Bayer to pay $1.3 billion for Kumquat cancer drug in pharma push

Bayer AG agreed to pay Kumquat Biosciences Inc. as much as $1.3 billion to gain a potential new cancer medicine and boost its struggling pharma division’s growth prospects. 

Bayer will help fund the development of an early stage medicine from closely held Kumquat for several types of cancer in which a gene called KRAS has mutated, the German company said in a statement Tuesday.

Bayer has turned to small and mid-sized transactions to restock its pipeline of future medicines as its bestselling drugs Xarelto, a blood thiner, and Eylea, an eye medicine, encounter fresh competition from cheaper copycats. 

For now, the company is banking on fast growth from kidney medicine Kerendia and cancer drug Nubeqa to prevent the pharma division’s revenue from falling over the back half of this decade.

It’s also hoping to benefit from a string of investments in a new generation of cell and gene therapies.

Chief Executive Officer Bill Anderson is looking to resurrect the fortunes of a company that’s mired in mass litigation in the US over products inherited with the $63 billion takeover of Monsanto.

Once an icon of German industry, Bayer has struggled since the 2018 transaction, with the stock losing more than half of its value.

Bayer lacks the financial firepower of many of its rivals, in part because of the high debt loads it took on with the Monsanto deal.