Novartis will pay $218 per share for AveXis, a $8.7 billion deal that is a 72 percent premium to the company's 30-day volume-weighted average stock price, according to Reuters.
Novartis CEO Vas Narasimhan, MD, believes AveXis' gene therapy business and spinal muscular atrophy drug AVXS-101 will improve the company's neuroscience focus area.
"We believe the medicine would have a multibillion dollar peak sales potential," Mr. Narasimhan said, according to Reuters. "We've been regularly scanning and looking for bolt-in acquisition candidates."
The acquisition will hurt operating income for Novartis in 2018 and 2019 due to research and development costs, but the company expects it to strongly contribute to profit earnings by 2020.