On eve of pivotal data, Reata pays AbbVie $330M to regain cardiorenal candidates

With AbbVie having turned away from cardiovascular and renal indications, Reata reacquired rights to bardoxolone and second-generation NRF2 activators from its long-standing partner for $330 million in cash ahead of upcoming pivotal readouts for two of the compounds.

Reata Pharmaceuticals Inc. (NASDAQ:RETA), which gained $9.89 (13%) to $85.98 Thursday, expects data by year end from the Phase III portion of the CARDINAL study of bardoxolone methyl for chronic kidney disease caused by Alport syndrome and the Phase II MOXIe study of omaveloxolone for Friedreich ataxia, a neuromuscular disorder in which patients often have hypertrophic cardiomyopathy and some develop diabetes.

Reata Chairman, President and CEO Warren Huff told BioCentury that, with the readouts for therapies approaching, the company initiated discussions to reacquire rights to the compounds from AbbVie Inc. (NYSE:ABBV) and found its partner of nine years receptive to discussing a deal.

Huff, who is Reata’s founder and has held the three titles since the company formed in 2002, added that since 2012, AbbVie had “reoriented their strategic development activities to oncology, autoimmune and a handful of other areas and away from cardiorenal.”

As illustrated by its pending acquisition of Allergan plc (NYSE:AGN), AbbVie has also taken a step away from the focus on innovation it had when it split from Abbott Laboratories (NYSE:ABT) in 2013 (see “AbbVie Chooses Revenue Over Innovation with Allergan Takeout”).

Reata will pay AbbVie the first $75 million this year for the NRF2 (nuclear factor (erythroid-derived 2)-like 2; NFE2L2) activators and has amended a loan and security agreement with Oxford Finance LLC and Silicon Valley Bank to make the funds available upon positive top-line data from either CARDINAL or MOXIe. The remaining $255 million is payable in installments in 2Q20 and 4Q21.

Reata EVP and CFO Manmeet Soni told BioCentury that most of the $330 million was for bardoxolone. AbbVie remains eligible for tiered, low single-digit royalties for omaveloxolone and undisclosed next-generation NRF2 activators.

Abbott had exclusively licensed bardoxolone outside the U.S. and Asia in 2010 for $450 million, then paid another $400 million for worldwide rights to the second generation NRF2 activators in 2011. AbbVie inherited the compounds when it spun out of Abbott.

Reata terminated its trials of bardoxolone in CKD in 2012, including the Phase III BEACON trial in Type II diabetics, due to an excess of serious adverse events and mortality in Phase II testing. It subsequently identified two risk factors for toxicity and resumed clinical development (see “Reata, AIM, Backfire” and “AbbVie’s Plan B”).

Reata now has exclusive, worldwide rights to the second-generation NRF2 activators and rights to bardoxolone everywhere except some Asian territories, where Kyowa Kirin Co. Ltd. has rights.

In addition to the trial in Alport syndrome patients, Reata has bardoxolone in pivotal trials for pulmonary arterial hypertension associated with connective tissue disease and autosomal dominant polycystic kidney disease.

The company also plans to continue developing bardoxolone for IgA nephropathy, Type I diabetic CKD and focal segmental glomerulosclerosis but has not yet disclosed a timeline for pivotal trials in those indications.

AbbVie gained $1.15 to $74.45 on Thursday.

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