Reata Pharmaceuticals on Tuesday closed a stock sale, raising $505.1 million to advance the company’s two lead drug candidates to regulatory review.
Reata’s stock price jumped last week after the company announced its investigational drug, bardoxolone methyl (bard), met the main goal of a Phase 3 clinical trial testing it as a treatment for Alport syndrome, a rare kidney disorder. Based on those results, Reata (NASDAQ: [[ticker:RETA]]) plans to submit a new drug application to the FDA.
The company also reported positive results in October for a second drug, omaveloxolone, which is being tested as a treatment for Friedrich’s ataxia, a rare mitochondrial disorder. The funds also will help Reata prepare a new drug application for omaveloxolone.
Both bardoxolone and omaveloxolone target Nrf2, a transcription factor called that helps regulate vital biological processes, including mitochondrial function. Nrf2 also helps reduce oxidative stress and inhibits pro-inflammatory signaling, according to the company.
Besides supporting the two lead drugs, the new Reata will use the new funds to pay AbbeVie (NYSE: [[ticker:ABBV]]) as part of the $330 million deal that brought bardoxolone to the Texas company. Reata made an upfront payment of $75 million earlier this year and will pay the remainder in installments in the second quarter of 2020 and in the fourth quarter of 2021.
While AbbVie is not eligible to receive royalties on barboxolone, Reata will pay the company low single-digit, tiered royalties from sales of omaveloxolone, and potentially other next-generation Nrf2 activators, should they reach the market.
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