Marianne De Backer, PhD, Head of Business Development & Licensing of Bayer’s Pharmaceuticals Division

During the recent virtual J.P. Morgan 39th Healthcare Conference, Bayer predicted that three of its drugs could exceed $1 billion in sales starting this year. Bayer cited four possibilities:

  • Nubeqa® (darolutamide)—co-developed with Orion and launched in the U.S. and Europe for non-metastatic castration-resistant prostate cancer.
  • Vericiguat—the cardiovascular drug co-developed with Merck & Co. that faces an FDA action date on January 21.
  • Finerenone—under FDA and European Medicines Agency review for chronic kidney disease and type 2 diabetes, with U.S. launch expected in the third quarter.
  • NT-814—for frequent menopausal symptoms, which Bayer acquired when it bought KaNDy Therapeutics for up to $875 million. Phase III trials will start this year.

“Our late-stage pipeline now has the potential to deliver three new blockbusters within the next three to four years,” said Stefan Oelrich, Head of Bayer’s Pharmaceuticals Division.

Oelrich predicted peak sales potential for Bayer of more than €500 million ($604 million) for vericiguat, and at least €1 billion ($1.2 billion) for the other three. However, that won’t be enough to recoup the €6 billion ($7.2 billion) Bayer begins to lose this year when its top two best-selling drugs start losing patent protection: Xarelto® (rivaroxaban), the blood thinner co-marketed with Janssen Pharmaceuticals; and Eylea® (aflibercept) the retinal disease treatment co-marketed with Regeneron Pharmaceuticals.

Bayer faces some other strong headwinds. Its $63-billion acquisition of Monsanto forced Bayer to shoulder costly legal battles over the herbicide Roundup, with the company saying in November the cost to resolve them will add $750 million to a $10.9 billion settlement announced in June. Also, Bayer’s agriculture unit faces shrinking sales due to reduced demand for biofuel and shrinking crop prices blamed on COVID-19. Last September, Bayer said it would cut €1.5 billion ($1.8 billion) in expenses, and raised the possibility of eliminating jobs and selling some operations.

In recent years, Bayer has doubled down on replenishing its pipeline through internal R&D and external deals. Bayer has committed to building a leading presence in cell and gene therapy (CGT), in part by acquiring gene therapy developer Asklepios BioPharmaceutical (AskBio) last year for up to $4 billion. AskBio joins cell therapy developer BlueRock Therapeutics, which Bayer purchased in 2019 for up to $600 million.

Bayer co-established BlueRock through its Leaps by Bayer equity investment arm, created to establish new companies and invest in early-stage technologies with breakthrough potential to “fundamentally change the world for the better.” Leaps by Bayer stepped up investment, funding 15 companies between December 2018 and this month, compared with four from 2012–16.

Marianne De Backer, PhD, Head of Business Development & Licensing of Bayer’s Pharmaceuticals Division, recently discussed Bayer’s approaches to pipeline replenishment and business development, with GEN Edge (This interview has been lightly edited for length and clarity).


GEN Edge: Where does innovation fit in within Bayer?

De Backer: As Big Pharma, we have found ourselves a bit in the eye of a storm, right? There is this biorevolution ongoing, and under it, an entire technological revolution. With those two things coming together, there is really no single company that can follow all that innovation that is moving at groundbreaking speed within its own walls. It’s incredibly important to be able to partner, to form networks, to operate in ecosystems.

We realized that in order to be successful in the future, we had to become extremely good at partnering, and we had to elevate our game as Bayer Pharma. We have transformed the way that we partner and changed our governance process. We have an extremely agile process to go through deals. We have an incredible toolkit now, meeting the entrepreneurs and being extremely flexible in the type of deals that we can do with them.

And we have carefully crafted our growth strategy. I’m also the global head of strategy for the pharmaceuticals group of Bayer. Across different areas—oncology, cell and gene therapy, digital health, and so on—we have set out a strategy of how we’re going to grow the business.

Most attention is on the work that we’ve been doing in the cell and gene therapy space. We acquired AskBio last year. Before that, we had already taken a very big equity stake and helped to set up Century Therapeutics. We acquired BlueRock Therapeutics and invested in Khloris Biosciences. At the end of last year, we entered into our allogeneic cell therapy deal with Atara Biotherapeutics. We’ve started moving into the mRNA field, a very promising field of innovation.

GEN Edge: Bayer expanded into RNA-based COVID-19 therapeutics this month when it agreed to join CureVac in developing its mRNA-based vaccine, CVnCoV. What sparked that partnership?

De Backer: We are extremely excited about the mRNA technology. No-one would have guessed that you can go from a viral genome to a vaccine in less than a year. That is truly transformational in the industry, not just in the vaccine space.

On this specific partnership, CureVac reached out to us and inquired whether we’d be interested to help them bring their vaccine to market. When CureVac came to us and said they really needed our capabilities, we didn’t want to stand on the sidelines. We really wanted to jump in and help them.

We want to make our capabilities available because we think there’s this tremendous need. There are estimations that between 12 billion and 14 billion vaccine doses are going to be required to really deal with this pandemic globally. So, it makes sense to help CureVac in bringing, hopefully, 300 million doses to the market this year, and 600 million next year.

GEN Edge: Why did Bayer choose patience over speed and not jump into the COVID-19 field through a partnership earlier?

De Backer: We are not a player in the infectious diseases space or the vaccine space. So we’ve been focused on our areas of strategic focus.

GEN Edge: Turning to cell and gene therapy, how does Bayer plan to grow that business into an industry leader?

De Backer: The way that we approach cell and gene therapies is from a platform perspective. We have a number of programs in clinical development, they’re quite diverse in what kinds of diseases they tackle. Some of them tackle rare diseases like Pompe disease, in the case of AskBio’s pipeline. We’re also exploring the gene therapy platform, for example, for polygenetic diseases and pathway diseases. We’re looking at Parkinson’s disease and heart failure.

We’re not interested in just pursuing niche rare diseases. We’re looking to see how these platforms can be deployed to broader indications, but it’s fair to say that while we have focused a lot on oncology, cardiovascular, women’s healthcare, and so on, this platform allows us to venture into other diseases.

For example, with both AskBio and BlueRock, we have clinical programs in Parkinson’s disease. We just got FDA approval for a Phase I study with BlueRock’s technology for differentiating pluripotent stem cells toward dopaminergic neurons to treat Parkinson’s disease. Again, we are not focused strongly on neurological diseases, per se, but we really want to go where the science takes us with these platforms; that’s really the aim of bringing them in.

GEN Edge: Why does Bayer take an arm’s length approach to overseeing its acquired companies in cell and gene therapies?

De Backer: When we acquire these companies and these platforms, we want to make sure that the companies, entrepreneurs and the scientific teams continue to have a lot of independence in how they drive their science. As the mothership, we’re not telling AskBio or BlueRock where they should focus. The science is really driven by the companies. There’s a Bayer board being put into place that offer strategic oversight, but we don’t want to disrupt the magic, so to speak. We are there to offer a lot of therapeutic insight. Obviously, we have a lot of market knowledge.

Some of our technologies that they can benefit from include our small molecule library. For example, in 2019 AskBio acquired a company called Synpromics that has synthetic promoters that can be activated through small molecules. Bayer has one of the largest small molecule libraries in the industry, with 4 million compounds. So, there’s a lot of synergy, but we want to make sure that the companies stay in the driver’s seat in where they go with their science.

GEN Edge: How essential is Bayer’s arm’s length approach to retaining talent in the acquired companies?

De Backer: Yes, we see a lot of benefits. We are operating—not just Bayer but big pharma in general—in an extremely competitive space. In 2020, there were more than 70 IPOs, more than $17 billion in new VC funding becoming available. There was more than $50 billion invested in companies. So there’s a lot of access to capital and private companies have a lot of opportunity to seek funding—they don’t necessarily need to partner with a big pharma company. We have to elevate our game and come up with something that is differentiating.

We bring a lot of knowledge in therapeutic areas. For example, Bayer is the leading organization in cardiovascular. One of the conversations we had with AskBio is that they have a heart failure program. We can really add a lot of insight and knowledge to make that program a success. At the same time, the co-founder of AskBio was saying, “You can’t keep a race horse in the barn.” They want to have that independence to develop their science and progress their programs. It’s critical to keep the talent. These are entrepreneurs, they have a different way of working, they work at a different pace, and we don’t want to disrupt that magic. We want to make sure that they can focus on what they do best. We’ll be there to offer whatever is helpful to progress the programs and get them to patients.

GEN Edge: AskBio’s assets acquired by Bayer included its gene therapy platform and CDMO operation. How significant does Bayer view that CDMO?

De Backer: It’s absolutely essential. In this business, the process is the product. When we set out our strategy for becoming a leader in the cell and gene therapy space, we realized first of all this is an incredibly broad field, and you can’t do everything. So decided to focus on four big areas. One area was iPSC [induced pluripotent stem cell]-based cell therapy; that’s BlueRock. We wanted to go into allogeneic CAR [chimeric antigen receptor] therapies for solid tumors, that’s what we did with the Atara deal. We wanted access to the latest gene-editing technologies. And then the fourth one was gene augmentation, and that’s where AskBio eventually came in.

When we set out our strategy for what type of company we wanted to acquire in the gene augmentation space, we had certain criteria. First, we wanted to work with real pioneers in the field. We wanted a platform that had proven that it worked, with assets that were on the market. We wanted to have a company that had very extensive manufacturing capability. And ideally, we wanted a company that was continuing to innovate in that technological field.

Taken together, there’s not a lot of companies out there. We arrived at AskBio as our top target company to go after, and the CDMO business was an absolutely critical component. It’s a structured deal—$2 billion upfront, and $2 billion that is tied to milestones. Those milestones are very carefully crafted, and some of them are also linked to the CDMO business.

We also believe that there’s going to be a shortage of capacity in the world for these kinds of capabilities. The fact that this is not just serving our programs but is a CDMO business will be a source of additional income.

GEN Edge: You mentioned partners for every CGT program except genome editing. It looks like there’s some room for further growth there?

De Backer: Yes, we just made a $65-million Series A equity investment in Metagenomi, which is a gene editing partner. But you’re absolutely right: In the gene editing field, we’re continually looking for additional partners, and that will be a subject of our activities during the course of this year. Also, in the area of allogeneic CAR, we have now a CAR-T deal, but we’re still looking at potentially other ways to target solid tumors.

GEN Edge: Bayer is advancing some of these partnerships through Leaps by Bayer. Leaps recently led the $105-million Series B financing of Senti Biosciences, which engineers gene circuits for improving cell and gene therapy products. How does Leaps help Bayer in pipeline development?

De Backer: Leaps is typically investing in transformative innovation that might not be ready for us to take inside. That’s what they have been doing in a number of different areas. I mentioned Metagenomi, Senti, the generation of Century Therapeutics for iPSCs, for oncology, and so on. Those are all interesting technologies, but a little bit too early for us to act upon through partnerships at this moment in time.

We really see Leaps as a toolbox, which allows us to take different bets, to placing equity in those companies. As those things mature, we will see what of these are going to be relevant for us to enter into collaborations with or to acquire.

GEN Edge: What lessons from 2020 is Bayer applying in 2021 and going forward?

De Backer: 2020 was such a unique year. The majority of the partnerships we entered into were entirely virtual. For example, in the AskBio acquisition, we never met anyone from the company in person! Our due diligence was done by them walking around with iPads through the manufacturing facilities. Every single negotiation—six weeks from non-binding offer to signing—every day, Sheila Mikhail, the CEO, and myself were in Zoom meetings, but we’ve never met.

I really didn’t think that was possible—you could acquire a company in a virtual way. But it shows how extremely resilient and inventive our industry is. At least when we acquired KaNDy Therapeutics, we’d met the team before at JP Morgan [Healthcare Conference in 2020], and then acquired them virtually. But with AskBio, from the outreach to anything that has happened since we’d never seen each other in real life, which makes it unbelievable.

GEN Edge: Given the uncharted waters of virtual deal making, what is likely to continue being Bayer practice, even after the pandemic ends?

De Backer: As a dealmaker, I used to travel 75% of my time, roaming the world and meeting entrepreneurs and biotechs and so on. I’m looking forward to doing that again, to some extent, but we now know that you can do deals in a very effective way, fortunately. And you can actually build trust virtually, which I’d not anticipated. If you’d asked me that a year ago, I would have said that was impossible. But you can really make that work.

For the future, we will probably have a bit more of a hybrid partnering model, where some of it will be face to face, some will be virtual. I don’t think people go back to what we did before, which was crazy.

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