Welcome to North Texas, Christopher Viehbacher.
The CEO of drug maker Biogen is joining forces with Plano-based Reata Pharmaceuticals after announcing a $7.3 billion cash deal to acquire it on Friday.
Reata’s company headquarters are on Legacy Drive.
When the deal closes, Massachusetts-based Biogen will pick up the rights to Reata’s heralded drug Skyclarys, the first FDA-approved medication to treat the genetic disorder Friedreich’s ataxia.
The genetic disease damages the nervous system, with patients having a life expectancy of around 37 years.
Analysts predict that Skyclarys could have more than $1.1 billion in annual sales by 2028, The Wall Street Journal reported.
Viehbacher said Biogen’s sales force would accelerate the launch of Skyclarys.
“Commercial execution in the rare disease space is a very distinct skill set built up over time,” Viehbacher said on a conference call with analysts.
Viehbacher took over as Biogen’s president and CEO in November. He inherited a drug maker that specializes in neurological diseases. However, it has been hobbled lately by lower stock prices and sales.
The company announced on July 25 it would be laying off nearly 1,000 of its 8,700 workers. It said the cuts would help reduce operating expenses by about $1 billion by 2025.
“You have to be cost-efficient, and you have to invest in growth,” Viehbacher said on the conference call. “And that is a very tricky exercise.”
The multibillion-dollar deal with Reata amounted to $172.50 per share, including the company’s debt. Reata’s stock price at the close of business Thursday was $108.55, so Viehbacher agreed to pay a 57% premium to pull off the acquisition.
Reata, which surged to $167.19 per share on Friday, expects the deal to close in the fourth quarter.
“With extensive expertise in rare disease product development and global commercialization, we believe Biogen has the foundation in place to accelerate the delivery of Skyclarys to patients around the world,” Viehbacher said, per a press release.
“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,” he said.
Reata CEO Warren Huff said Biogen’s expertise and commercial footprint will help Skyclarys reach 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,” Huff said in a statement.
When the two companies come together, Reata’s 345 employees and the North Texas business community will find Viehbacher has extensive international experience. He has managed large pharmaceutical companies and entrepreneurial biotech companies, according to a press release announcing his hiring. He was the CEO at Sanofi, a French pharmaceutical company, for six years before coming to Biogen.
Viehbacher has been a strong advocate for innovation and public health. He has received many awards, including the Légion d’Honneur from France, the press release said.
“Chris is the rare pharma executive who has a keen understanding of the complexities involved in running a multibillion-dollar global pharma business as well as a deep appreciation for the value of innovation,” Stelios Papadopoulos, chairman of Biogen’s board, said in the news release.
“It was the combination of these attributes that enabled him to turn around Sanofi and leave behind a much better company compared to the one he inherited. I look forward to Chris leading Biogen to the next chapter of its evolution and, on behalf of the board, I pledge our support to his effort,” he said.
Viehbacher said he admired Biogen for its determination and resilience in pioneering new medicine “to address some of the most difficult and challenging conditions in healthcare.”
“I am inspired by Biogen’s mission and untapped potential and look forward to working with the dedicated Biogen team to build an even stronger company for the benefit of patients, stakeholders, and investors,” he added.