Bayer and X-Chem Pharmaceuticals have expanded their global drug discovery collaboration, which was launched in 2012 and spans multiple therapeutic areas and target classes. The German group is among several pharma giants collaborating with the privately-held US biotech firm, including AstraZeneca, Pfizer and Roche.

The new multi-year agreement will extend Bayer's access to the Waltham, Massachusetts-based firm’s DEX technology, which is based on DNA-encoded libraries of small molecules with more than 120 billion molecules. The partners said the new terms will significantly expand the scope and duration of their collaboration aimed at discovering innovative lead structures for complex drug targets in areas of high unmet medical need.

As part of the updated agreement, Bayer will have an exclusive option to license any programs generated through the joint effort. In return, X-Chem will receive an upfront payment and R&D funding as well as potential preclinical, clinical, and regulatory milestone payments worth up to $528 million.

Bayer has also agreed to pay X-Chem royalties and sales milestones for each successfully commercialized drug that results from a licensed collaboration program. Under the agreement inked in 2012 it licensed two programs for multiple series of small molecules that address complex target structures such as protein–protein interactions.

The licenses included an early-stage drug discovery program directed against an epigenetic drug target, after achieving an unspecified success milestone, and a second program consisting of several series of small molecule compounds against a cardiovascular drug target.

Andreas Busch, member of the executive committee of Bayer's Pharmaceuticals division and head of drug discovery, said the DEX platform will be a “highly valuable extension” for the Leverkusen group’s drug discovery efforts, especially as it is “ideally suited” to support some of Bayer’s highest-priority targets.

Through its DEX library, the US biotech firm said it can discover multiple series of novel, potent and selective lead compounds at an “unprecedented rate of success” against a wide range of targets, including some that previously failed using conventional screening methods.