In the second-biggest M&A deal so far in 2023, Biogen Inc. plans to acquire Reata Pharmaceuticals Inc. for an enterprise value of about $7.3 billion.

The acquisition brings U.S. FDA-approved Skyclarys (omaveloxolone) to Biogen. The anti-inflammatory Friedreich’s ataxia (FA) drug is the only approved treatment in the U.S.

In a Friday morning conference call with investors, Biogen CEO Chris Viehbacher said the treatment has a huge overlap with the company’s Spinraza (nusinersen). The synergies, he said, include Biogen’s existing commercial sales field force, which is already in place and large enough to successfully sell the drug.

The deal also gets Biogen more involved in the rare disease space, where Viehbacher said he wants the company to go. The deal is expected by Biogen to close in the fourth quarter of this year.

FA is a rare, degenerative neuromuscular disorder, which begins in childhood and is typically caused by a mutation in the frataxin gene, leading to damage to the spinal cord, peripheral nerves and cerebellum, causing unsteady movements and loss of sensation due to nerve injury.

Skyclarys could reach around 4,500 eligible FA patients in the U.S., according to Reata.

But there could be more than thought. Regarding rare diseases, Viehbacher said, once treatments become widespread, there are almost always more patients than expected.

Through its mechanism of action of activating nuclear factor erythroid-2 related factor 2, orally administered Skyclarys induces molecular pathways to resolve inflammation by restoring mitochondrial function, reduce oxidative stress and inhibit pro-inflammatory signaling.

Omaveloxolone was awarded fast track status by the FDA in November 2021. It also has orphan drug and rare pediatric disease designations for the indication.

Reata’s stock (NASDAQ:RETA) soared in early trading on July 28, with shares trading 53% upward at $166 each.

The largest M&A of the year was in June, when Merck & Co. Inc. acquired Prometheus Biosciences Inc. for $10.8 billion, according to BioWorld statistics. Prometheus became a wholly owned subsidiary of Merck, with lead candidate, PRA-023, a humanized monoclonal antibody directed to tumor necrosis factor-like ligand 1A, changing names to MK-7240.

The largest deals of Q1 include one worth $4.05 billion between Bristol Myers Squibb Co. and Evotec SE in March focused on neurodegenerative disease therapies. Abbvie Inc. and Immunome Inc. also signed in January a deal worth $2.8 billion for oncology antibody targets. Macrogenics Inc. and Synaffix BV expanded their partnership with another $2.2 billion in March for next-generation antibody-drug conjugates.

There were 15 mega-deals, or those worth $1 billion or more, in 2023’s Q1, worth a combined $26.7 billion – 56% of the overall deal value for the quarter. This compares with 21 worth $40.1 billion during 2022’s Q1, which represented the highest number ever for a first quarter. There were 15 mega-deals in the first quarter of 2021, 13 in 2020 and 10 in 2019.