Reata Raises $505 Million to Advance Rare Disease Drugs

On the heels of positive study data on its two lead experimental therapies for the treatment of rare diseases, Reata Pharmaceuticals has raised $505 million in a follow-on public offering of 2.76 million shares at $183 per share.

In mid-October, one week after Reata bought back rights to omaveloxolone and bardoxolone from AbbVie for $330 million, the company reported positive results from its registrational trial of omaveloxolone in patients with Freidreich’s Ataxia, a rare and progressive neuromuscular disease.

Then in mid-November, Reata reported that the phase 3 portion of a study of bardoxolone treatment in patients with chronic kidney disease caused by Alport syndrome met its primary and key secondary endpoints.

Alport syndrome is a rare, genetic form of chronic kidney disease (CKD) caused by mutations in the genes encoding type IV collagen, which is a major structural component of the glomerular basement membrane in the kidney.  The majority of patients with Alport syndrome require dialysis or a kidney transplant by the age of 25. 

Friedreich’s ataxia (FA) is an inherited autosomal recessive disorder caused by mutations in the FXN gene. Signs and symptoms usually begin in puberty and lead to progressive impaired muscle coordination, gradual loss of muscle strength and sensation in the arms and legs, muscle stiffness, and impaired speech.

Reata intends to use proceeds from the financing for working capital and general corporate purposes, which include, advancing the development of bardoxolone methyl and omaveloxolone through clinical trials, preparing to file for approval to market bardoxolone for the treatment of patients with Alport syndrome and omaveloxolone for the treatment of patients with Friedreich’s ataxia, planning for commercialization of its potential products, and making payments due under its agreement with AbbVie.

Bardoxolone methyl is an experimental, oral, once-daily activator of Nrf2, a transcription factor that induces molecular pathways that promote the resolution of inflammation by restoring mitochondrial function, reducing oxidative stress, and inhibiting pro-inflammatory signaling.

Omaveloxolone is an experimental, oral, once-daily activator of Nrf2, a transcription factor that induces molecular pathways that promote restoration of mitochondrial function, reduction of oxidative stress, and inhibition of pro-inflammatory signaling. It has been granted orphan drug designation for the treatment of Friedreich’s ataxia in the United States and in Europe.