During a quarterly earnings call, Biogen CEO Chris Viehbacher unexpectedly mentioned that the company had around $7.3 billion in cash. Just days later, Biogen revealed its proposal to acquire Reata Pharmaceuticals for the exact amount of $7.3 billion. The deal offers a 59% premium on Reata’s shares, and it grants Biogen access to Skyclarys, the first treatment for the rare neurologic disorder Friedreich’s ataxia, with an estimated sales potential of $1.5 billion by 2030.
Viehbacher stated that Biogen is the ideal fit for Skyclarys and sees opportunities for synergies in its commercialization alongside two of its existing products—Spinraza for spinal muscular atrophy (SMA) and the newly approved Qalsody for amyotrophic lateral sclerosis (ALS).
Related: Biogen Anticipates 1,000 Further Layoffs By 2025 As It Navigates A “Transition”
The acquisition of Reata comes in the context of Biogen’s ongoing restructuring efforts, with plans to lay off 1,000 employees, amounting to 11% of its workforce, by the end of 2024. The company’s revenues have seen declines over the past three years, and Viehbacher’s initiative “Fit For Growth” aims to revamp the organization through reengineering, beyond mere cost reduction exercises.
Following its quarterly report, Biogen announced its intention to undergo a significant restructuring, including the layoff of 1,000 employees, representing approximately 11% of its workforce. The restructuring plan, led by CEO Chris Viehbacher, aims to revamp the company’s operations, particularly in light of revenue declines observed over the past three years, dropping from $14.4 billion in 2019 to $10.2 billion in the previous year.
The strategic acquisition of Reata Pharmaceuticals aligns with Biogen’s focus on rare diseases and its goal to optimize its product portfolio, positioning the company for growth in the ever-evolving pharmaceutical landscape.
