Bayer and Systems Oncology Sign Exclusive License Agreement for Investigational Breast Cancer Treatment Approach ERSO™

Bayer has entered into an exclusive global license agreement with Systems Oncology, LLC, for ERSO™, a compound in pre-clinical development for metastatic Estrogen Receptor (ER) positive, breast cancer. ERSO is a small molecule activator of the Unfolded Protein Response (UPR) in ER-positive breast cancer cells. ERSO’s mechanism of action is a therapeutic approach being investigated in women with metastatic ER-positive breast cancer, an area where new therapies are urgently required.

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“Despite the overall progress we see in the treatment of breast cancer, there are limited treatment options for patients whose disease progressed, in particular in the metastatic setting,” said Robert LaCaze, Member of the Executive Committee of the Pharmaceuticals Division and Head of the Oncology Strategic Business Unit at Bayer. “In line with our Oncology strategy to focus on areas with a high medical need and innovative approaches with the potential to make a meaningful impact, we are excited to partner with Systems Oncology in developing ERSO. ERSO is being investigated as an alternative for women with ER-positive breast cancer and enhances our portfolio, enabling us to deliver new treatment options for patients who are waiting for them.”

With over 2 million new cases worldwide in 2018, breast cancer is the most common tumor type in women and the second leading tumor type overall. The prognosis as well as available treatment options depend highly on the subtype and stage of breast cancer. Around 70% of all women with breast cancer have ER-positive disease, with the survival rate for metastatic ER-positive breast cancer being only 20%. Thus, the need for additional treatment options beyond established anti-hormonal treatment approaches remains high. In preclinical studies, ERSO showed activity in ER-positive breast cancer cells as well as activity on ER mutations warranting further investigation. In addition, ERSO is also being studied in other tumor types based on its mechanism.

“Given ERSO’s potential in cancer care, it was important for us to align with a sophisticated group that understands innovation. Bayer is a proven innovator who shares our vision for ERSO, and they have the clinical, scientific, and business leadership to succeed,” said Dr. Spyro Mousses, CEO and Co-Founder of Systems Oncology.

“With the experienced team at Bayer leading the development effort, I fully expect that this exciting compound has the potential to create a real paradigm-shift for breast cancer care,” said Dr. Joyce O'Shaughnessy, Baylor University Medical Center, Texas Oncology, US Oncology.

“The collaboration with Systems Oncology combines their deep experience in identifying alternative treatment pathways with our global footprint and established profile in order to develop new treatment options that can improve patient outcomes,” said Marianne De Backer, PhD, MBA, Member of the Executive Committee and EVP, Head Strategy and Business Development & Licensing, Pharmaceuticals Division of Bayer AG. “It underlines our commitment to explore partnerships on innovative treatment approaches at all levels.”

Under the terms of the agreement, Bayer will be responsible for developing and commercializing ERSO globally. Systems Oncology will receive an upfront payment of 25 million US dollars and is eligible to receive payments from Bayer upon achievement of certain development, and commercialization milestones totaling 345 million US dollars, as well as royalties on future global net sales.

The Pharmaceuticals Business Development & Licensing team of Bayer facilitated this collaboration.

About ERSO™

Scientists at Systems Oncology entered into a strategic research collaboration with two professors at the University of Illinois, Dr. David Shapiro and Dr. Paul Hergenrother, who respectively conducted pioneering research into the biology and chemistry of anticipatory activation of UPR in breast cancer. The research led to intellectual property (IP) that covered small molecule agents that can activate the UPR. Inspired with a multi-scalar systems understanding of this mechanism, Systems Oncology acquired a license to the IP from the University and invested to drive pre-clinical studies and manufacturing development, eventually establishing the ERSO program as a promising investigational compound.

About Bayer

Bayer is a global enterprise with core competencies in the life science fields of health care and nutrition. Its products and services are designed to benefit people by supporting efforts to overcome the major challenges presented by a growing and aging global population. At the same time, the Group aims to increase its earning power and create value through innovation and growth. Bayer is committed to the principles of sustainable development, and the Bayer brand stands for trust, reliability and quality throughout the world. In fiscal 2019, the Group employed around 104,000 people and had sales of 43.5 billion euros. Capital expenditures amounted to 2.9 billion euros, R&D expenses to 5.3 billion euros. For more information, go to www.bayer.us.

About Systems Oncology

Systems Oncology LLC (SO) is an AI-based cancer therapy discovery and development company. SO has a multidisciplinary team of scientists and a revolutionary cognitive computing platform (Expansive.AI) able to intelligently integrate, model, and mine big data from hundreds of molecular, genomic, and biomedical datasets. This new kind of computational data mining has empowered the SO team to rapidly extract many therapeutically useful insights from complex multi-scalar systems models of cancer biology. This scalable data-driven approach has been used by SO to translate many unique biological insights into dozens of discovery projects and research collaborations with leading universities, producing one of the fastest growing pipelines of innovative cancer therapies in the industry. For more information, go to www.systemsoncology.com

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Forward-Looking Statements

This release may contain forward-looking statements based on current assumptions and forecasts made by Bayer management. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. These factors include those discussed in Bayer’s public reports which are available on the Bayer website at www.bayer.com. The company assumes no liability whatsoever to update these forward-looking statements or to conform them to future events or developments.

COR-PFM-ONC-US-0001-1 09/20

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