Bayer has announced that it has agreed to acquire German drug developer, Cologne-based Direvo Biotech AG for €210 million ($294.3 million).

Bayer said the acquisition would strengthen its research into biological drugs. It expects the deal to close by the end of the month.

The industrial biotechnology business of Direvo Biotech is not subject to the transaction, and has been sold in a separate deal to a group of financial investors.

Bayer Healthcare plans to integrate Direvo Biotech's research and development (R&D) personnel into Bayer Schering Pharma's global drug discovery organisation, and te Cologne site would be maintained and integrated into Bayer Schering Pharma as a centre of expertise for biologicals, alongside the global R&D centres in Germany (Berlin and Wuppertal) and the USA (Berkeley).

Direvo Biotech's proprietary protein engineering platform uses high throughput technologies for the rapid discovery and optimization of biopharmaceuticals.

The platform has already been successfully applied to a wide range of proteins, including therapeutic antibodies and proteases that will be added to the preclinical pipeline of Bayer Schering Pharma.

''Today Bayer Schering Pharma is among the top ten biologicals companies in the world. We are committed to further strengthen our biologicals portfolio, and Direvo's leadership in protein engineering provides promising opportunities for further business growth,'' said Arthur Higgins, CEO of Bayer HealthCare AG.

''With this deal, we emphasize our position as a recognized leader in protein engineering. Bayer HealthCare is our owner of choice not only because of the excellent perspectives for our projects but also due to the close geographic proximity,'' said Thomas von Rüden, CEO of Direvo Biotech AG.

''We feel that this is in the best interest of our former owners and our employees. As part of Bayer Schering Pharma, we will further develop our expertise and knowledge in biopharmaceutical research.''