Bayer AG is betting up to $1.11 billion (¥124.5 billion) that Peptidream Inc.'s popular therapeutic peptide discovery platform will help it discover novel lead structures in areas such as cancer and cardiology.

The four-year agreement, which includes an up-front payment of undisclosed value, research funding, and potential milestone and royalty payments for Peptidream, is the second $1 billion-plus deal Bayer has announced this month. Last week, it inked a $1.55 billion deal with Loxo Oncology Inc., securing rights to two small-molecule candidates for the treatment of genetically defined cancers. Bayer will have the right to develop and commercialize all compounds resulting from the collaboration. (See BioWorld, Nov. 15, 2017.)

"Finding new lead structures is one of the major challenges in drug discovery," Bayer said in a statement about the deal. "Peptidream has developed a novel peptide-based hit-finding technology which offers starting points for lead-discovery projects for difficult-to-address targets based on the great magnitude of the libraries."

With Peptidream, Bayer will nominate four targets, according to Bayer spokeswoman Jennifer Chang. The agreement, while including cancer as with the Loxo agreement, has even broader potential for the Berlin-based company, as suggested by an option it included to negotiate an extension of its license to peptide-drug conjugate, diagnostic, bioimaging and agricultural applications, an aspect that could take on significant importance with the company's planned acquisition of Monsanto. Altogether, the agreement comprises one of the broadest discovery deals Peptidream has ever entered into, said CEO Patrick Reid.

In the past seven years, Peptidream has established funded discovery collaborations with 17 of the world's largest pharmaceutical companies, and transferred its Peptide Discovery Platform System (PDPS) discovery platform for broad use to Bristol-Myers Squibb Co., Novartis AG, Eli Lilly and Co., Genentech Inc. and, most recently, Shionogi & Co. Ltd.

In April, Peptidream inked another $1 billion-plus collaboration agreement with U.S.-based Janssen Pharmaceuticals Inc. In that deal, Peptidream will use its PDPS technology to identify macrocyclic/constrained peptides against multiple metabolic and cardiovascular targets selected by Janssen. Janssen also gained the right for peptide-drug conjugate use and applications. Under terms of that deal, Peptidream stands to earn up to $1.15 billion in preclinical, clinical and commercialization milestones and is also eligible for sales royalties of any products that come from the collaboration. (See BioWorld Today, April 12, 2017.)

The Kawasaki, Japan-based research company has also been active in working with smaller companies, such as New Haven, Conn.-based Kleo Pharmaceuticals Inc., with which it agreed to develop immuno-oncology products in multiple indications in a deal this summer. (See BioWorld, Aug. 2, 2017.)

As of Sept. 30, Peptidream reported having 68 discovery and development programs ongoing, 24 of which have reached the hit-to-lead stage, eight of which have reached the lead-to-preclinical stage, three of which have been selected as clinical candidates, and one that has completed a phase I trial.

With Bayer, Peptidream will apply its PDPS technology to identify macrocyclic/constrained peptides and to optimizing hit peptides into therapeutic peptides or small-molecule products.

Peptidream shares (TYO:4587) rose following news of the deal, closing at ¥3,635 (US$32.31) on Monday.

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