HAMBURG, Germany _ Big pharma houses continue toshop for biotech deals. The latest move was made bypharmaceutical giant Bayer AG which has acquiredMicrobial Developments Ltd., a small biotech companyin Malvern, England, via its British unit Bayer plc.

The acquisition was officially reported by Bayer AG onOct. 31, 1995, but the announcement was withdrawn aday later. The final purchase price was not disclosed, butin October, Bayer put the price at around 30 million DM.

BioWorld Financial Watch reported on the trend lastmonth. As of Nov. 8, 1995, the total announced value of52 new biotech mergers and acquisitions was $2.2 billionin 1995, compared to 45 deals in all of 1994 worth $3billion.

According to Guenther Forneck, spokesman for BayerAG, of Leverkusen, Germany, the purchase will reinforceBayer's leading role in the research and development ofanimal health products.

Microbial Developments specializes in bacterialdevelopment and manufacturing, large-scale fermentationand freeze-drying techniques. With annual sales of 2million in 1994, the company's employee roster numbers25.

Microbial Development's sister company, Life-CareProducts Ltd., of Malvern Link, England, developed afermentation product called Aviguard, which now will bemarketed worldwide by Bayer. Aviguard preventssalmonella and Escherichia coli infection in poultry.

Aviguard is a freeze-dried preparation composed of thenormal gut microflora from hens. Given to day-old chickswith water or sprayed on the animals, it leads tocompetitive exclusion of salmonella and E. colicolonization. Microbial Development told BioWorldToday that it is working to extend the Aviguard principleto other animals.

In March, Bayer signed an agreement with the FederalRussian Scientific Institute for Animal Health Care, ofMoscow. The institute's production plant at Vladimirnear Moscow is now formulating Bayer's anti-infectiveBaytril. In August, Bayer, was one of the first Germancompanies to enter into a joint venture project inVietnam. Bayer Agritec Saigon has been established tomanufacture and market animal feed additives andveterinary end products. Bayer's Animal Health Groupgenerated 22 percent of its 1994 total turnover of 1.1billion DM in Asia and now is one of the three leadingproviders of animal health products worldwide, Fornecksaid.

The Microbial Developments acquisition is in line withBayer'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 $20million to $100 million. Currently, these investmentsamount to 10 percent of Bayer's research budget.

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

One of the most recent deals was struck in Septemberbetween U.S. subsidiary Bayer Corp., of Pittsburgh, andMyriad Genetics Inc., of Salt Lake City. Myriad will getup to $71 million in the collaboration to discover genesfor obesity, osteoporosis and asthma. (See BioWorldToday, Sept. 13, 1995, p. 1.)

"We expect important and innovative therapy forms fromthis cooperation," said Horst Meyer, head of Bayer'spharmaceutical group. "It is a very decisive andpromising step toward the integration of moleculargenetics into our research and development program."

During a recent symposium in Wuppertal, Germany,Meyer said Bayer's strategy is to set up three differentgroups: one doing "exploratory tasks with the greatestcreative freedom possible," a second developing strategicprojects from basic research findings and a third doingtechnology management by establishing links touniversities and other companies. The links aim atorganizing cooperation and buying licenses.

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

-- Ludger Wess Special To BioWorld Today

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