HAMBURG, Germany _ Big pharma houses continue to shop for biotech deals. The latest move was made by pharmaceutical giant Bayer AG which has acquired Microbial Developments Ltd., a small biotech company in Malvern, England, via its British unit Bayer plc.

The acquisition was officially reported by Bayer AG on Oct. 31, 1995, but the announcement was withdrawn a day later. The final purchase price was not disclosed, but in October, Bayer put the price at around 30 million DM.

BioWorld Financial Watch reported on the trend last month. As of Nov. 8, 1995, the total announced value of 52 new biotech mergers and acquisitions was $2.2 billion in 1995, compared to 45 deals in all of 1994 worth $3 billion.

According to Guenther Forneck, spokesman for Bayer AG, of Leverkusen, Germany, the purchase will reinforce Bayer's leading role in the research and development of animal health products.

Microbial Developments specializes in bacterial development and manufacturing, large-scale fermentation and freeze-drying techniques. With annual sales of 2 million in 1994, the company's employee roster numbers 25.

Microbial Development's sister company, Life-Care Products Ltd., of Malvern Link, England, developed a fermentation product called Aviguard, which now will be marketed worldwide by Bayer. Aviguard prevents salmonella and Escherichia coli infection in poultry.

Aviguard is a freeze-dried preparation composed of the normal gut microflora from hens. Given to day-old chicks with water or sprayed on the animals, it leads to competitive exclusion of salmonella and E. coli colonization. Microbial Development told BioWorld Today that it is working to extend the Aviguard principle to other animals.

In March, Bayer signed an agreement with the Federal Russian Scientific Institute for Animal Health Care, of Moscow. The institute's production plant at Vladimir near Moscow is now formulating Bayer's anti-infective Baytril. In August, Bayer, was one of the first German companies to enter into a joint venture project in Vietnam. Bayer Agritec Saigon has been established to manufacture and market animal feed additives and veterinary end products. Bayer's Animal Health Group generated 22 percent of its 1994 total turnover of 1.1 billion DM in Asia and now is one of the three leading providers of animal health products worldwide, Forneck said.

The Microbial Developments acquisition is in line with Bayer's strategy to tighten links with "biotech boutiques," said Walter Wenninger, managing director of Bayer AG. Bayer has established approximately 20 such alliances, mostly accompanied by capital expenditures of $20 million to $100 million. Currently, these investments amount to 10 percent of Bayer's research budget.

Wenninger told BioWorld Today that this figure would double within the next three years.

One of the most recent deals was struck in September between U.S. subsidiary Bayer Corp., of Pittsburgh, and Myriad Genetics Inc., of Salt Lake City. Myriad will get up to $71 million in the collaboration to discover genes for obesity, osteoporosis and asthma. (See BioWorld Today, Sept. 13, 1995, p. 1.)

"We expect important and innovative therapy forms from this cooperation," said Horst Meyer, head of Bayer's pharmaceutical group. "It is a very decisive and promising step toward the integration of molecular genetics into our research and development program."

During a recent symposium in Wuppertal, Germany, Meyer said Bayer's strategy is to set up three different groups: one doing "exploratory tasks with the greatest creative freedom possible," a second developing strategic projects from basic research findings and a third doing technology management by establishing links to universities and other companies. The links aim at organizing cooperation and buying licenses.

Meyer said this strategy will lead to a faster translation of basic research findings into new products for Bayer. n

-- Ludger Wess Special To BioWorld Today

(c) 1997 American Health Consultants. All rights reserved.