Does Biogen's Latest $1.5 Billion-Dollar Move Make It a Buy?

As you may have heard this summer, Biogen (NASDAQ: BIIB) is taking out a $1.5 billion-dollar loan to fund its acquisition of rare disease drug developer Reata Pharmaceuticals (NASDAQ: RETA) for $7.3 billion in cash. When all's said and done, the move will mark the start of a new era for the business in which it'll test the waters outside its familiar markets.

Shareholders may well see significant benefits -- assuming the new addition can contribute as planned. But will Reata make for a stronger investing thesis for Biogen?

Buying Reata Pharmaceuticals will accomplish a couple of things for Biogen. First, it'll gain control of Reata's newly approved drug Skyclarys, which is the only medicine approved to treat Friedreich's ataxia. This rare and degenerative hereditary disease causes trouble with movement.

Continue reading


Source Fool.com