Bayer Sells Nebido To Grünenthal Amid Shift In Focus To Cell And Gene Pipeline
Will Sell For Up To €500m
Executive Summary
The major will use funds from the sale of its male hypogonadism product to invest in future innovation, which is likely to focus on high-risk high-reward cell and gene drug candidates.
Bayer AG is selling its androgen and anabolic steroid, Nebido (testosterone undecanoate), to German firm Grünenthal GmbH as part of a broader strategic reshuffling aimed at developing the next generation of cell and gene therapies.
Nebido, a gold standard product for male hypogonadism, will be sold for up to €500m ($502.5m). The product is launched in more than 80 countries to date and has patent protection that will last until March 2024 and May 2027 in Europe and the US, respectively. The sale is expected to close by year end.
Under the terms of the deal, Grünenthal will also acquire the Bayer’s contract business in the US where Endo International plc has licensed Nebido under the brand name Aveed. Grünenthal said the product addition should increase its earnings before interest, taxes, depreciation and amortization by $100m next year.
Nebido is the only long-acting injectable treatment for male hypogonadism, which is characterized by testosterone deficiency that can lead to change in body composition, weakness and erectile dysfunction. It is estimated that one in six men over the age of 50 live with these symptoms. The drug was approved by the US Food and Drug Administration in 2014 but Bayer did not disclose sales in its first quarter earnings report.
Bayer’s business development head Marianne De Backer said the divestment fitted in with the ongoing transformation of its pharmaceuticals business, to focus on “key areas of health innovation.” Proceeds from the sale will support investments in future innovation, De Backer added.
Indeed, the firm has been bulking up its cell and gene therapy pipeline as of late. Bayer kicked off 2022 with a potential $1bn alliance with Mammoth Biosciences to develop therapies for up to five undisclosed conditions using the latter’s in vivo CRISPR-based gene-editing technology. (Also see "Bayer Consolidates Next-Generation Gene Editing Focus With Mammoth Deal" - Scrip, 10 Jan, 2022.)
Last year, Bayer paid $2bn upfront to acquire Asklepios BioPharmaceutical, Inc., a firm focused on AAV-delivered gene therapy. (Also see "Bayer Boosts Gene Therapy Presence With AskBio Buy" - Scrip, 26 Oct, 2020.) Although the high-risk high-reward nature of cell and gene therapy saw its recent withdrawal from a CAR-T alliance with Atara Biotherapeutics, Inc.. (Also see "Bayer Shuffles Atara’s CAR-Ts Out Of Its Cell Therapy Deck" - Scrip, 20 May, 2022.)
Bayer has previously told Scrip that it preferred to take an arms-length approach regarding acquired companies as evinced by the fact that cell therapy developer, BlueRock Therapeutics, continues to operate independently. (Also see "Bayer Pharma R&D Head Tackles Challenge Of Prioritizing Promising Assets" - Scrip, 14 Jan, 2022.) Bayer acquired BlueRock outright for $240m in 2020. (Also see "Bayer Eyes Indications Beyond BlueRock's Initial Focus With $240m-Plus Buyout" - Scrip, 8 Aug, 2019.) Another notable alliance was forged with Ultragenyx Pharmaceutical Inc. to develop the Phase II hemophilia A asset, BAY-2599023, a Factor VIII gene therapy.
Grünenthal Growing Portfolio
Meanwhile, the Nebido acquisition joins a spate of strategic M&A deals inked by Grünenthal since 2016 that have exceeded €2bn ($2.01bn) in value. The German firm, which is traditionally focused on pain relief, acquired Swiss biotech Mestex AG in 2021 through a share and option takeover, nabbing its advanced drug candidate, resiniferatoxin, for pain associated with knee osteoarthritis. The deal value was undisclosed.
Prior to this, Grünenthal bought the rights to several of AstraZeneca PLC marketed products, including EU rights to the hypolipemic, Crestor (rosuvastatin), and global rights (excluding the US and Japan) to the anti-inflammatory painkiller Vimovo (esomeprazole and naproxen).