Active ingredient shortly before approval: Menopause drug promises Bayer billions

The pharmaceutical giant Bayer has secured a drug with potential billions. The hormone-free active ingredient is said to relieve symptoms of menopausal women. With the "blockbuster" deal, the Leverkusen-based company is preparing for the future, because important patents will soon expire.

Bayer is strengthening its pharmaceutical business with the purchase of a drug with sales potential in the billions. The Leverkusen-based group is taking over the British biotech company Kandy Therapeutics, thereby securing an active ingredient for alleviating menopausal problems in women, which is to be brought into the decisive final phase of clinical development in 2021.

Bavarian 57.55

The active ingredient from Kandy has already achieved positive study results and could bring in sales of more than one billion euros worldwide after approval, Bayer said. The group is putting an upfront payment of $ 425 million on the table for the deal, and Kandy has potential milestone payments of up to $ 450 million until the drug is launched, as well as additional milestone payments in the three-digit million range linked to sales. The transaction is expected to close by September.

Kandy is a privately held company that was formed as a result of the spin-off of Nerre Therapeutics – a spin-off from GlaxoSmithKline. According to Bayer, the hormone-free active ingredient from Kandy belongs to a new class of therapy and is being developed for the treatment of more common symptoms of menopause such as hot flashes and night sweats.

Bayer wants to remain the market leader

"With this acquisition, Bayer will add a possible, novel, non-hormonal, oral treatment option for menopausal women to its development portfolio in the area of ​​women's health," said Pharmaceutical Director Stefan Oelrich. Bayer has been the market leader in the field of "women's health" since it took over Schering, which brought the first contraceptive pill to market in Germany. "Such an innovation of a hormone-free approach has considerable sales potential," said Oelrich with regard to the active ingredient from Kandy.

In addition to the cancer drug Nubeqa and the kidney drug Finerenon, Bayer has another drug in the pipeline with blockbuster potential, i.e. the prospect of billions in sales. Bayer will continue to look for pharmaceuticals purchases, but the prices for products in the late stage of clinical development are very high, said Oelrich.

Nevertheless, it cannot be ruled out that Bayer could conclude an even bigger deal than the one with Kandy. The company needs to strengthen its pharmaceutical pipeline as its blockbuster patents – the anticoagulant Xarelto and the eye medicine Eylea – expire in the middle of the decade. Then there is a risk of considerable losses in sales.

In order to push ahead with strengthening the pipeline, Bayer brought in the experienced manager Marianne De Backer from the US company Johnson & Johnson, who is responsible for the external growth strategy in the pharmaceuticals division. The deal with Kandy is the first major transaction under their leadership.