Bayer to Make U.S. Drug Development a ‘Cornerstone’

Bayer AG is doubling down on pharmaceutical development in the U.S. with a $1 billion investment to be spread across key life science hubs, including San Diego’s “Biotech Beach.”

“We want to build the United States to be a corner stone for Bayer. We’ve historically been – given the size of our company – under-indexed here,” said Sebastian Guth, president of Bayer’s pharmaceuticals division in the Americas region. “We’ve essentially embarked on a transformative growth journey to build our business and our presence here in in the United States to scale.”

The $1 billion investment will focus on expanding Bayer’s presence in research and development – “an area where San Diego plays a very significant role,” Guth said. “We see San Diego to be a hub which we are expanding as we speak.”

Guth recently visited San Diego at the end of April to meet with leaders at Vividion Therapeutics, a San Diego biopharmaceutical company developing precision therapeutics for previously undruggable targets that Bayer acquired in 2021 for $1.5 billion.

Vividion is “showing great progress,” Guth said, adding that the company has “expanded significantly over the last 12 months.” Currently, the company has 200 people and with Bayer’s added investment, that number is anticipated to grow to 230 by the end of the year.

“This is an exciting time for Vividion,” said Aleksandra Rizo, M.D., Ph.D., president and CEO of Vividion Therapeutics. “As we continue to make cutting-edge advancements in oncology in our discovery research part of the organization, we are excited to build our development capabilities together with Bayer as we prepare to file Investigational New Drug Applications (IND) in the United States for two of our high-profile cancer targets this year. We look forward to watching these progress as we seek to bring new breakthrough discoveries for cancer patients to address unmet medical needs.”

Beyond R&D, the investment will also be used to bolster the company’s U.S. commercial organization, with plans to grow its pharmaceutical marketing team here 75% by 2030. The company recently brought to market two new medicines – prostate cancer therapy Nubega and chronic kidney disease treatment Kerendia.

Venture Investments

In addition to the $1 billion investment into marketing new drugs and R&D at its U.S. companies like Vividion, Bayer is also in the middle of deploying funds from the company’s venture investment arm, Leaps by Bayer.

“We’ve deployed through Leaps by Bayer, $1.7 billion since 2015 and announced early last year that we would be deploying a further $1.4 billion until the end of 2024,” Guth said. “We’re very committed to identifying great science and advancing that science in whatever form of partnership makes most sense.”

In September of last year, Leaps by Bayer was a key investor in a $165 million Series A for Capstan Therapeutics, Inc. – a San Diego- and Philadelphia-based company advancing precision  in vivo  cell engineering to develop therapeutics for a broad range of disease categories with unmet or underserved clinical need.

In 2020, Bayer licensed Daré Bioscience’s non-hormonal contraception product Ovaprene with a modest investment and the equivalent of two full-time employees to work on the program. Following the completion of the pivotal clinical study, Bayer has the right to make the exclusive license to commercialize Ovaprene in the U.S. effective by making an additional payment of $20 million. Daré will also be entitled to receive commercial milestone payments potentially totaling $310 million, in addition to double digit tiered royalties on net sales.

“We believe Bayer is best positioned to maximize the market opportunity for Ovaprene, which has the potential to be a first-in-category product for women, as Bayer has with other first-in-category products,” said Daré CEO Sabrina Martucci Johnson, at the time. “This agreement provides Daré the opportunity to immediately benefit from Bayer’s expertise in development, regulatory, and commercialization, to unlock the program’s full value similar to other innovative contraceptive brands.”

‘Biotech Beach’

Leaps by Bayer was also lead investor in Bloom Science’s $12 million Series A in 2021. Bloom is developing microbiome-based therapies targeting the gut-immune-brain axis, an interconnected network comprised of microbes in the gastrointestinal tract, the host immune system, the central nervous system and the brain.

“This investment by our preeminent global syndicate fuels the further development of Bloom’s pipeline and represents a significant opportunity to ally with like-minded investors who share our ambitious goals,” said Bloom Science CEO Christopher Reyes, Ph.D.

Bloom’s ambitious goals are beginning to be met. At the end of April, the company announced full recruitment of a Phase 1 study for a live biotherapeutic product to treat a rare pediatric epilepsy disorder.

“There’s great science happening here. This is a very vibrant ecosystem,” Guth said of San Diego, which he described as “Biotech Beach.”

“What San Diego offers is a very, very deep expertise and academic strength,” he added. “Also, a funding environment that is attractive with venture capital and big pharma looking at San Diego and investing in San Diego – I think all of that make San Diego a very attractive destination for continued investment.”

Bayer AG

Founded: 1863
CEO: Werner Baumann
Headquarters: Leverkusen, Germany
Business: Multinational pharmaceutical and biotechnology company
Stock: BAYRY (OTC US)
Revenue: FY2022: $55.7 billion (50.7 billion euros)
Employees: 101,000+
Website: www.bayer.com/en/
Notable:   In 1899, Bayer launched the compound acetylsalicylic acid under the trademarked name aspirin.