Baxter launches a new biotech with the Mayo Clinic in tow

Baxter BioScience President Ludwig Hantson

Baxter ($BAX), soon to spin out its drug business, is seeding a biotech upstart with the help of the Mayo Clinic, divvying up the labors of R&D in hopes of spurring the discovery of new therapies.

Under a three-way agreement, Baxter, Mayo and build-to-sell drug developer Velocity Pharmaceuticals have formed Vitesse Biologics, a new company focused on crafting antibodies and protein-based treatments. Vitesse's work will center on hematology, oncology and immunology, the company said.

Moving forward, each partner plans to contribute its expertise to the Vitesse cause, with Velocity handling preclinical R&D, Mayo running Phase I trials, and Baxter stepping in for late-stage development and commercialization. None of the players is disclosing financial details, but Baxter enters the deal with an exclusive option to acquire each Vitesse asset once it clears Phase I.

Baxter remains on track to split in two by mid-year, keeping its sizable hemodialysis business under the old name while spinning out its biopharma segment into the independent Baxalta. And the Vitesse deal, which loops in multiple stakeholders with an emphasis on collaboration, is a glimpse at how the new company will approach drug development, according to Ludwig Hantson, current president of Baxter BioScience and future CEO of Baxalta.

"By creating Vitesse, our business is executing on a new concept in early stage R&D by leveraging the expertise of industry-leading partners to accelerate the identification and development of novel biologic treatments that could eventually contribute to unmet patient needs while enhancing the Baxalta commercial portfolio," Hantson said in a statement.

Meanwhile, Baxalta is preparing to settle into a 200,000-square-foot space in Cambridge, MA's Kendall Square, a biotech hub home to scores of drug developers and neighboring the likes of MIT and Harvard. The idea, in part, is to cozy up to local innovators in hopes of igniting new partnerships, Hantson has said, as the company looks to expand beyond its core competency in hematology.

- read the announcement