The world's largest pharmaceuticals and chemicals conglomerate took another big step into the gene therapy arena on Monday. Bayer (BAYR.Y -1.40%) has agreed to acquire Asklepios BioPharmaceutical, a privately held U.S. company more commonly known as AskBio.

Bayer will pay $2 billion in cash upfront for AskBio plus up to $2 billion in success-dependent milestone payments. This deal gives Bayer access to gene therapy candidates in early clinical-stage trials for Pompe disease, Parkinson's disease, and congestive heart failure. 

Two businessmen shaking hands.

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AskBio develops and markets adeno-associated viruses (AAV) that deliver genetic blueprints drawn up by drug developers trying to make new gene therapies. Once the deal is complete, Bayer could leverage its new AAV library to build relationships with gene therapy developers heavy on innovative new drug candidates but light on resources to develop them. For example, Axovant Gene Therapies recently signed a deal with an AskBio venture to support all aspects of manufacturing Axovant's gene therapy programs.

The transaction's expected to close before the end of the year and give Bayer AAV manufacturing facilities and a company headquarters in North Carolina's Research Triangle. The acquisition of AskBio will also give Bayer a revenue-generating contract development and manufacturing organization (CDMO). Bayer intends to operate AskBio at arm's length as an independent company.

In 2016, Pfizer (PFE 0.10%) acquired an AskBio subsidiary, Bamboo Therapeutics, for access to SRP-9001, a gene therapy candidate for the treatment of Duchenne muscular dystrophy (DMD). In May, Pfizer reported impressive efficacy results for SRP-9001, but safety concerns associated with the AAV that Pfizer acquired from AskBio poured water on the celebration.