Bayer to buy Vividion Therapeutics for up to US$2b

Leverkusen, Germany

BAYER agreed to buy US biotech company Vividion Therapeutics for as much as US$2 billion, snapping up a developer of promising therapies that only weeks ago filed for an initial public offering.

The German drugmaker will pay US$1.5 billion up front and another US$500 million in potential milestones for the San Diego-based biotech, it said in a statement on Thursday.

The company also raised its profit forecast for the year.

For Bayer, the transaction is the latest in a string of deals intended to bolster innovation at the pharma unit and fuel growth as its top blockbuster medicines face the loss of patent protection.

The company has worked to buoy its presence in cell and gene therapies, especially with the US$4 billion takeover of Asklepios BioPharmaceutical.

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While Vividion is currently developing therapies against cancers and immune disorders, its technology platform - which screens the surfaces of proteins for binding targets that are shallower than drugmakers have previously considered - can basically be applied to any disease area. That could unlock new areas for therapies, since about 90 per cent of known disease-causing proteins can't be targeted by existing medicines, the company says.

Bayer should be able to capitalise on the newly discovered targets thanks to its deep bench of chemists and expansive compound library, said Stefan Oelrich, Bayer's head of pharmaceuticals.

"Vividion is a one-of-a-kind, best-in-class platform," he noted. "If we put our chemistry and our chemists to support them, this is exactly what they need to scale up their business."

Bayer's pharma unit has struggled for attention following the company's US$63 billion takeover of agriculture giant Monsanto in 2018.

That hefty price tag was only the start of the costs, since the deal brought Bayer an increasingly expensive set of legal troubles, above all for the controversial weedkiller Roundup.

The company said last week it may have to spend as much as US$16 billion to resolve litigation on Roundup, which plaintiffs say causes cancer and Bayer insists is safe.

The company on Thursday raised its full-year profit forecast as high commodity prices boosted its crops unit and medicines like the eye treatment Eylea recovered as pandemic lockdowns ended. Core earnings per share could rise to as much as 6.60 euros, it estimated, up from an earlier ceiling of 6.30 euros. BLOOMBERG