Bayer and X-Chem Expand Drug Discovery Collaboration to Discover Novel Medicines

Berlin, July 12, 2016 – Bayer and X-Chem, Inc., a privately held biotechnology company focused on applying its innovative drug discovery capabilities to the generation of novel small molecule therapeutics, have entered into an expanded global drug discovery collaboration across multiple therapeutic areas and target classes. The new agreement extends Bayer’s access to X-Chem’s DEX™ technology which is based on DNA-encoded libraries of small molecules with more than 120 billion molecules. The aim of the collaboration is to discover innovative lead structures for complex drug targets in areas of high unmet medical need.

The two partners have been working together successfully under a research collaboration since 2012 and Bayer has already licensed two programs for multiple series of small molecules from X-Chem that address complex target structures such as protein:protein interactions. The new multi-year collaboration agreement will significantly expand the scope and duration of the partnership.

Bayer and X-Chem have built a strong relationship delivering outcomes that have exceeded expectations. Complementing our in-house expertise with technologies and know-how of excellent partners is an integral part of our innovation strategy at Bayer,” said Professor Andreas Busch, member of the Executive Committee of Bayer AG’s Pharmaceuticals Division and Head of Drug Discovery. “We have identified the DEX™ platform as a highly valuable extension for our drug discovery efforts. We are looking forward to working with X-Chem on some of our highest-priority targets, for which X-Chem’s platform is ideally suited.”

X-Chem is making significant inroads toward the discovery of small molecule drug candidates using its ultra-large screening library. With multiple successes across our partnerships, the DEX™ platform has been broadly validated to deliver novel chemical entities against a wide array of targets, including difficult targets,” said Rick Wagner, Ph.D., Chief Executive Officer of X-Chem. “We are fortunate to have Bayer as a major strategic partner, and we are looking forward to expanding this strong and successful relationship. X-Chem is excited to continue working with Bayer on a wider array of diseases and conditions with significant unmet medical needs.”

Under the terms of this new agreement, X-Chem will receive an up-front payment, research and development funding, as well as potential pre-clinical, clinical and regulatory milestone payments, up to a total of $528 million. Bayer has an exclusive option to license any programs generated in the course of the collaboration. X-Chem will also receive royalties and sales milestones for each successfully commercialized drug that results from a licensed collaboration program.

About DEX™ Technology

The DEX™ drug discovery engine is based on a library, currently in excess of 120 billion compounds and growing, generated by iterative combinatorial synthesis of small molecules tethered to DNA tags that record the synthetic history of the small molecule. Each small molecule in the library has a unique DNA barcode attached it. The library is screened as a mixture, using affinity-based binding to a target of interest. Certain rare molecules in the library that bind to the target can be “fished out”, while the rest of the molecules are washed away. DNA sequencing methods are then used to detect molecules that are enriched when bound to the target. The diverse nature of the library produces multiple families or clusters of related molecules that bind to the target, forming a basis for emergent structure-activity relationships. Structure-activity relationships are typically used by medicinal chemists to guide iterative chemical maturation of a molecule into a drug. Based on the synthetic history encoded in the DNA sequence information, molecules are then made without the DNA tag attached, and tested for activity in conventional assays. The X-Chem platform is exceptional in its ability to thoroughly sample its vast, growing library, based on unique chemistries, proprietary screening methods, highly advanced IT tools, and a rich database based on prior successes.

About X-Chem

X-Chem, Inc. is a privately-owned biotechnology company based in Waltham, Mass. The company’s mission is to apply its powerful product engine to the discovery of small molecule compounds against high-value therapeutic targets. X-Chem has established partnerships with Roche, AstraZeneca, Bayer, Pfizer, Sanofi, Janssen, Alexion, MD Anderson Cancer Center and several other leading pharmaceutical companies, biotechnology organizations, and academic centers. For further information on X-Chem, please visit: http://www.x-chemrx.com/.