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updated 6/23/2014 8:01:59 AM ET 2014-06-23T12:01:59

FRANKFURT/LONDON (Reuters) - Bayer has struck an alliance with U.S. biotech firm Dimension Therapeutics to develop a gene therapy for the treatment of haemophilia A, marking renewed interest in an approach to tackle the cause of diseases at a cellular level.

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Gene therapy involves inserting corrective genes into malfunctioning cells to get them to work again without further use of drugs. Dimension has been looking into using viruses to carry the genes to the affected cells.Gene therapy has seen more than 20 years of experiments and a series of disappointments. However, Amsterdam-based UniQure is about to start selling its gene therapy drug Glybera in Europe as a treatment for the ultra-rare disease lipoprotein lipase deficiency (LPLD) with partner Chiesi.

U.S. biotech firm Bluebird Bio last week reported positive results with an experimental gene therapy for another blood disorder, sending its shares soaring.

Dimension Therapeutics will receive an upfront payment of $20 million and may get development and commercialisation milestone payments of up to $232 million. Bayer will also make royalty payments based on future product sales.

Standard haemophilia A therapies are often administered intravenously multiple times a week and may be required for life.

The German drugmaker's established haemophilia A therapy Kogenate had 1.2 billion euros ($1.6 billion) in sales last year. It has two more drug candidates against the type A of the hereditary bleeding disorder in the third and last phase of testing on humans that is required for regulatory approval. ($1 = 0.7366 Euros)

(Editing by Jason Neely and David Holmes)

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