German multinational pharmaceutical company Bayer AG will spend as much as USD 4 billion in a bid to foray into gene therapy. This will be done by acquiring US biotech company Asklepios BioPharmaceutical Inc. The move will bolster the pharma division of the company with experimental gene therapies. Reports suggest that the upfront price of USD 2 billion will be paid by the German chemical giant. Another USD 2 billion will be paid in on success-based milestone payments. Bayer said that the RTP gene therapy company will operate autonomously. The company has around 300 employees. It is developing gene therapies for diseases like congestive heart failure and Parkinson’s.
The Gene therapy market is expected to grow to nearly USD 7 million in the next seven years or by 2027. The market was just USD 2 billion in 2019. The deal will place Bayer in a much better position in this growing market. According to Grand View Research, there are several clinical trials of gene therapy products that are underway. AskBio was founded in 2001 and is committed to improving the lives of lakhs of people with genetic disorders. AskBio uses adeno-associated viruses or AAVs to carry therapeutic genes into human cells. While making the announcement, AskBio cofounders expressed confidence in the firm’s potential to meet the growing demand for gene therapies. They also talked about how Bayer will contribute to the task.
AskBio CEO Sheila Mikhail said that the worldwide reach of Bayer will accelerate the production of gene therapies. The company is of the opinion that the deal will augment its efforts. It is worth mentioning that AskBio had raised USD 225 million from Vida Ventures and TPG Capital last year. They too minority stakes in the company. Mikhail said that it was the first-ever fundraising for the company. The deal is most likely to be closed by the end of this year. Once completed, it will be the biggest acquisition for the health care operations of Bayer.