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Bayer to buy AskBio for $2B in bid to become a gene therapy player

Bayer has agreed to acquire Asklepios Biopharmaceuticals, a privately held gene therapy developer formed nearly two decades ago by one of the field’s pioneers, University of North Carolina researcher Jude Samulski.

The German healthcare conglomerate will pay $2 billion in cash for AskBio, which has several programs in preclinical and early development as well as its own contract gene therapy manufacturing business. The deal’s value could as much as double if AskBio’s research hits certain development milestones.

The buyout should help establish Bayer as an emerging player in the cell and gene therapy field, something it’s sought to accomplish through dealmaking. A partnership with, and then later buyout of, BlueRock Therapeutics gave Bayer off-the-shelf cell therapy technology, while the AskBio deal hands it a foundation on which to build a broader gene therapy business.

Large pharmaceutical companies have made their interest in gene therapy increasingly clear over the past several years. Drugmakers like Novartis, Roche, Pfizer and Johnson & Johnson have each made high-dollar bets on the field, either through acquisitions or through strings of partnerships and smaller deals.

Bayer’s planned takeover of AskBio adds the German company to the growing list.

AskBio is an unusually large, privately held gene therapy developer with a wide reach. The company was formed in 2001 by Samulski, a UNC scientist and pioneer in the development of gene therapy delivery tools known as adeno-associated viruses, or AAVs. In its early days, AskBio relied on angel investing and backing from the Muscular Dystrophy Association, as interest in gene therapy had waned following several high-profile setbacks.

Over the past decade, however, technical advances have fueled a renaissance in gene therapy research and led to the approval of multiple gene therapies. AskBio has grown during that time, spinning some of its work out into companies that were later acquired.

Baxter, for instance, bought Chatham Therapeutics in 2014 for hemophilia gene therapies that stalled within Shire but are now owned by Takeda. Pfizer acquired AskBio spinout Bamboo Therapeutics in 2016 for a Duchenne muscular dystrophy gene therapy that’s now on the cusp of late-stage testing.

Returns from those buyouts helped AskBio fund the creation of its own AAV manufacturing capabilities, a critical step for treatments which are complex and expensive to produce. That, in turn, led to the development of a pipeline of gene therapies for neurological, neuromuscular and metabolic diseases, and a $225 million investment from TPG Capital and Vida Ventures in 2019 to support it.

Three programs, for Pompe disease, Parkinson’s and congestive heart failure are now in early human trials. AskBio also has operations in Europe, and has formed partnerships with companies like Editas Medicine, SQZ Biotech and Selecta Biosciences, each focused on overcoming some of gene therapy’s limitations.

That work will now continue under the ownership of Bayer. As with the 2019 buyout of cell therapy maker BlueRock, Bayer intends to allow AskBio to operate as an independent unit. But Bayer will lean on AskBio to become its gene therapy arm, highlighting in a statement both the biotech’s pipeline and its manufacturing capabilities, which may “form the foundation of future partnerships” for AAV gene therapies, the company said.

“We’ve crossed a threshold where we know what to do and how to do it, we just need bigger muscle [behind us],” said AskBio’s Samulski, in an interview.

“Instead of going to Wall Street and every quarter trying to make milestones, we have one financial partner with which we’re trying to bring this technology to fruition.”

Bayer also noted AskBio’s technology may lend itself to treating diseases caused by more than one genetic mutation, a step beyond the monogenic disorders which early gene therapies have largely targeted.

About 75% of the up to $2 billion in milestone payments Bayer offered AskBio would be due over the next five years, Bayer said. The deal should close in the fourth quarter.