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Reata Pharma Announces $350 Million Strategic Investment from Blackstone Life Sciences

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Shares of Reata Pharmaceuticals traded 30% higher after reporting that Blackstone Life Sciences will invest $350 million in the company to advance bardoxolone methyl as a potential therapy for Alport syndrome and other rare and serious chronic kidney diseases.

Clinical-stage biopharmaceutical company Reata Pharmaceuticals Inc. (RETA:NASDAQ) and Blackstone Group Inc. (BX:NYSE) today announced that "funds managed by Blackstone Life Sciences will lead a $350 million royalty and equity investment in Reata to fund the development and potential commercialization of bardoxolone methyl, an investigational once-daily oral therapy being studied for chronic kidney disease (CKD) in Alport syndrome and autosomal dominant polycystic kidney disease (ADPKD)." The firms advised that these are life-threatening diseases with few or no effective U.S. Food and Drug Administration (FDA) approved therapies.

Global Head of Blackstone Life Sciences Nicholas Galakatos, Ph.D., stated, "This investment aligns with Blackstone Life Sciences' mission to help advance promising new medicines to patients with high unmet needs. If approved, bardoxolone has the potential to provide for the first time a therapy that improves the quality of life for tens of thousands of patients around the world suffering from Alport syndrome."

Reata's CEO and President Warren Huff commented, "Bardoxolone has been a primary focus of our company's research and development efforts to date...We are extremely pleased that Blackstone Life Sciences has recognized the potential of bardoxolone, and the potential of Reata more generally. We are proud to enter into this strategic investment agreement with Blackstone Life Sciences."

Paris Panayiotopoulos, senior managing director of Blackstone Life Sciences, added, "Bringing the first potential therapy to Alport syndrome patients, a devastating genetic condition with no approved treatments, is very motivating...With this investment, we will support Reata in further developing bardoxolone for CKD in Alport syndrome, autosomal dominant polycystic kidney disease and multiple other chronic kidney diseases."

Under the terms of the investment agreement, Blackstone Life Sciences will invest $300 million in Reata in return for certain royalty payments on worldwide bardoxolone net sales made by Reata and its licensees with the exception of sales by Kyowa Kirin Co. Ltd. As part of the deal, Blackstone Life Sciences will invest $50 million to buy 340,793 shares of Reata's Class A common stock at a price of $146.72 per share. The transaction is expected to close on or before June 24, 2020, with Reata receiving the $350 million investment upon closing.

Reata's COO and CFO Manmeet S. Soni remarked, "This $350 million financing further strengthens Reata's balance sheet, and extends Reata's cash runway through the end of 2023. It positions us to make strategic investments to further expand our development and commercial capabilities in preparation for the potential approval and launch of our drugs."

The company explained that "bardoxolone methyl is an investigational, oral, once-daily activator of Nrf2, a transcription factor that induces molecular pathways that promote the resolution of inflammation by restoring mitochondrial function, reducing oxidative stress, and inhibiting pro-inflammatory signaling, and that the FDA has granted Orphan Drug designation to bardoxolone for the treatment of Alport syndrome and ADPKD."

Reata Pharmaceuticals is a clinical-stage biopharmaceutical company based in Plano, Tex., that focuses on developing medicines for patients with serious or life-threatening diseases. The firm's therapeutics target molecular pathways that are involved regulation of cellular metabolism and inflammation.

Blackstone Life Sciences is a private, global investment firm that invests in numerous companies and products in the life science sectors.

Reata Pharmaceuticals has a market capitalization of around $4.4 billion with approximately 33.24 million shares outstanding and a short interest of about 11%. RETA shares opened 26% higher today at $165.00 (+$34.08, +26.03%) over yesterday's $130.92 closing price. The stock has traded today between $156.99 and $177.48 per share and is currently trading at $171.24 (+$40.32, +30.80%).

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