## Biogen's Strategic Leap: Acquiring Reata Pharmaceuticals to Strengthen Rare Disease Portfolio

In a landmark move within the biotech sector, Biogen has disclosed plans to acquire Reata Pharmaceuticals in an all-cash transaction valued at $172.50 per share, translating to an enterprise value of approximately $7.3 billion. The deal, announced on July 28, 2023, marks a pivotal expansion of Biogen's footprint in the rare neurological disease space, particularly through the acquisition of SKYCLARYS®—an innovative treatment that holds significant promise for patients.

### The Crown Jewel: SKYCLARYS® and Its Market Position

At the heart of this acquisition lies SKYCLARYS® (omaveloxolone), a groundbreaking FDA-approved medication that represents the first and only approved therapeutic option for Friedreich's ataxia (FA) in the United States. The drug, currently in commercial rollout domestically and under regulatory review in Europe through the European Medicines Agency, addresses a severe unmet medical need in a patient population of approximately 5,000 individuals across the U.S.

Friedreich's ataxia is a rare genetic neuromuscular disorder characterized by progressive loss of coordination, muscle weakness, and fatigue—conditions that typically result in wheelchair dependency by patients' early 20s. SKYCLARYS® functions by regulating cellular metabolism and inflammation, offering a novel therapeutic mechanism for this devastating condition.

### Strategic Rationale and Competitive Positioning

Christopher Viehbacher, President and Chief Executive Officer of Biogen, emphasized that the company's extensive expertise in rare disease development and global commercialization—demonstrated through products like SPINRAZA and the recently launched QALSODY—positions it ideally to accelerate SKYCLARYS® delivery worldwide. This acquisition strengthens Biogen's near-term growth trajectory while bolstering its comprehensive neuromuscular and rare disease treatment portfolio.

Warren Huff, Chairman and Chief Executive Officer of Reata Pharmaceuticals, highlighted that Biogen's sophisticated commercial infrastructure and deep understanding of the rare disease patient journey make it the optimal partner to establish SKYCLARYS® as the standard of care in Friedreich's ataxia treatment.

### Financial Implications and Transaction Timeline

The transaction is anticipated to close in the fourth quarter of 2023, pending customary closing conditions including stockholder approval and regulatory clearances. Biogen has already secured voting support agreements from Reata stockholders representing approximately 36% of the company's voting power.

From a financial perspective, the acquisition is projected to be slightly dilutive to Biogen's Non-GAAP diluted earnings per share (EPS) in 2023, remain roughly neutral in 2024, and become significantly accretive beginning in 2025. Biogen intends to fund the acquisition using cash reserves supplemented by term debt issuance.

### Reata Pharmaceuticals' Broader Pipeline

Beyond SKYCLARYS®, Reata Pharmaceuticals continues advancing a portfolio of innovative therapeutics targeting serious neurological conditions. The company is currently developing cemdomespib for diabetic neuropathic pain treatment, representing additional value within the acquisition framework.

### Market Context and Industry Implications

This transaction underscores the ongoing consolidation within the biotech sector, particularly as larger pharmaceutical companies seek to expand rare disease capabilities and secure innovative products with clear market differentiation. The $7.3 billion valuation reflects market confidence in SKYCLARYS®' commercial potential and the premium placed on FDA-approved, first-in-class therapeutics addressing significant patient populations with limited treatment alternatives.