Infamous German pharmaceutical titans Bayer are set to acquire US biopharmaceutical company Asklepios Inc (AskBio) for $4 billion (€3.38 billion) in a bid to break into a gene therapy business.
The Germans are set to pay $2 billion (€1.69 billion) upfront, and a further $2 billion later based on future success milestones.
The American company specialises in gene technology, specifically in the field of AAV gene therapy, a way of conditioning a genetic response to various harmless adeno-associated viruses to help individuals overcome and build immunity for diseases.
The long game for the industry is to allow for "genetic immunity" for individuals, by inserting immune genes into the patient's body as an alternative for surgery or medicine.
The sector is still young and highly experimental and has various associated risks, and is generally only being tested for diseases with no known cure.
Among AskBio's most pressing projects is an attempt to build gene immunity against Pompe disease - a disease characterised by the increased buildup of a sugar molecule called glycogen inside cells. Other projects include research into Parkinson's disease and congestive heart failure.
This is the German company's biggest acquisition since purchasing domestic rival Schering back in 2006 and has been done to upgrade its drug pipeline in the face of weaker agricultural sales as it seeks to finalise an $11 billion (€9.31 billion) settlement owing to its cancerous pesticide Roundup.
Bayer's medicine pipeline has started worrying investors as two of their bestselling drugs, the blood-thinner Xarelto and eye treatment Eylea, will begin to lose patent protection in 2024.
The German company is currently embroiled in over 52,000 lawsuits as a result of health issues associated with the Monsanto-developed weedkiller.
Last Wednesday, the German company lost a lawsuit against a French farmer who has suffered various neurological problems after inhaling the pesticide back in 2004.
The sheer number of damages claims has caused Bayer to increase regulations against the glyphosate-based pesticides after information surfaced about them potentially causing cancer.
Bayer remains vigilant that their pesticides do not cause health concerns if used properly.
However, the lawsuit was won owing to the prosecution positing that sufficient safety instructions were not present.
Bayer said this new deal complements the company's 2019 acquisition of Texas-based BlueRock Therapeutics, intending to create a fully-functional cell and gene therapy business.
AskBio and BlueRock are set to begin sharing information and collaborating but are still due to operate as completely separate entities, which as prompted a pledge from AskBio's five main owners to remain at the firm.
Chief Executive Officer and co-founder Sheila Mikhail said: “We are staying on board because of the unique structure that Bayer has provided. We’ll have the ability to make our science decisions."
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