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Bayer Buys KaNDy Therapeutics for $425 Million Up Front

By Cory Renauer – Updated Aug 11, 2020 at 12:32PM

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The pharmaceutical giant made a big bet on the future of women's healthcare.

Post-menopausal women with debilitating symptoms that don't respond to decades-old hormonal therapies could finally see some new treatment options. The chemicals and pharmaceuticals conglomerate Bayer (BAYR.Y -1.36%) will acquire KaNDy Therapeutics, a privately held biotechnology company developing a first-in-class, nonhormonal treatment for this large underserved population. 

On Tuesday, Bayer agreed to pay $425 million for KaNDy Therapeutics to access NT-814, an oral treatment shown to reduce the frequency of hot flashes, night sweats, and related vasomotor symptoms. The large up-front sum will be followed by up to $450 million in milestone payments if Bayer can launch NT-184. If approved and successfully launched, KaNDy will receive sales-related milestone payments that could reach nine digits.

Prescription drugs and cash money.

Image source: Getty Images.

The asset that sparked Bayer's acquisition appears effective. During a phase 2B trial, hot flash frequencies for post-menopausal women treated with NT-814 fell significantly compared with patients who received a placebo.

In 2018, the Food and Drug Administration approved a new treatment to reduce hot flashes called Bijuva from TherapeuticsMD (TXMD -1.34%). This is a capsule full of estradiol and progesterone, hormones that have been used for decades, and sales have been somewhat disappointing. In the first half of 2020, TherapeuticsMD reported Bijuva sales that reached just $2.5 million.

Around three out of four women with a uterus will experience menopausal symptoms that range in severity from annoying to debilitating. Despite Bijuva's commercial flop, Bayer thinks sales of NT-814 can reach more than $1 billion annually as a nonhormonal option with arguably fewer side effects.

Cory Renauer has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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