RARE Daily

Biogen to Acquire Reata Pharmaceuticals for $7.3 Billion

July 28, 2023

Rare Daily Staff

Biogen and Reata Pharmaceuticals have entered into a definitive agreement under which Biogen has agreed to acquire Reata for $172.50 per share in cash, reflecting an enterprise value of approximately $7.3 billion.

Reata has made significant advancements developing therapeutics that regulate cellular metabolism and inflammation in serious neurologic diseases. Reata’s FDA-approved Skyclaris is the first and only approved treatment for Friedreich’s ataxia (FA) in the United States, with a commercial launch underway, and European regulatory review ongoing. In addition, Reata is developing a portfolio of innovative products for a range of neurological diseases, including cemdomespib for the treatment of patients with diabetic neuropathic pain.

“With extensive expertise in rare disease product development and global commercialization, as demonstrated by Spinraza and the recent launch of Qalsody, we believe Biogen has the foundation in place to accelerate the delivery of Skyclaris to patients around the world,” said Christopher Viehbacher, Biogen’s president and CEO. “This is a unique opportunity for Biogen to bolster our near-term growth trajectory, and Skyclaris is an excellent complement to our global portfolio of treatments for neuromuscular and rare disease.”

Viehbacher was CEO at Sanofi when he engineered the French pharmaceutical’s $20 billion purchase of Genzyme in 2011.

“Biogen’s expertise and commercial footprint make it the optimal choice to help Skyclaris realize its full potential,” said Warren Huff, chairman and CEO of Reata. “With its clear understanding of the rare disease patient journey and existing commercial infrastructure, we believe Biogen will establish Skyclaris as the standard of care in the treatment of this devastating genetic disease.”

The transaction, which was approved by the boards of directors of both companies, is currently anticipated to close in the fourth quarter of 2023. Biogen expects this acquisition to be accounted for as a business combination. The acquisition of Reata is expected to be slightly dilutive to Biogen’s Non-GAAP diluted Earnings Per Share in 2023, roughly neutral in 2024, and significantly accretive beginning in 2025, inclusive of associated transaction costs. Biogen plans to update its Full Year 2023 Financial Guidance in conjunction with its third quarter 2023 earnings release.

Biogen expects to finance the acquisition with cash on hand, supplemented by the issuance of term debt. The transaction is subject to customary closing conditions, including approval by Reata stockholders and the receipt of necessary regulatory approvals. Biogen has entered into voting and support agreements with certain stockholders of Reata representing approximately 36 percent of the voting power of Reata’s common stock.

Friedreich’s ataxia is an ultra-rare, genetic, life-shortening, debilitating, and degenerative neuromuscular disorder typically caused by a trinucleotide repeat expansion in the first intron of the frataxin gene, which encodes the mitochondrial protein frataxin. Pathogenic repeat expansions can lead to impaired transcription and reduced frataxin expression, which can result in mitochondrial iron overload and poor cellular iron regulation, increased sensitivity to oxidative stress, and impaired mitochondrial ATP production. Patients with Friedreich’s ataxia typically experience symptoms in childhood, including progressive loss of coordination, muscle weakness, and fatigue that commonly results in motor incapacitation with patients requiring a wheelchair in their 20s. It is estimated that there are approximately 5,000 patients diagnosed with Friedreich’s ataxia in the United States.

Skyclaris is an oral, once-daily medication indicated for the treatment of Friedreich’s ataxia in adults and adolescents aged 16 years and older in the U.S. Additionally, the company’s Marketing Authorization Application for omaveloxolone is under review in Europe by the European Medicines Agency. The European Commission has granted Orphan Drug designation in Europe to omaveloxolone for the treatment of Friedreich’s ataxia.

Photo: Christopher Viehbacher, Biogen’s president and CEO

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