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UPDATE 1-Bayer in gene therapy collaboration with Mammoth Biosciences

* Mammoth to receive $40 mln upfront Bayer to possibly pay more than $1 bln in milestone payments

* Liver will be initial focus (Adds background on companies)

FRANKFURT, Jan 10 (Reuters) - Bayer on Monday struck a partnership deal with Mammoth Biosciences to develop therapeutic tools based on CRISPR/CAS9 gene editing as the German drug maker seeks to widen its cell and gene therapy development efforts.

Unlisted U.S. biotech firm Mammoth will initially receive $40 million from Bayer plus potential milestone payments of more than $1 billion contingent on scientific and commercial achievements.

The initial focus of the collaboration will be liver-based diseases, the companies said in a joint statement on Monday.

Mammoth, headquartered in the San Francisco Bay area, was co-founded by Nobel laureate Jennifer Doudna. She shared the 2020 Nobel Prize in Chemistry with Emmanuelle Charpentier for developing the CRISPR/CAS9 gene editing tool.

Among previous steps to build a cell and gene therapy business, Bayer acquired BlueRock Therapeutics and Asklepios Biopharmaceutical in 2019 and 2020, respectively.

In late 2020, it agreed an alliance on anti-tumour immune cell therapies with Atara Biotherapeutics.

Reporting by Ludwig Burger and Patricia Weiss Editing by Riham Alkousaa and Miranda Murray

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