Bayer’s corporate offices in Berlin. Its foothold in Cambridge may help it compete with Sanofi, Shire, Astrazeneca, Merck and others.
The newest pharma giant to put down stakes in the heart of the Boston area’s drug-discovery cluster is a German conglomerate best known for its ubiquitous aspirin. But Bayer AG hopes to soon be known for backing entrepreneurial companies seeking to cure diseases.
Bayer, which last week formally opened a life science center outside of Cambridge’s Kendall Square, trumpeted its arrival last year with a pair of outsize early-stage investments in biotech startups that are using cutting-edge technology.
The company in August plowed $300 million into Casebia Therapeutics, a Cambridge joint venture with CRISPR Therapeutics that will use a gene-editing tool called Crispr-Cas9 to develop genetic-based treatments for heart disease, blindness, and blood disorders.
Bayer in December joined with Versant Ventures, a health care investment firm, in a $225 million initial funding round for Blue Rock Therapeutics,which is trying to use stem cells to regenerate brain tissue and heart muscle in patients who have suffered heart attacks.
There’s more to come, said Axel Bouchon, the Berlin-based head of the Bayer Lifescience Center, who was visiting Boston last week. In the coming months, he said, Bayer — which is currently working to complete a $66 billion blockbuster takeover of the seeds giant Monsanto Co. — is likely to back a local startup in the fast-growing bio-agriculture sector.
Bouchon said Bayer is basing its Greater Boston strategy on five pillars: pursue big ideas, make substantial early-stage investments, give the companies it backs enough time to focus on science, utilize Bayer know-how, and work in collaboration with partners.
Casebia has about 20 employees in Cambridge and another 17 in a San Francisco lab. The company says it will be ramping up quickly at both sites to advance gene-editing experiments. Researchers also will be working with Bayer scientists in Germany.
Blue Rock, which also has a cardiovascular research lab in Toronto and a neurology lab in New York, is stationing its management team in Cambridge. It will be operating out of the new Bayer life science center at 610 Main St., along with Casebia and a Bayer team that is working to forge partnerships with other biotechs and academic researchers in the area.
The three operations together have about 45 employees, but are expected to have between 150 and 200 by this time next year, Bouchon said. That would give Bayer a foothold here to compete for business and talent with other European drug makers, such as Sanofi SA, Shire PLC, Novartis AG, AstraZeneca PLC, and German rival Merck KGaA.
To attract top research scientists in such an environment, employees at Bayer-backed Casebia and Blue Rock — as well as those at new startups it funds — are given incentive packages that include not only traditional stock options, but additional cash awards based on clinical outcomes. The money will be meted out if drugs they develop cure patients in early-stage clinical trials, studies designed primarily to prove safety, but also effectiveness.
Bayer won’t specify the amount of the outcome awards, which will vary by employee. Bouchon said the incentives will focus the companies and its employees on their mission.
“The incentive structure for the people changes everything,” Bouchon said. “You need a return on investment, but you also need a return on humanity.”Discover More