July 28 (Reuters) - Biogen agreed to buy rare disease drugmaker Reata Pharmaceuticals 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, which 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 the rare muscle-wasting disorder called spinal muscular atrophy, and a treatment for a rare type of amyotrophic lateral sclerosis.
Biogen is banking on the launch of a new Alzheimer's drug Leqembi, sold with partner Eisai, to drive growth, but has said costs related to the launch could offset modest sales this year.
The drugmaker, therefore, 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, sold at an annual list price of $370,000, is the first approved treatment for Friedreich's ataxia, which affects about one in every 50,000 people, in the United States.
Sales of the drug are expected to touch $1.3 billion by 2029, according to Refinitiv data, and analysts said Biogen could use its existing infrastructure to speed up the drug's launch.
"We like the broad strokes of the deal but see the price as challenging," said Baird analyst Brian Skorney, adding the drug would need to gain European approval to become a blockbuster treatment.
Viehbacher said that though the deal was "sizeable", it would not prevent future acquisitions.
Biogen said it will pay Reata $172.50 per share in cash, which represents a 58.9% premium to the stock's last closing price. Including debt, the deal values Reata at roughly $7.3 billion.
Shares of Reata surged nearly 52% to $164.76 in early trading, while Biogen's shares fell marginally to $261.14.
Reporting by Manas Mishra and Bhanvi Satija in Bengaluru; Editing by Shinjini Ganguli
Source: Reuters