Bayer seeks to unlock potential of precision medicines with $1.5B acquisition

Bayer AG's $1.5 billion acquisition of Vividion Therapeutics Inc. will give the German pharmaceutical and chemicals giant the opportunity to create therapies targeting 90% of disease-causing proteins, CEO Werner Baumann said.

Under the terms of the deal, which is expected to close in the third quarter, Bayer will pay San Diego-based Vividion up to $500 million in milestone payments in addition to the $1.5 billion up-front purchase price. Vividion, a private company, has raised $275.33 million in five disclosed funding rounds since April 2016, according to data compiled by S&P Global Market Intelligence. Investors include Arch Venture Partners LP, BlackRock Inc. and Versant Venture Management LLC.

Vividion uses its chemoproteomic screening platform to produce small molecule therapies that can enter cells relatively easily. Its lead preclinical programs focus on proteins linked to cancer and inflammatory conditions like irritable bowel disease.

"Vividion's technology is the most advanced in the industry, and it has already proven its applicability preclinically in oncology and immune-related diseases with potential to expand into other and additional therapeutic areas," Baumann told analysts in an earnings call on Aug. 5, the same day the deal was announced.

"To us, Vividion is really unique, and at the same time, a world-leading platform to address biological targets that no one else has been able to address," Baumann said. "So it's 90% of all known disease-causing and modifying proteins that we can now address that before couldn't be addressed."

Bayer recently formed its own cell and gene therapy platform as part of a strategy to transform its pharmaceuticals division, the company said, highlighting the launch of an early-stage clinical trial for its investigational Parkinson's treatment DA01.

The Vividion deal is Bayer's biggest pharma acquisition since buying gene-therapy company Asklepios BioPharmaceutical Inc. for $2 billion in October 2020. The merger brought another phase 1 Parkinson's treatment under Bayer's control.

Credit Suisse is Bayer's financial adviser for the Vividion deal, with Baker McKenzie serving as legal counsel. Centerview Partners is serving as financial adviser to Vividion, while Cooley LLP is serving as legal counsel.

Second-quarter earnings

Bayer reported a second-quarter net loss of €2.34 billion — an improvement on the €9.55 billion loss in the previous-year period.

Despite the loss, resulting from litigation surrounding the weedkiller glyphosate, the company reported a 12.9% year-over-year increase in second-quarter sales, adjusted for currency fluctuations and portfolio changes. Bayer raised its guidance for the year to a 6% increase in sales to about €44 billion on an adjusted basis, up from a previous forecast of 3% growth.