In one of the largest biopharmaceutical deals in memory, Plano-based Reata Pharmaceuticals has agreed to be acquired by Biogen, Inc. in a cash transaction that values Reata at $7.3 billion.
Based in Cambridge, Massachusetts, Biogen cited its interest in Reata’s advanced development of therapeutics aimed at regulating cellular metabolism and inflammation related to a variety of neurologic diseases. The two companies expected to close the deal, billed as a combination, in the fourth quarter of 2023.
Lazard acted as financial advisor to Biogen and Cravath, Swaine & Moore as its legal advisor. Goldman Sachs acted as financial advisor to Reata and Vinson & Elkins served as outside counsel.
The 30-lawyer Vinson & Elkins team was led by partners Lande Spottswood, Robert Kimball and Katherine Frank and senior associate Sang Lee, with assistance from senior associate Grace-Ann Duquette and associates Luke Strieber, Jack Peterson, Nina Ramachandran, Katherine Harclerode and Patience Li. Other key team members were partners David Peck and Brian Russell, counsel Peter Rogers and associate Maddie Brown (tax); partner Shane Tucker, counsel Missy Spohn and Kat Mull and associate Matt Green (executive compensation/benefits); partner Sean Becker and associate Andrew Cox (employment/labor); partners Kara Kuritz and Hill Wellford, senior associate Ryan Will and associate Alex Rant (antitrust); partner Rick Sofield (CFIUS); counsel Brian Howard (FCPA); counsel Elizabeth McIntyre (sanctions); counsel Rajesh Patel and associate Warner Scott (technology transactions/IP); and partner Sarah Mitchell (insurance).
That Reata’s chief legal officer Michael Wortley chose Vinson & Elkins to advise on the transaction comes as little or no surprise. Before his retirement from V&E in 2015 he served for 16 years as head of the firm’s corporate law department. From that position he oversaw many of the lawyers involved with V&E’s Reata team. He also serves as a member of the board of directors of Irving-based Pioneer Natural Resources.
Biogen expects to finance the acquisition with cash on hand and term debt. Biogen has entered into voting and support agreements with certain stockholders of Reata representing approximately 36 percent of the voting power of Reata’s common stock. The $7.3 billion enterprise value is implied by their offer of $172.50 per share of Riata common stock.
Reata’s FDA-approved therapeutic omaveloxolone, branded as SKYCLARYS, is the first and only approved treatment for Friedreich’s ataxia (FA) in the U.S., with a commercial launch underway, and European regulatory review. In addition, Reata is developing a portfolio of innovative products for a range of neurological diseases.
Said Christopher Viehbacher, Biogen’s president and CEO: “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.”
Warren Huff, chairman and CEO of Reata returned the compliment, citing Biogen’s track record in similar therapeutics as a foundation of the deal.
“Biogen’s expertise and commercial footprint make it the optimal choice to help SKYCLARYS realize its full potential. 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.”