Biogen, a pharmaceutical company, has agreed to buy a biotech firm called Reata Pharmaceuticals for about $6.5 billion. The reason for this acquisition is to strengthen Biogen’s position in the market for drugs that treat rare diseases. Biogen’s older multiple sclerosis drugs are facing tough competition, so they want to expand into other areas like rare diseases and immunology.
With this deal, Biogen will gain access to Reata’s recently approved drug called Skyclarys. Skyclarys is used to treat a rare genetic disorder that causes progressive damage to the nervous system. Biogen believes that they are well-prepared to bring Skyclarys to patients worldwide.
Biogen has been looking for opportunities to grow, especially in the areas of rare diseases and immunology, since their multiple sclerosis drugs are under pressure from competitors. They want to complement their portfolio with drugs that can bring in revenue in the near future.
Reata’s Skyclarys is currently the only approved treatment for a rare condition called Friedreich’s ataxia, which affects around one in every 50,000 people in the United States.
The acquisition will cost Biogen $172.50 per share in cash, which is a significant premium compared to Reata’s last closing price. The deal values Reata, including its debt, at around $7.3 billion.
Biogen’s own shares were down slightly while Reata’s shares surged over 50% in premarket trading following the announcement of the acquisition.
Reata is a global company that creates new medicines for people with serious or life-threatening diseases that currently have few or no approved treatments available. They focus on studying how certain molecules in our bodies affect how cells work and how inflammation occurs. One of their products, SKYCLARYS® (omaveloxolone), has been approved by the FDA to treat Friedreich’s ataxia, and it is being reviewed by the EMA in Europe. Another medicine they are working on is called cemdomespib, which is being developed to help patients with diabetic neuropathic pain. It’s important to know that cemdomespib is still being investigated, and its safety and effectiveness have not yet been confirmed by any regulatory agency.
