Bayer inks $425M upfront KaNDy buyout to challenge Astellas for menopause market

Bayer Headquarters site Leverkusen, Germany
Bayer's headquarters (Bayer)

Bayer has struck a $425 million upfront deal to buy KaNDy Therapeutics in the belief its treatment for menopause-related hot flashes has blockbuster potential. KaNDy recently completed a phase 2b trial of neurokinin-1,3 receptor antagonist NT-814, teeing it up to start a pivotal study next year.

British biotech KaNDy spun out of NeRRe Therapeutics, a GlaxoSmithKline spinout, in 2017. Within months, reports emerged of Allergan’s interest in buying the startup for more than $400 million in upfront and milestone payments. That deal never materialized. But two years later, KaNDy has used the growth in evidence of the safety and efficacy of NT-814 to land a bigger buyout bid.

Bayer took the other side of the deal, committing to $425 million upfront and $450 million in R&D and regulatory milestones. KaNDy’s investors, which include Forbion Capital Partners and OrbiMed, are set to receive “potential additional triple digit million sales milestone payments,” too. 

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The outlay will give Bayer control of NT-814, an oral, non-hormonal drug designed to treat vasomotor symptoms due to menopause by modulating estrogen-sensitive neurons in the hypothalamus. In January, KaNDy shared phase 2b data that linked the drug to statistically significant improvements in hot flash frequency, menopause-specific quality of life scores, mood and sleep quality. 

KaNDy immediately began talking up the readiness of NT-814 for phase 3. However, rather than raise cash to take the drug forward itself, KaNDy and its investors have chosen to cash out and leave Bayer to run the pivotal program. Bayer experts to close the deal in September and enter phase 3 next year.

If the phase 3 validates the safety and efficacy of NT-814, Bayer thinks it can generate sales north of $1 billion by serving the up to 75% of women aged over 50 who experience vasomotor symptoms such as hot flashes and night sweats. The symptoms negatively affect sleep and quality of life. 

Hormone therapy can treat the symptoms. However, hormone therapy raises the risk of cancer and thrombosis. Hormone therapy can also take several months to work and fail to address the effect of menopause on sleep quality. Those issues led KaNDy, and now Bayer, to identify an opportunity to improve on the treatment options available to menopausal women with vasomotor symptoms.

Other drug developers have spotted the same opportunity. In 2017, Astellas paid €500 million ($588 million) to acquire Ogeda. Astellas started a phase 3 trial of the neurokinin-3 receptor antagonist at the heart of the deal last year. Millendo Therapeutics made the early running with a neurokinin-3 receptor antagonist it licensed from AstraZeneca, only to axe the asset as “the risk/benefit profile no longer indicated continued development.”

NT-814 is an antagonist of both the neurokinin-3 receptor targeted by Astellas and Millendo’s assets and the neurokinin-1 receptor. KaNDy went after both targets in the belief neurokinin-1 may also be involved in the control of vasomotor symptoms. 

At Bayer, NT-814 will slot into a growing pipeline of women’s health prospects. Earlier this year, Bayer expanded an existing women’s health collaboration with Evotec to support development of drugs to treat polycystic ovary syndrome, an endocrine disorder that affects pre-menopausal women. Around the same time, Bayer landed the U.S. license to Daré Bioscience’s experimental hormone-free, monthly vaginal contraceptive. 

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