Biogen does a deal

And it's a sizable one. Biogen said Friday that it will acquire Reata Pharmaceuticals for $7.3 billion. The transaction values Reata at $172.50 per share, or a 59% premium to its Thursday close.

Reata sells a drug called Skyclarys, which treats people with Friedreich's ataxia, a rare, neurological disease. It received U.S. approval in February and is the only drug cleared to treat the condition, which causes progressive damage to the brain, nervous system, and muscles.

The acquisition of Reata gives Biogen a drug that fits well within its strategic focus on neurological diseases and is likely to boost near-term revenue growth. Investors may quibble with the high price Biogen is paying.

The timing of the deal is also noteworthy, coming relatively early in the tenure of new CEO Chris Viehbacher and just after significant changes were made to the composition of Biogen's board, which had a long history of blocking acquisitions.

adam's take

A physician's conflict of interest and Apellis's stock plummet

A Cleveland Clinic physician led the charge in flagging a rare but severe side effect caused by Syfovre, a newly approved eye drug made by Apellis Pharmaceuticals. But as STAT's Adam Feuerstein reports, Peter Kaiser, a retinal disease expert, consults for Iveric Bio, a competitor. Iveric is developing a treatment for geographic atrophy, which is the same indication that Syfovre was approved to treat.

The conflict was not disclosed until STAT contacted Kaiser. It matters because Kaiser chairs a committee of the American Society of Retina Specialists that monitors the safety of retina drugs and devices.

Once news of the drug's potential side effects emerged, use of Syfovre plummeted. Apellis' stock price dropped 63% — accounting for about $6 billion market value.

economics

What's next for biotech's floundering job market

Biotech had quite the heyday a few years ago — with startups flush with cash, even if their approach was questionable: "Investors were putting a lot of money into stupid science," one industry vet said. But, as The Boston Globe's Kara Miller reports, the climate today is different. Venture capital dollars funneled into Massachusetts companies dropped from $13.7 billion in 2021 to $8.7 billion in 2022, and it's even lower this year. Demand for lab space is diminishing, and only a negligible number of biotechs are going public these days.

So what's next? "Unfortunately, it might get worse before it gets better in terms of company shutdowns versus new company formation," one biotech real estate executive said. The worry is that more companies will run out of cash next year. But some folks believe the industry might be turning the corner. There are investors who are willing to deploy cash — if risks aren't too high and the science is right.

gene therapy

A potential single-shot gene therapy for blood disorders

Gene editing researchers have created a sort of "hit-and-run gene therapy" to correct misshapen blood cells, according to a new paper in Science. The new approach loads up lipid nanoparticles with mRNA, and speckles the outside of these cellular instruction manuals with antibodies. These help guide the therapy toward the hematopoietic stem cells in the bone marrow. From there, the mRNA payload ultimately helps correct the genetic defects that cause sickle cell disease.

Scientists were able to show that this approach works in human cells and in live mice. "What really struck me was, damn, how efficient it is," one gene therapy researcher not involved in the paper told STAT. This sort of in vivo gene editing is highly sought after because it could simplify treatment for people living with these diseases.

podcast

Why do CEOs talk like that?

Do biotech stock tips make good gifts? And what do Anthony Fauci and Stéphane Bancel have in common? We cover all that and more this week on "The Readout LOUD," STAT's biotech podcast.

First, we discuss why Wall Street was less than convinced by Biogen's attempt to assuage concerns about its credibility. Then we explain an insider trading scandal that bridges biotech and elite-level soccer, the latest concerns over Wegovy, and the rest of the week's news in the life sciences. We also break some bittersweet news, with the help of some headline names from around biotech.

Listen here.

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