Spending nearly $9 billion on a drug company that doesn’t yet generate revenue isn’t as risky as it seems. Novartis announced it plans to do just that on Monday. The Swiss pharma giant has agreed to buy U.S. gene therapy specialist AveXis for $8.7 billion in cash, or an 88% premium to Friday’s closing stock price. The purchase price, along with the fact that AveXis won’t contribute to earnings until 2020, if everything goes right, is bound to cause grumbling that Novartis overpaid.

Source: Wall Street Journal April 09, 2018 14:35 UTC