July 28 (Reuters) – Biogen (BIIB.O) agreed to buy rare disease drugmaker Reata Pharmaceuticals (RETA.O) for nearly $6.5 billion, the first large acquisition under new CEO Christopher Viehbacher as he seeks to return the drugmaker to growth.
Viehbacher was hired in November to put Biogen back on a growth path after a series of missteps around the controversial Alzheimer’s drug Aduhelm hurt the company that was already grappling with intense competition to its top-selling drugs.
Through the deal, Biogen said it will gain Texas-based Reata’s recently approved drug Skyclarys to treat a rare genetic disorder that causes progressive damage to the nervous system.
“We believe Biogen has the foundation in place to accelerate the delivery of Skyclarys to patients around the world,” Viehbacher said in a statement.
It already makes Spinraza, a treatment for rare muscle-wasting disorder spinal muscular atrophy, and a treatment for a rare type of amyotrophic lateral sclerosis.
“We’re positive on the deal given Biogen’s established presence in rare neurological disease (and) relatively low cost, said BMO analyst Evan Seigerman.
Biogen is also expecting the launch of a new Alzheimer’s drug Leqembi, sold with partner Eisai (4523.T), to drive growth, but costs related to the launch could offset modest sales this year.
So Biogen has been seeking to complement its portfolio with drugs that boost near-term growth with deals in areas such as rare diseases and immunology.
Reata’s Skyclarys is the first approved treatment for Friedreich’s ataxia, which affects about one in every 50,000 people, in the United States.
Biogen will pay $172.50 per share in cash, which represents a 58.9% premium to Reata’s last closing price.
Reata’s shares surged 52.1% to $165.10 in premarket trading, while Biogen’s shares were up nearly 1% at $265.
Including debt, the deal values Reata at roughly $7.3 billion.
Reporting by Manas Mishra and Bhanvi Satija in Bengaluru; Editing by Shinjini Ganguli
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