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Bayer in Oncology Deals

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Bayer’s (BAYRY) HealthCare segment was very active in the last few quarters on acquisitions and collaborations. The company has entered into several agreements to boost its product portfolio.

Earlier in the month, Bayer entered into a master collaboration agreement with Sysmex Inostics GmbH, a diagnostic company, for the development of companion diagnostics for targeted cancer therapies. As per the agreement, Sysmex Inostics’ innovative blood-based companion diagnostic solutions will be used to develop Bayer’s anti-cancer agents. Bayer however did not mention any financial details pertaining to the agreement.

In Aug 2013, Bayer entered into another oncology collaboration and licence agreement with Compugen Ltd. (CGEN) for an upfront payment of $10 million. The collaboration agreement is for the research, development, and commercialization of antibody-based therapeutics for cancer immunotherapy against two novel immune checkpoint regulators discovered by Compugen.

Per the terms of the agreement, Bayer will gain full development and worldwide commercialization rights to the potential cancer therapeutics, after jointly conducting a preclinical research program with Compugen.

Moreover, in Jun 2013, the company inked a collaboration agreement with Seattle Genetics Inc. (SGEN) that allowed the former to gain worldwide rights to Seattle Genetics’ auristatin-based antibody-drug conjugate (ADC) technology along with antibodies to several oncology targets. As per the terms of deal, Bayer will be responsible for the development, manufacturing and commercialization of all products under the agreement.

We are encouraged by the company’s collaboration agreements. The collaborations are expected to strengthen Bayer’s oncology portfolio. However, big companies like Roche (RHHBY) have a presence in the oncology market.

Bayer, a large-cap pharma company, presently carries a Zacks Rank #2 (Buy). Meanwhile, Roche looks more attractive in this space with a Zacks Rank #1 (Strong Buy).

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