Biogen acquires Texas firm for $7.3 billion
To bulk up treatments for rare diseases
It has been anything but a summer vacation week for Biogen.
Just days after the company said it will cut about 1,000 jobs as it readies for the launch of a highly anticipated Alzheimer’s disease treatment, the Cambridge biotech on Friday said it will pay $7.3 billion to buy Plano, Texas-based Reata Pharmaceuticals in an effort to bolster its roster of rare disease treatments.
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 Freidreich’s ataxia. That condition is caused by a gene defect inherited from both parents, according to Johns Hopkins Medicine. It can lead to vision and hearing loss and trouble walking, among other symptoms.
Regulators and Reata shareholders still need to approve the deal, which could close by year’s end.
Biogen CEO Christopher Viehbacher said in a statement that the company’s experience developing and selling rare disease treatments will help expand the market for Skyclarys, which is being reviewed by European regulators.
On Tuesday, Biogen said it will eliminate roughly 11 percent of its workforce, as part of a plan to decrease costs by $700 million by 2025. The company, which had 8,725 employees worldwide at the end of last year, didn’t specify where the cuts will take place. Viehbacher told reporters after the company’s second-quarter earnings call on Tuesday that “there will be an impact in Massachusetts, and it’s a little too early yet to say exactly how many.”
In recent years, Biogen has slashed hundreds of jobs in Massachusetts as its market for expensive multiple sclerosis treatments shrinks, and it works to recover from the failure of its earlier Alzheimer’s drug, Aduhelm. It now has about 2,100 employees in the state, company spokesman Jack Cox said, compared with about 2,300 in April.
Leqembi, the new Alzheimer’s drug it co-developed with Japanese business partner Eisai, was given full approval by the Food and Drug Administration in early July. It has a list price of $26,500 a year per patient.
Biogen also hopes to win FDA approval by Aug. 5 for a postpartum depression and major depression treatment called zuranolone that it has collaborated on with Sage Therapeutics of Cambridge.
“Biogen’s business is in transition,” Viehbacher said in a statement Tuesday.
“We’ve had to be a lot more thoughtful about what’s the best way to position Biogen going forward,” he told analysts. “The company is well-positioned now to be oriented toward growth.”