DBJ: Reata adding jobs, stays in Dallas

Deal positions N. Texas for possible biopharmaceutical hub, Reata chief says

Monday, October 04, 2010

Dallas Business Journal by Bill Hethcock, Staff Writer

An $800 million deal between North Texas drug development firm Reata Pharmaceuticals Inc. and Illinois-based Abbott Laboratories will create up to 100 new jobs and could eventually position the region as a biopharmaceutical hub, Reata's chief executive said this week.

Warren Huff, CEO of Irving-based Reata, said the company has doubled to 100 employees since January, and plans to add 50 to 100 more over the next 12 to 18 months to complete development and prepare for the launch of bardoxolone, the firm's drug for chronic kidney disease.

Reata recently added more than 20,000 square feet at its Gateway Drive headquarters in Irving to prepare for the growth, taking its total space to about 40,000 square feet, Huff said.

Reata announced Sept. 23 that the firm reached an agreement with Abbott Park, Ill.-based Abbott Laboratories that includes a $450 million cash payment to Reata plus $350 million in milestone payments as drug development progresses. Abbott took a minority stake of an undisclosed size in Reata as part of the deal. The agreement gives Abbott exclusive rights to market bardoxolone outside the United States, excluding certain Asian markets.

The partnership allows Reata to reach its goal of establishing a commercial presence in the United States and build a fully integrated pharmaceutical company, Huff said.

"The whole transaction has been part of our plan to complete the development of bardoxolone, retain substantial U.S. rights and be able to make the transition to a fully commercial enterprise," Huff said. "Many companies would license the product off, hand over the development to a large pharmaceutical company, or attempt to sell the company, but that wasn't our strategy."

Instead, Reata retained primary development responsibility. Clinical trials will be conducted at 100 to 200 sites in the United States and Europe, and will be managed from the firm's Las Colinas headquarters, Huff said.

Reata will add clinical trial operations and management positions for what Huff hopes will be the final round of testing before U.S. Food and Drug Administration approval, he said. The firm will add research, development, manufacturing, chemistry, administrative, accounting, product marketing and field sales positions to scale up for the commercial launch of bardoxolone in 2012 or 2013, Huff said.

The agreement builds on Abbott's experience in renal care by adding a promising drug to its pipeline, said John Leonard, senior vice president of pharmaceuticals research and development at Abbott. Clinical studies suggest that bardoxolone, which improves the filtration rate of the kidneys, could prevent patients with chronic kidney disease from progressing to the later stages of the disease and dialysis, he said.

The Abbott deal and Reata's growth could have significant effects for the North Texas business community, Huff said.

"If we're successful and achieve our goal of having a major biopharmaceutical company here, it can be a catalyst for the formation of other companies," he said.

Chronic kidney disease affects more than 50 million adults worldwide, with the number of patients growing rapidly. That makes Reata's drug a major development - not just for the region, but for the world, said Dr. Hubert Zajicek, senior director of the North Texas Enterprise Center for Technology. NTEC, based in Frisco, supports the commercialization of new local discoveries, with a focus on medical technology.

"Reata has been a tremendous story for our market," Zajicek said. "The infusion (from Abbott) is an incredible sign of confidence in their bardoxolone drug."

Zajicek said Reata's success, coupled with the research success of UT Southwestern Medical Center in Dallas, could push North Texas toward becoming a biopharmaceutical hub. He said he's encouraged that Abbott plans to keep its headquarters in North Texas and add jobs in the