German pharmaceutical giant Bayer said on Tuesday it had reached an agreement worth up to $1.3 billion (1.1 billion euros) with U.S.-based biotechnology company Kumquat Biosciences to develop a new experimental cancer drug.

Under the deal, Kumquat will be responsible for initiating and completing the drug's clinical trials, while Bayer will take on the final development and commercialization. Kumquat will receive up to $1.3 billion, as well as additional royalties from sales.

The drug targets several types of cancer that have a mutation in the KRAS gene, which accounts for about 25 percent of human tumors. The specific variant that Kumquat is working on has no effective treatment options yet. KRAS mutations are found in pancreatic, colon and lung cancers.

Some of Bayer’s other successful products, such as kidney drug Kerendia and cancer drug Nubeqa, are seeing rapid sales growth. However, the company’s agrochemicals division continues to face long-standing problems related to the glyphosate-based herbicide Roundup, which is the subject of thousands of lawsuits in the United States alleging it causes blood cancer. Bayer says scientific studies and regulators confirm the product’s safety.

The company also recently warned of uncertainty over possible new U.S. tariffs after President Donald Trump threatened to raise tariffs on pharmaceuticals. | BGNES, AFP