Biogen acquires Reata for $6.5 billion to strengthen rare disease portfolio.

Biogen Bolsters Position in Rare Disease Drugs Market with Purchase of Reata Pharmaceuticals

July 28, 20ANBLE – In a move to reinforce its presence in the realm of rare disease drugs, Biogen (BIIB.O) has acquired biotech firm Reata Pharmaceuticals (RETA.O) for a whopping $6.5 billion. This strategic purchase comes as Biogen’s older multiple sclerosis drugs face intense competition and the company seeks to expand its portfolio with drugs that ensure near-term growth.

Through this substantial deal, Biogen gains access to Reata’s recently approved drug, Skyclarys. Skyclarys is designed to treat Friedreich’s ataxia, a rare genetic disorder that leads to progressive damage to the nervous system. With this acquisition, Biogen is asserting its commitment to diversifying beyond its multiple sclerosis drugs portfolio that is facing mounting pressure from competition. CEO Christopher Viehbacher expressed his optimism about the acquisition, stating, “We believe Biogen has the foundation in place to accelerate the delivery of Skyclarys to patients around the world.”

While Biogen has garnered investor attention with the Alzheimer’s drug, Leqembi, developed in partnership with Eisai (4523.T), the company has been actively seeking opportunities to augment its portfolio to bolster near-term growth under the leadership of CEO Viehbacher. Although Leqembi received U.S. approval earlier this month, paving the way for wider insurance coverage, Biogen anticipates that the costs associated with the drug’s launch will offset modest sales within this year.

“We’ve thought that Reata is one of the few logical takeover targets for Biogen,” commented Stifel analyst Paul Matteis, noting that the deal aligns with Biogen’s objective of near-term sales growth. Reata’s Skyclarys currently stands as the only approved treatment for Friedreich’s ataxia, a condition that affects roughly one in every 50,000 people in the United States.

Biogen is no stranger to rare disease treatments. The company already produces Spinraza, a drug used to address spinal muscular atrophy, a rare muscle-wasting disorder. Additionally, they offer a treatment for a rare form of amyotrophic lateral sclerosis.

As part of the acquisition agreement, Biogen will pay $172.50 per share in cash, representing an impressive premium of 58.9% over the last closing price of Reata. This deal values Reata at approximately $7.3 billion when factoring in its existing debt.

Upon the announcement of the acquisition, Reata’s shares skyrocketed by over 50% to $164.50 in premarket trading. Conversely, Biogen’s shares saw a marginal decline.

With the acquisition of Reata Pharmaceuticals, Biogen is reinforcing its position in the rare disease drugs market with the addition of Skyclarys. This move aligns with the company’s strategy to diversify beyond its multiple sclerosis drugs portfolio, especially amidst intensifying competition. As Biogen continues to expand its repertoire of treatments for rare diseases, it is poised for near-term sales growth and solidifying its presence as a leader in the field of biotechnology.

Note: This article has been rewritten based on the original source: Reuters

Biogen acquires Reata for $6.5 billion to strengthen rare disease portfolio.

Biogen Bolsters Position in Rare Disease Drugs Market with Purchase of Reata Pharmaceuticals

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