Bayer said today it has agreed to acquire BlueRock Therapeutics for up to $600 million in a deal designed to catapult the buyer into leadership in cell therapies, nearly three years after joining with healthcare investment firm Versant Ventures to launch the company.

Privately-held BlueRock focuses on developing engineered cell therapies for neurology, cardiology, and immunology disorders—therapeutic areas with degenerative diseases where cell loss and low self-repair potential occur—using the company’s induced pluripotent stem cell (iPSC) platform.

Through the deal, Bayer would own full rights to BlueRock’s CELL+GENE™ platform, which is designed to create stable master cell banks capable of virtually unlimited expansion and differentiation into any cell type in the body, using proprietary bioprocessing and manufacturing techniques. The platform then directs the differentiation of these universal cells into almost any cell type in the human body, recapitulating natural developmental processes.

BlueRock also applies gene editing to engineer the cells, with the goal of locally delivering a high regional concentration of payload with no systemic toxicity. The cells can be engineered to perform a broad range of functionalities including protein production, antibody or cytokine secretion, or local enzyme replacement. Engineering the cells offers an advantage over conventional systemic, nontargeted delivery, according to the company.

Later this year, BlueRock plans to advance its lead clinical program, a Parkinson’s disease therapy, into the clinic. BlueRock reasons that a stem cell therapy for Parkinson’s could restore function to the human brain and thus reverse degenerative disease through the derivation of dopaminergic neurons that have increased dopamine release as they mature—potentially restoring motor function to the more than seven million patients with the disease globally.

Bayer said BlueRock will remain an independent company, operating on an “arm’s-length basis.”

“A major milestone”

“This acquisition marks a major milestone on our path towards a leading position in cell therapy,” Stefan Oelrich, member of the board of management, Bayer AG and president of its pharmaceuticals division, declared in a statement. “In line with our strategy to ramp up our investments in technologies with breakthrough innovation potential, we have decided to build our cell therapy pipeline based on BlueRock Therapeutics’ industry-leading iPSC platform. Ultimately, we are joining forces to deliver new treatment options for medical needs that are still unmet today.”

Bayer committed itself to stepping up investment in breakthrough innovation technologies—as well as more pipeline development—in November 2018, when it announced a restructuring that includes elimination of 12,000 jobs worldwide by the end of 2021.

Yet two years earlier in December 2016, Bayer cited the promise of stem-cell innovation and pipeline growth when it joined with Versant to launch BlueRock with $225 million in Series A financing. BlueRock established research programs that included:

  • Cardiovascular disease partnerships with the McEwen Centre for Regenerative Medicine and the University Health Network, both based in Toronto, and including scientists such as BlueRock co-founder and McEwen Centre director Gordon Keller, PhD, and a founding investigator of the company, Michael A. Laflamme, MD, PhD, a senior scientist at Toronto General Hospital Research Institute.
  • Neurological disease partnerships with scientific co-founders Lorenz Studer, MD, PhD, director of the Center for Stem Cell Biology at Memorial Sloan Kettering (MSK), and Viviane Tabar, MD, chair, department of neurosurgery and Theresa Feng chair in neurosurgical oncology at MSK. Tabar also holds a joint appointment at Weill Cornell Medical College in the departments of neurosurgery and neuroscience.

BlueRock’s platform could be used to extend the acquired company’s pipeline into other therapeutic areas, Bayer added.

Foundation and innovation

Bayer co-established BlueRock through its Leaps by Bayer unit, created to establish new companies and invest in early-stage technologies with breakthrough potential to “fundamentally change the world for the better.”

“This transaction is not only the foundation for an iPSC-based cell therapy portfolio, but also a manifestation of a successful innovation strategy by our Leaps unit to create biotechnological solutions that have truly transformative potential and may cure patients in life-threatening conditions one day,” stated Kemal Malik, Bayer board member for innovation.

BlueRock is headquartered in Cambridge, MA, with operations at the MaRS Discovery District in Toronto, as well as lab and finance operations in New York City. Last year, BlueRock was awarded $1 million by New York State through its Excelsior Jobs program toward its lab operations—specifically, establishing a neuroscience R&D hub for collaborative research with MSK at the Alexandria Center for Life Science, the 728,000-square-foot Manhattan campus operated by Alexandria Real Estate Equities.

Bayer now holds a 40.8% stake in BlueRock. It has agreed to buy out Versant’s remaining stake for approximately $240 million upfront, plus up to $360 million tied to achieving development milestones. The acquisition deal is set to close in the third quarter.

“We have built a premier cell therapy platform at BlueRock Therapeutics, with industry-leading R&D, process development, and manufacturing capabilities,” added BlueRock CEO Emile Nuwaysir, PhD. “With the expertise and support of Bayer, we will be even better positioned to pursue the discovery, development, and commercialization of revolutionary new cell therapies for patients suffering from diseases previously thought of as intractable.”

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