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Bayer buys rest of BlueRock, broadening cell therapy bet

  • Bayer on Thursday said it will buy the rest of BlueRock Therapeutics that it doesn’t currently own, paying $240 million upfront and lining up another $360 million in contingent payments.
  • The transaction values BlueRock at $1 billion. Bayer had held a 40.8% stake in the Cambridge, Massachusetts-based cell therapy company through a joint venture agreement with Versant Ventures inked three years ago.
  • In an effort to preserve BlueRock’s biotech culture, Bayer will keep it an independent company with “arms-length” management, the companies said in a statement.

Bayer took its initial stake in BlueRock via its “Leaps” program, a venture-like arm that invests in early-stage research, typically via joint ventures.

The pharma must have liked what it saw in BlueRock, opting to acquire the company three years after committing along with Versant $225 million to the early-stage biotech.

The transaction is further evidence of the value Bayer sees in induced pluripotent stem cells, or iPSCs. Such cells are reprogrammed into an embryonic-like state from which they can be developed into different cell types relevant for treating disease.

Just last month, Bayer backed biotech startup Century Therapeutics with $215 million. That company is developing iPSCs with an eye toward treating blood cancers and solid tumors — a field that also includes Fate Therapeutics.

BlueRock’s focus, by contrast, is on neurology, cardiology and immunology, though the companies said the therapy platform could be used to target other types of conditions. The first program will focus on Parkinson’s disease and will enter the clinic later this year.

The hope is that stem cell therapy could help reverse degenerative diseases like Parkinson’s, which affects 7 million patients around the world.

Bayer’s focus on iPSCs differs it from several of its pharma peers, which have invested in T cell-based cancer therapies.

In addition to BlueRock and Century, Bayer has set up a joint venture with CRISPR Therapeutics, launching Casebia Therapeutics in 2016.