Bayer reloads Leaps with €1.3 billion to step up investments in biotech innovation

Over the past seven years, Bayer’s investment arm has infused 50-plus companies with more than €1.3 billion. Leaps by Bayer is accelerating its dealmaking pace and Bayer is committing another €1.3 billion, which the multinational corporation estimates will fuel its investment vehicle for two more years.

Bayer announced the capital commitment on Friday during the company’s Breakthrough Innovation Forum, an event that covered the corporation’s plans in healthcare and agriculture. Those two fields were the core focus areas when Bayer formed Leaps in 2015, aiming to invest in companies developing breakthrough solutions to big challenges facing humanity, challenges that the corporation termed “leaps.” At the start, Bayer identified 10 leaps. The healthcare leaps span genetic diseases; organ and tissue replacement; cancer; neurological disorders; autoimmune diseases and inflammation; and the application of data to health.

Leaps has not tipped its hand on its plans for future investments. But if Bayer’s dealmaking in recent years is any indication, cell and gene therapies are likely bets. In 2019, Bayer fully acquired BlueRock Therapeutics, a cell therapy developer it had formed three years earlier as a joint venture with venture capital firm Versant Ventures. A BlueRock cell therapy in development for Parkinson’s disease began clinical testing last year. BlueRock develops “off-the-shelf” therapies from induced pluripotent stem cells. The experimental cell therapy DA01 is comprised of neurons that produce dopamine that Parkinson’s patients lack. These cells are surgically transplanted in the brain, where it’s hoped they will produce dopamine and potentially offer a superior alternative to the older dopamine substitutes that are part of the current standard of care.

Bayer’s gene therapy investment includes the commitment of up to $4 billion to acquire AskBio, a gene therapy biotech whose pipeline most advanced programs are for Parkinson’s and the neuromuscular disorder Pompe disease. And earlier this year, Bayer struck up a partnership that enables it to use Mammoth Biosciences’ CRISPR to develop new in vivo gene editing therapies. The initial focus of the Mammoth alliance is liver diseases. Bayer hasn’t abandoned traditional small molecule drugs, but its toolbox for discovering them. Last August, Bayer paid $1.5 billion up front to acquire Vividion Therapeutics, a biotech whose technology finds binding pockets on proteins that had been considered “undruggable.”

In an interview during the J.P Morgan Health Care Conference in January, Christian Rommel, the head of research and development of Bayer’s pharmaceuticals division, told MedCity News that Bayer’s investments are part of a broader strategic transformation oriented around innovative new medicines, some of them in new modalities. Rommel said Bayer will look for additional acquisitions or partnerships that fit this strategy.

“It’s now in our DNA,” he said. “We will continue to look for things that enhance our capabilities and success of our pipeline.

Cell therapy investments by Leaps include Indapta, a biotech that is researching therapies employing natural killer immune cells. The most recent Leaps cell therapy investment is Affini-T Therapeutics. In late March, Leaps co-led a $175 million investment the startup, which is based on cell therapy research from the Fred Hutchinson Cancer Research Center.

Leaps has also deployed its cash toward artificial intelligence. It was among the investors in AI-based biotech company Recursion, which went public last year. Other companies whose AI drug discovery work has financial backing from Leaps include Dewpoint Therapeutics, which employs AI to develop biomolecular condensate drugs. Leaps has also shown interest in new approaches to developing protein drugs, co-leading the investment rounds of GRObio and Gandeeva Therapeutics.

The interest of Bayer’s investment arm in AI extends to healthcare software. Last summer, Leaps led a $90 million investment in Ada, a German startup that is developing AI-based software for checking symptoms. Leaps is also an investor in Transcarent, a healthcare navigation formed started by Livongo Health founder Glen Tullman.

Photo by Flicker user Bex Walton via a Creative Commons