German pharmaceutical company Bayer is now planning to expand its cell therapy portfolio with the full acquisition of cell therapy company BlueRock Therapeutics. The company originally established the biotech firm with Versant Ventures in 2016.
Bayer currently owns a 40.8 percent stake in BlueRock Therapeutics, with shares being held by its Leaps by Bayer venture arm. The company is apparently unsatisfied with owning just a portion of the biotech firm, which is reportedly why it plans to fully acquire it.
The move to purchase the entirety of a company it had helped establish is actually a first for the German firm.
According to reports, Bayer is willing to pay up to $240 million upfront for the rest of the company's shares. This will include an outright purchase of Versant Ventures' stake in the company and those being held by BlueRock's management. The amount that Bayer is willing to shell out for the rest of the shares essentially values BlueRock at $1 billion.
Under the deal, which is expected to be finalized within the third quarter of this year, Bayer agreed to shell out an additional $360 million for BlueRock. However, the additional money will only be released if Bluerock manages to reach certain milestones for its various programs.
With the full acquisition of the company, Bayer will essentially own all of the rights to BlueRock's various cell therapy treatments. BlueRock is currently working on several treatments for diseases ranging from neurodegenerative disorders like Parkinson's to cell therapy treatments for heart failures.
The purchase of the company has been seen by some as a big gamble on Bayer's part, seeing as that most of the treatments that have been developed by BlueRock have yet to undergo human trials. The company's cell therapy treatment for Parkinson's, for example, is still slated for human study later this year.
According to the president of Bayer's pharmaceuticals division, Stefan Oelrich, the company does understand the risks involved in the development of early-stage pharmaceutical treatments. However, Bayer is apparently confident In BlueRock's extensive portfolio in the lucrative space and its capabilities of producing results.
BlueRock is one of the leading companies that are working on stem cell treatments that basically use healthy donor cells to treat a wide variety of diseases.
The company also boasts the capability of editing stem cell genes to allow the immune system to accept the new cells more readily. The pluripotent stem cells used by BlueRock are fully programmable to become any type of cells within the human body. Through this method, the treatments can be used to replace damaged or lost cells such as neurons in Parkinson's patients or cardiac tissue in those with heart problems.