Should You Buy Jazz Pharmaceuticals Stock After Its Actio Acquisition?
Actio could make Jazz's growing epilepsy franchise even stronger.
Overview
Jazz Pharmaceuticals (NASDAQ: JAZZ) just spent $820 million to acquire Actio Biosciences, giving the company control of a potential first-in-class treatment for a devastating form of childhood epilepsy. The deal closed on Sept. 15.
That $820 million was paid up front, but Actio shareholders are eligible for another $500 million in approval and sales milestone payments if ABS-1230, its experimental oral drug for KCNT1-related epilepsy, performs as hoped. That's potentially more than $1.3 billion for a drug that isn't approved yet. But Jazz didn't buy a random early-stage biotech. It bought one with a drug candidate that fits directly into one of its strongest existing businesses.
Details
Jazz already has a major presence in the rare epilepsy space through Epidiolex (a medication used to treat severe types of epilepsy), which generated $292 million in sales in Q2, up 16% year over year. ABS-1230 could expand that franchise into an area where there are virtually no treatment options yet.
Source
Originally published at www.fool.com.