jointly announced an agreement under which Bayer would fully acquire BlueRock AG, a privately held biotechnology company headquartered in the United States. The company is dedicated to developing engineered cell therapies in the fields of neurology, cardiology, and immunology using its proprietary induced pluripotent stem cell (iPSC) platform.

In 2016, Bayer and Versant Ventures jointly established BlueRock Therapeutics. Bayer will now acquire the remaining shares for approximately $240 million in cash, payable upfront at closing, with an additional $360 million to be paid upon the company’s achievement of predefined development milestones. Bayer currently holds a 40.8% stake in BlueRock Therapeutics, implying a valuation of approximately $1 billion for the company. The transaction is expected to close in the third quarter of 2019.

Stefan Oelrich, Member of the Board of Management of Bayer AG and President of the Pharmaceuticals Division, stated: “This acquisition marks a significant milestone in our journey toward leadership in cell therapy. In line with our strategy to increase investment in technologies with breakthrough innovation potential, we have decided to build an industry-leading iPSC-based cell therapy pipeline anchored by BlueRock Therapeutics. Ultimately, we will join forces to deliver new therapeutic solutions for medical needs that remain unmet today.”

Dr. Emile Nuwaysir, CEO of BlueRock Therapeutics, stated, “We are thrilled to become part of the global pharmaceutical giant Bayer. At BlueRock Therapeutics, we have built a world-class cell therapy platform with industry-leading capabilities in research and development, process development, and manufacturing. With Bayer’s specialized support, we will be better positioned to explore, develop, and commercialize revolutionary new cell therapies for patients suffering from diseases previously considered intractable.”

The convergence of cell biology and engineering has provided patients with a novel therapeutic approach, delivering significant clinical benefits for diseases previously considered difficult to treat. Particularly for degenerative conditions characterized by cell loss and limited self-repair potential, such as myocardial loss or neurodegenerative disorders, regenerative cell therapy offers patients unprecedented potential benefits.

BlueRock Therapeutics’ cell therapy portfolio is currently focused on neurology, cardiology, and immunology, with a leading program for Parkinson’s disease expected to enter clinical trials by the end of 2019. Among neurodegenerative diseases, Parkinson’s disease exhibits the fastest growth in incidence, disability rates, and mortality. The gradual loss of motor control is the most prominent and distressing symptom of Parkinson’s disease. Stem cell therapy has the potential to reactivate the human brain and reverse degenerative processes, offering hope for restoring motor function in more than 7 million Parkinson’s patients worldwide.

In 2016, Bayer and founding investor Versant Ventures established BlueRock Therapeutics with a $285 million Series A financing round, as part of Bayer’s Leaps initiative. Leaps complements the R&D approach of Bayer’s divisions by focusing on building new companies and investing in early-stage technologies with breakthrough potential to prevent or cure some of today’s most significant health challenges.

Kemal Malik, Member of the Board of Executive Directors of Bayer AG responsible for Innovation, stated: “This transaction not only forms the foundation of our iPSC-based cell therapy portfolio but also exemplifies the successful innovation strategy of our Leaps unit, which creates biotechnology solutions with genuine transformative potential and may one day cure critically ill patients.”

Through this transaction, Bayer will acquire full rights to BlueRock Therapeutics’ CELL + GENE™ platform, including an extensive intellectual property portfolio and related technological platforms, such as proprietary iPSC technology, gene engineering, and cell differentiation capabilities. In addition to its current focus, BlueRock Therapeutics’ platform offers opportunities to expand into other therapeutic areas beyond its existing development pipeline. To preserve entrepreneurial culture as a key pillar in fostering successful innovation, BlueRock Therapeutics will continue to operate as an independent company on an arm’s length basis.

BlueRock Therapeutics is a leading engineered cell therapy company dedicated to developing regenerative medicines for intractable diseases. BlueRock Therapeutics’ CELL+GENE™ platform harnesses the power of cells to develop novel therapeutics for neurological, cardiovascular, and immunological indications. The company’s cell differentiation technology recapitulates developmental biology to generate natural cell therapies, which are further engineered to possess additional functionalities. By leveraging these cell therapies to replace damaged or degenerated tissues, there is potential to restore or regenerate lost functions. Founded in 2016 by Versant Ventures and Bayer AG, BlueRock Therapeutics represented one of the largest Series A financings ever undertaken by Bayer AG and Versant Ventures. The corporate culture of BlueRock Therapeutics can be defined by scientific innovation, high ethical standards, and a committed effort to provide transformative treatments to those in urgent need.

Bayer is a global enterprise with core competencies in the life science fields of health care and nutrition. Its products and services are designed to help support efforts to overcome the challenges posed by a growing and aging global population. While benefiting people, Bayer also aims to increase its profitability and create value through innovation. Committed to the principles of sustainability, Bayer stands for trust, reliability, and quality worldwide. In fiscal 2018, the Group employed approximately 117,000 people and achieved sales of €39.6 billion. Capital expenditures totaled €2.6 billion, and research and development expenses amounted to €5.2 billion.

Leaps, a subsidiary of Bayer, aims to address major challenges through investment. Leaps’ portfolio of potentially breakthrough technologies includes Casebia (CRISPR/Cas technology for treating severe genetic disorders), BlueRock Therapeutics (iPSC technology for treating cardiovascular and central nervous system diseases), Joyn Bio (plant probiotics enabling more sustainable agriculture by significantly reducing synthetic fertilizer use), Khloris (using iPSCs as potential preventive or curative cancer vaccines), Century Therapeutics (iPSC technology for allogeneic cell therapies in cancer), and Pyxis (antibodies targeting novel immuno-oncology targets).

(Compiled by Tian Shuhang)