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Bayer Acquires Cell Therapy Specialist BlueRock Therapeutics.

M2 EQUITYBITES-August 12, 2019-Bayer Acquires Cell Therapy Specialist BlueRock Therapeutics

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12 August 2019 - German pharmaceutical and life sciences company Bayer AG (OTC: BAYZF) and US-based biotechnology company BlueRock Therapeutics have inked an agreement under which Bayer will fully acquire BlueRock Therapeutics, the companies said.

The implied total company value is up to USD 1bn, inclusive of 40.8% stake currently held by Bayer.

BlueRock is focused on developing engineered cell therapies in the fields of neurology, cardiology and immunology, using a proprietary induced pluripotent stem cell platform.

Following a 2016 joint venture with Versant Ventures to establish BlueRock Therapeutics, Bayer will acquire the remaining stake for approximately USD 240m in cash to be paid upfront at closing and an additional USD 360m payable upon achievement of pre-defined development milestones.

With Bayer currently holding 40.8% stake, the investment corresponds to a total company value of BlueRock Therapeutics of approximately USD 1bn.

The closing of the transaction is expected during 3Q19.

The convergence of cell biology and engineering has enabled an important new treatment modality for patients, with significant clinical benefit demonstrated in diseases previously deemed intractable.

Especially for degenerative diseases where cell loss and low self-repair potential occur, such as cardiac muscle loss or degenerative neurological disorders, regenerative cell therapy offers unprecedented potential to have a significant benefit for patients.

BlueRock Therapeutics' portfolio of cell therapies is currently focused on neurology, cardiology and immunology with a lead program in Parkinson's disease expected to enter the clinic by the end of 2019.

Among neurodegenerative disorders, Parkinson's disease is the fastest growing in prevalence, disability and mortality. The primary and most debilitating symptom of Parkinson's disease is a progressive loss of motor control.

Stem cell therapy could re-innervate the human brain and reverse degenerative disease, potentially restoring motor function to more than seven m of patients suffering from Parkinson's disease globally.

In 2016, Bayer and founding investor Versant Ventures established BlueRock Therapeutics with a USD 225m series A Financing as part of the Leaps by Bayer unit.

With this transaction, Bayer will own full rights to BlueRock Therapeutics' CELL+GENE platform, including a broad intellectual property portfolio and associated technology platform including proprietary iPSC technology, gene engineering and cell differentiation capabilities.

In addition to its current focus, BlueRock Therapeutics' platform brings the opportunity to extend to other therapeutic areas beyond the current development programs.

To preserve the entrepreneurial culture as an essential pillar for nurturing successful innovation, BlueRock Therapeutics' will remain an independent company, operating on an arm's-length basis.

BlueRock Therapeutics is an engineered cell therapy company with a mission to develop regenerative medicines for intractable diseases. BlueRock Therapeutics' CELL+GENE platform harnesses the power of cells for new medicines across neurology, cardiology and immunology indications.

Its cell differentiation technology recapitulates the cell's developmental biology to produce native cell therapies, which are further engineered for additional function.

Utilising these cell therapies to replace damaged or degenerated tissue brings the potential to restore or regenerate lost function.

BlueRock Therapeutics was founded in 2016 by Versant Ventures and Bayer AG and capitalized with one of the largest-ever series A financings in biotech history by Bayer AG (through its Leaps by Bayer unit) and Versant Ventures. BlueRock Therapeutics' culture is defined by scientific innovation, highest ethical standards and an urgency to bring transformative treatments to all who would benefit.

Bayer is a global enterprise with core competencies in the life science fields of health care and nutrition. Its products and services are designed to benefit people by supporting efforts to overcome the major challenges presented by a growing and aging global population.

In fiscal 2018, the group employed around 117,000 people and had sales of 39.6 bn euros. Capital expenditures amounted to EUR 2.6bn, R and D expenses to EUR 5.2bn.

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Publication:M2 EquityBites (EQB)
Date:Aug 12, 2019
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