Israel-based Teva Pharmaceutical Industries has signed an agreement to acquire US late-clinical stage biopharmaceutical firm Auspex Pharmaceuticals, for around $3.5bn in equity value.

Under the deal, Teva will acquire all of the outstanding shares of Auspex at $101.00 per share in cash, which develops new medicines for hyperkinetic movement disorders and other rare diseases.

The acquired business will expand Teva’s position in central nervous system (CNS) segment, in addition to enhancing mid to long-term revenue and earnings growth profile.

"The acquired business will expand Teva’s position in central nervous system segment."

Teva Pharmaceutical Industries president and CEO Erez Vigodman said: "We look forward to accelerating the development and commercialisation of the Auspex portfolio based on our infrastructure, capabilities and strong commercial and R&D position in CNS.

"As we have outlined recently, one of our key priorities for 2015 is to support Teva’s mid to long-term growth and create value for our shareholders with business development opportunities that are closely aligned with our core therapeutic areas."

Auspex is speclialised in applying deuterium chemistry to known molecules to create new therapies with improved safety and efficacy profiles. Its lead product SD-809 (deutetrabenazine) is being developed to treat chorea associated with Huntington’s disease, tardive dyskinesia and Tourette’s syndrome.

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The company reported positive results from its Phase III clinical trial for SD-809 in Huntington’s disease in 2014 and intends to submit a new drug application (NDA) for this indication in the middle of the year.

Auspex received orphan drug designation from the US Food and Drug Administration (FDA) for SD-809 to treat Huntington’s disease and is planning for commercial launch in the US by the end of this year.

Subject to customary and other closing conditions, the deal is expected to be completed in the middle of this year.