Bayer hopes to sweeten its outlook with some Kandy

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Fortune favours the brave, and embarking on an acquisition in the middle of a billion-dollar legal tussle is certainly a bold move. But arguably the $425m up front Bayer is spending on the private UK company Kandy Therapeutics is another way to strengthen its position in women’s health, a division that could use some new blood; despite holding significant market share, many of its lead contraceptives have lost patent protection. The company is also defending itself on the legal front, over injury claims for the implanted contraceptive device Essure. Today’s deal has been struck for NT-814, an oral neurokinin-1 & 3 receptor antagonist, for menopausal hot flushes and night sweats. Kandy was spun out of Nerre Therapeutics in 2017, and no investment beyond August 2018's £25m series C have been announced; if this is the extent of its funding the acquisition represents a very good return for investors. As for Bayer, whether this will yield an equally good return – the group has promised a further $450m in milestones – depends on NT-814 not only crossing the finish line, but generating the €1bn of peak sales Bayer is forecasting. Phase III trials start in 2021.

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