Biogen is spending more than $7 billion to buy Reata Pharmaceuticals and bolster its rare disease treatments.
The Alzheimer’s treatment developer said Friday it will pay $172.50 in cash for each share of Reata in a deal it expects to close by the end of this year.
Plano, Texas-based Reata focuses on developing treatments that regulate cellular metabolism and deal with inflammation in serious neurologic diseases. It makes Skyclarys, an FDA-approved treatment for the neurologic disorder Friedreich’s ataxia.
Biogen puts an enterprise value of $7.3 billion on the acquisition, and said it would slightly dilute adjusted earnings per share this year, and be roughly neutral next year before becoming “significantly accretive” in 2025.
Regulators and Reata shareholders still need to approve the deal.
Biogen makes the multiple sclerosis treatments Techfidera and Tysabri as well as the spinal muscular atrophy treatment Spinraza. It also is partnering with Japanese drugmaker Eisai to sell the new Alzheimer’s treatment Leqembi.
CEO Christopher Viehbacher said in a statement the company’s experience developing and selling rare disease treatments will help expand the market for Skyclarys, which is being reviewed by European regulators.
Friedreich’s ataxia is caused by a gene defect inherited from both parents, according to Johns Hopkins Medicine. It can lead to vision and hearing loss, trouble walking, and heart problems. Many patients with it wind up in a wheelchair.
Viehbacher has been focused on cutting costs at Biogen and developing the company’s pipeline of potential drugs since he became CEO last November. Biogen has been dealing with sliding sales for its multiple sclerosis treatments and the failed launch of its Alzheimer’s treatment Aduhelm.
Viehbacher said on Tuesday, after the company reported better-than-expected second quarter results, that Biogen is “laser focused” on changing the company’s share price trajectory.
“As I’ve heard from so many investors, our share price hasn’t really moved in 10 years, so that’s where we are focused on really driving … shareholder value,” he said. “And that means allocating capital in a way that’s commensurate with that.”
Shares of Reata Pharmaceuticals Inc. soared 52% to $165 in pre-market trading Friday. Biogen Inc.’s stock climbed 1% to $266.
Sourse: abcnews.go.com
