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NEW YORK (TheStreet) -- Teva (TEVA) - Get Teva Pharmaceutical Industries Ltd. Reportis acquiringAuspex Pharmaceuticals (ASPX) for $3.5 billion to expand its core business treating patients with diseases of the central nervous system.

The deal values Auspex at $101 per share, a 42% premium to the Friday close of $70.91. 

Teva suggested last month that it would start to acquire smaller companies as a way to offset the expected revenue hit coming when its multiple sclerosis drug Copaxone faces generic competition in September. Copaxone is Teva's largest and most important drug, so the Auspex acquisition may be the first of many for Teva, if the company follows through with its plan. 

Auspex uses chemistry to develop new, patent-protected versions of older drugs. The company's pipeline focuses on movement disorders like Huntington's disease, tardive dyskinesia and Tourette's syndrome. Auspex's lead drug, SD-809. aims to treat chorea associated with Huntington's and will be filed for approval in the middle of the year. 

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Teva expects the Auspex acquisition to be accretive to adjusted earnings in 2017, assuming SD-809 is approved and launched in 2016. 

Teva shares closed Friday at $61.98. In premarket trading Monday, Teva shares were down 1.3%, while Auspex shares were up 41.5%.

Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.