Bayer is making a $335 million wager on the future of gene editing. The pharma company has committed $300 million in research support to a new joint venture with CRISPR Therapeutics that will operate out of Cambridge, MA. And the biotech upstart is grabbing a $35 million equity investment from Bayer, which also signaled a big appetite for more life science deals.
|CRISPR CEO Rodger Novak|
The joint venture doesn't have a name yet, but it does have a trio of disease targets: blood disorders, blindness and congenital heart diseases. Their plan is to develop new programs and technologies for this work, with the biotech keeping a 50% interest in the new venture while gaining access to new delivery technologies and Bayer's protein engineering know-how.
Bayer says it will invest a minimum of $300 million in R&D over a 5-year period. Bayer also gets an extra advantage, keeping the fruits of their work for nondrug businesses like agriculture.
Under the deal, Bayer's Alex Bouchon will be made the interim CEO while CRISPR CEO Rodger Novak will preside as chairman of the board. Bouchon is also the head of the Bayer LifeScience Center (BLSC) and new group inside Bayer that has been charged with hunting down new life science deals.
|Bayer CEO Marijn Dekkers|
CRISPR is one of a handful of gene editing startups promising to radically change the way disease is treated by altering the genes involved in disease. Editas was the first to get started, with Intellia joining a pack founded by three key pioneers: Jennifer Doudna out of UC Berkeley, Feng Zhang out of MIT and Emmanuelle Charpentier out of Umea University. Charpentier provided the tech foundation for CRISPR, which is based in Switzerland but placed the bulk of its operations in the hot biotech hub in Cambridge, MA.
All three biotechs have been named Fierce 15 companies. And all three have attracted major alliances with Big Pharma and Big Biotech. Novartis ($NVS) is closely allied with Intellia, while CRISPR has also inked deals with Vertex ($VRTX) and Celgene ($CELG).
Reuters reported ahead of the pact that Bayer and its new dealmaking team inside the BLSC have their sights set on some big deals as the company looks to line up new life sciences acquisitions. But Bayer's immediate goals may be outside of drug development. Citing banking sources, Reuters reports that Bayer is interested in Zoetis ($ZTS), an animal health company, as well as Pfizer's ($PFE) consumer health division.
"Bayer and CRISPR Therapeutics are philosophically and financially aligned in our mission to develop game-changing or possibly curative treatments for serious human genetic diseases," said Bayer CEO Marijn Dekkers in a statement.
- here's the release
Special Reports: FierceBiotech's 2014 Fierce 15 - Editas Medicine | FierceBiotech's 2015 Fierce 15 - CRISPR Therapeutics - Intellia Therapeutics