Jul. 26, 2022
Ginkgo Bioworks (NYSE: DNA), the leading horizontal platform for cell programming, announced the signing of a definitive agreement for the previously announced transaction with Bayer to expand Ginkgo's platform capabilities in agricultural biologicals. These capabilities will be built pursuant to a transaction in which Ginkgo will acquire Bayer's 175,000-square-foot West Sacramento Biologics Research & Development site, team, and internal discovery and lead optimization platform for approximately $83.0 million in consideration. The proposed transaction is projected to close in the fourth quarter of 2022, subject to regulatory approvals and customary closing conditions. Ginkgo will also integrate the R&D platform assets from Joyn Bio, a joint-venture between Ginkgo and Leaps by Bayer formed in 2017.
While chemical and plant trait products are currently the dominant offerings on the market to improve crop performance, agricultural biologicals are a rapidly growing category of solutions that have the potential to offer tremendous sustainability and performance benefits. Bayer will be the first major partner of Ginkgo's expanded agricultural biologicals platform, entering into a new collaboration focused on the advancement of Joyn's marquee nitrogen fixation program, as well as new programs in areas such as crop protection and carbon sequestration.
As part of a three-year strategic partnership, Ginkgo will provide research services to Bayer in the field of agricultural biologicals with the potential to earn downstream value in the form of royalties on net sales from products developed under the partnership. As previously disclosed, it is expected that the cash proceeds from this collaboration with Bayer will significantly offset the operating expenses acquired through the transaction. In addition to this collaboration with Bayer, Ginkgo expects to engage with other customers in supporting the development of their agricultural biological programs.
"To ensure sustainable food security for an ever growing population, we need to invest in biological solutions," said Jason Kelly, CEO and co-founder of Ginkgo Bioworks. "By acquiring one of the premier R&D sites for agricultural biologicals worldwide and partnering with the best-in-class teams at Bayer and Joyn, we are demonstrating our commitment to developing breakthrough products for growers around the world. We are excited to be able to make this platform accessible to innovative companies and teams who may otherwise not have the resources or expertise to develop these capabilities in house."
"Through this strategic research partnership with Ginkgo and by tapping into the open innovation ecosystem, Bayer is accelerating innovation in our biologicals pipeline and continuing to lead in the development of effective and reliable solutions," said Bob Reiter, Head of R&D for Bayer's Crop Science Division. "Agricultural biologicals have the potential to boost crop yields while simultaneously offering environmental benefits to growers, and Ginkgo's technologies will help to deliver on biologicals' potential."
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