Bayer and Bicycle Therapeutics plc announced that they have entered into a strategic collaboration agreement to discover, develop, manufacture, and commercialize Bicycle radioconjugates for multiple agreed upon oncology targets. Bicyclic peptides are peptides consisting of 9-20 amino acids that can be synthetically manufactured and bind to targets with high affinity and selectivity, affording high tumor penetration and fast excretion from healthy organs. They are chemically synthesizable, featuring a low molecular weight and tunable pharmacokinetics, with a large surface-area for molecular interactions that allows protein-protein interactions to be targeted.

The two companies will jointly use Bicycle's peptide technology to develop bicyclic peptides for several undisclosed oncology targets. Targeted radiotherapies are an innovative class of cancer therapies. Due to their unique mode of action, they have the potential to unlock a broad opportunity space and serve patients in high-unmet medical need indications.

Under the terms of the agreement, Bayer and Bicycle will collaborate on the development of bicyclic peptides for multiple oncology targets. Bicycle will utilize its proprietary phage platform to discover and develop bicyclic peptides and Bayer will be responsible for, and fully fund, all further preclinical and clinical development, manufacturing, and commercialization activities. Bicycle will receive a $45 million upfront payment and with potential development and commercial-based milestone fees, payments to Bicycle could total up to $1.7 billion.

Bicycle will also be eligible to receive mid-single to double-digit tiered royalties on Bicycle-based medicines commercialized by Bayer. The closing of the transaction is subject to clearance of the transaction under the U.K. National Security and Investment Act 2021. Stephenson Harwood advises Bicycle Therapeutics on radiotherapy deal with Bayer.