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Bayer AG (Leverkusen, Germany) has signed a five-year research agreement with LION Bioscience AG (Heidelberg, Germany) to make more efficient use of leading-edge genomics and information technologies in the life science field. The pact will seek to identify and develop innovative drugs and diagnostic markers.
Payments under the agreement will be performance-related, and could eventually total $100 million, according to a statement by Bayer.
The agreement calls for LION to establish a bioinformatics center, LION Bioscience Research Inc. (LBRI), in Cambridge, MA, which Bayer will have the option of spinning into the Bayer Group in the final year of the agreement. Meanwhile, Bayer is developing Bayer SCOUT, a new bioinformatics product that will be used to access a variety of global databases, analyze the information and then identify new drug targets.
The new alliance is part of Bayer’s strategy to beef up its drug discovery abilities in a sector where it has fallen behind some of the Big Pharma players. That strategic focus was signaled last year with the company’s genetic research partnership with Millennium Pharmaceuticals (Cambridge, MA) in a $465 million deal.
The SCOUT integrated package of hardware and software will allow LION to target at least 500 new, disease-associated gene sequences potentially suitable as a starting point for new drug therapies. LBRI also will identify genetic diagnostic markers for the early detection of diseases and supply them to Bayer.
The contract specifies that LION will seek to discover at least 500 new genetic targets.
Dr. Manfred Schneider, chairman of Bayer AG’s board of management, said that while Bayer had selected LION as a "competent partner in Germany," the decision was made to locate LBRI in the U.S. because "the U.S. is still the leader in this sector," and puts it "in proximity to worldwide leading research groups. The policy of acquiring external intelligence, implementing it within Bayer and applying it to our life science research will strengthen our competitiveness."
Dr. Wolfgang Hartwig, head of biopharmaceutical research at Bayer, said the use of bioinformatics "helps us to analyze the flood of data and to identify correlations between normal and pathologically modified gene sequences. Our alliance with LION Bioscience AG will enable us to make vital progress in this field." He pointed out that Bayer also cooperates with a large number of other industrial organizations.
"We are happy to enter this challenging partnership with Bayer AG, which represents the attainment of a major milestone in LIONs young history," said LION’s CEO, Dr. Friedrich von Gohlen und Halbach.
Founded just two years ago, the company has grown rapidly and currently employs 150 people.