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Biogen To Buy Plano-Based Reata Pharmaceuticals

Biogen will assume control of a new drug that treats a rare disease
Photo: Melnikov Dmitriy | Shutterstock

Biogen Inc. plans to acquire Plano-based Reata Pharmaceuticals Inc. for $7.2 billion. 

This is Biogen's first acquisition since Christopher Viehbacher took over as CEO. This week, the company also announced its plans to lay off 1,000 people as part of a redesign. Executives estimate to save $700 million as competition from generics continues to cut into profits.

According to the Dallas Business Journal, Biogen entered into an agreement to acquire Reata Pharmaceuticals at a price of $172.50 per share, representing a significant 59% increase over Reata's closing price on July 27, 2023. As of 10 a.m. on July 28, 2023, Reata's share value surged to $165.66, resulting in a market capitalization of $6.2 billion for the North Texas biotech company.

Meanwhile, Biogen experienced a minor dip of less than 1% during the same period, with their shares now valued at $260.23 each. The Cambridge-based drug manufacturer currently boasts a market capitalization of $37.7 billion. 

Through this acquisition, Biogen will assume control of the commercial launch of Skyclarys, a drug designed to treat Friedreich's ataxia, a rare neurological disorder characterized by the degeneration of nerve fibers in the spinal and peripheral nerves, leading to muscle weakness, impaired balance and coordination loss over time. Viehbacher is actively seeking opportunities to expand Biogen's presence in the rare-disease domain, emphasizing multiple times this year that the company's expertise in spinal muscular atrophy, with Spinraza, and amyotrophic lateral sclerosis, with Qalsody. 

"We believe Biogen has the foundation in place to accelerate the delivery of Skyclarys to patients around the world," Viehbacher said in a statement.

According to Reuters, Biogen is placing its hopes on the launch of Leqembi, a new Alzheimer's drug marketed in partnership with Eisai. However, the company acknowledges that expenses associated with the drug's launch might counterbalance the modest sales expected for the year.

With the acquisition of Reata Pharmaceuticals, Biogen enhancing its portfolio with drugs that can contribute to immediate growth. The company is pursuing deals in various areas, including rare diseases and immunology, as a strategy to complement its existing offerings.