There have been concerns among shareholders that Bayer may have bit off more than it can chew with a massive bid to acquire seeds giant Monsanto in the United States. On Tuesday, the German pharmaceutical and chemical giant sought to lay those concerns to rest by signing a new collaboration agreement with a US biotech firm.
The deal with Loxo Oncology is to jointly develop and commercialize two breakthrough cancer drugs that help shrink tumors. According to the two firms, Loxo may eventually receive a total of $1.55 billion (€1.3 billion) from Bayer in steps as the drugs are developed and approved by regulatory agencies in the US and overseas.
By reaching the agreement, the Leverkusen, Germany-based Bayer sent a signal to the market that it intends to remain strong in pharmaceuticals despite its pending, $60-billion takeover Monsanto. That deal is being scrutinized by the European Union for possible antitrust questions.