(Reuters) -Biogen said it would buy biotech firm Reata Pharmaceuticals for roughly $6.5 billion to expand its presence in the rare disease drugs market.
Through the deal, Biogen will gain Plano, Texas-based Reata’s recently approved drug Skyclarys to treat a rare genetic disorder that causes progressive damage to the nervous system.
Skyclarys is the only approved treatment for Friedreich’s ataxia, which affects about one in every 50,000 people, in the United States.
Shares of Reata were halted in premarket trading, while Biogen fell about 3% after the news.
“We believe Biogen has the foundation in place to accelerate the delivery of Skyclarys to patients around the world,” Biogen CEO Christopher Viehbacher said in a statement.
Biogen has said it would look at deals across rare diseases, immunology and neuropsychiatry, as it looks to bulk up its portfolio beyond Alzheimer’s drug Leqembi.
The company will pay $172.50 per share in cash, which represents a 58.9% premium to Reata’s last closing price.
Including debt, the deal values Reata at roughly $7.3 billion.
Biogen expects to finance the acquisition with cash on hand, supplemented by the issuance of term debt.
(Reporting by Bhanvi Satija in Bengaluru; Editing by Shinjini Ganguli)