The Reata Pharmaceuticals roller coaster continues with the announcement today that Cambridge, Massachusetts-based Biogen Inc. has agreed to acquire the North Texas pharmaceutical company for $7.3 billion.
Reata was founded in 2002 by CEO Warren Huff, who was trained as a lawyer but transitioned into pharmaceuticals after some experience in the industry made him interested in making an impact in healthcare. The company suffered a recent setback and celebration prior to today’s acquisition. Earlier this year, Reata announced it would end research on an experimental pill to treat a rare genetic kidney disease after the FDA rejected the treatment.
“It was devastating for us, but we managed through the year,” Huff told D CEO Healthcare earlier this year. “We suffered a big loss.”
But what once was a loss is now a sizable gain. Reata followed up with the announcement that it was preparing to go to market with a drug called Skyclarys, which treats Friedrich’s ataxia and received FDA approval in March. Friedrich’s ataxia is a rare inherited neuromuscular condition that develops in children and worsens over time. It has no cure and can cause slurred speech, fatigue, trouble walking, loss of reflexes, hearing loss, and vision loss that Huff compared to ALS. Skyclarys is the first disease-specific treatment for the disease.
Biogen is a multinational biotechnology company founded in 1978 by scientists who would go on to win Nobel Prizes and focuses on neurological disease treatments. In 2022, it finished the year with $10.1 billion in revenue and had more than 9,000 employees. It has grown through six acquisitions over the past 20 years, spending billions of dollars along the way. Reata is the company’s largest acquisition.
A release about the acquisition highlighted Skyclarys and Reata’s ability to develop therapeutics that regulate cellular metabolism and inflammation in neurologic diseases. Reata is launching Skyclarys commercially in the US and under regulatory review in Europe.
“With extensive expertise in rare disease product development and global commercialization, as demonstrated by SPINRAZA and the recent launch of QALSODY, we believe Biogen has the foundation in place to accelerate the delivery of SKYCLARYS to patients around the world,” said Christopher Viehbacher, Biogen’s President and Chief Executive Officer. “This is a unique opportunity for Biogen to bolster our near-term growth trajectory, and SKYCLARYS is an excellent complement to our global portfolio of treatments for neuromuscular and rare disease.”
Huff reported earlier this year that the approval and launch of Skyclarys were massive for the company, especially after previous setbacks. Today’s news will likely echo the Skyclarys celebrations in Reata’s Plano headquarters. Reata announced that it would charge $370,000 for Skyclarys, but out-of-pocket costs are expected to be nominal due to insurance and assistance programs.
“Biogen’s expertise and commercial footprint make it the optimal choice to help SKYCLARYS realize its full potential,” Huff says. “With its clear understanding of the rare disease patient journey and existing commercial infrastructure, we believe Biogen will establish SKYCLARYS as the standard of care in the treatment of this devastating genetic disease.”
The acquisition is another feather in the cap of the growing healthcare and biotech industry in North Texas. CVS Health acquired home-based and value-based care platform Signify Health for $8 billion last year, and Merck acquired cancer drug developer Peloton in 2019.
Huff told D CEO Healthcare that Skyclarys may only be the beginning for this avenue of treatment, likely making the company an even more attractive acquisition target. The pathway Skyclarys utilizes improves the function of a cell’s mitochondria, which is a significant factor in fighting other neurological conditions like Alzheimer’s, ALS, and Huntingdon’s disease. “There are many follow-on developmental opportunities,” Huff says. “We are expanding our pipeline with the same science.”
The deal has been approved by both boards of directors and is expected to close in the fourth quarter of this year.
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