Bayer has agreed to acquire British biotech firm KaNDy Therapeutics for an initial $425 million, to strengthen its women's healthcare business with a prospective non-hormonal treatment of menopausal symptoms.

Apart from the $425 million upfront, Bayer agreed to pay further milestone payments of up to $450 million for certain development achievements, with potentially more than $100 million additional sales-dependent milestone payments, the German drugs and pesticides maker said in a statement.

KaNDy recently completed the second of three phases of testing for NT-814, a new non-hormonal daily pill for the relief of hot flushes and night sweats, which Bayer said could generate peak annual sales of more then 1 billion euros.

Bayer is seeking to revive its women's healthcare business as sales of birth control pills, with lead brands Yaz and Yasmin, have been dragged lower by cheaper copied versions.

It is close to settling injury claims over inserted birth control device Essure for more than 1 billion euros.

Previous moves to reinvigorate the franchise include an alliance with Germany's Evotec to develop a treatment of polycystic ovary syndrome.

Fountain Healthcare Partners, Ireland's largest dedicated life science venture capital fund, was an early stage investor in KaNDy Therapeutics Ltd.

Commenting on today’s news, Ena Prosser, Partner at Fountain Healthcare, who led the investment in KaNDy Therapeutics on behalf of the Fund, said: "As early stage investors in KaNDy Therapeutics, we have been delighted to support Dr Mary Kerr and her team in the development of NT-814 as a potential novel medicine to improve menopausal symptoms. As a global leader in women's healthcare, Bayer is an ideal partner for KaNDy Therapeutics to continue the progress and optimise NT-814 as a potential treatment option."