NEW YORK (TheStreet) -- Shares of Avanir Pharmaceuticals (AVNR) are up 12.60% to $16.89 in pre-market trade after it was reported that Otsuka Holdings Co. agreed to buy the California-based company for about $3.54 billion, a deal that gives the Japanese company new treatments for neurological conditions, Bloomberg reports.
Tokyo-based Otsuka will pay $17 a share, it said in a stock exchange statement today. That's 13% higher than Avanir's closing price yesterday of $15.
The deal will give the Japanese drugmaker access to Avanir's pipeline of treatments for Alzheimer's, Parkinson's and migraines. Otsuka has been looking for new sources of growth before 2015, when it faces patent expiration on Abilify, one of the world's best-selling treatments for schizophrenia, Bloomberg said.
Must Read: Warren Buffett's 25 Favorite Stocks
TheStreet Ratings team rates AVANIR PHARMACEUTICALS INC as a Sell with a ratings score of D-. TheStreet Ratings Team has this to say about their recommendation:
"We rate AVANIR PHARMACEUTICALS INC (AVNR) a SELL. This is driven by some concerns, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income and weak operating cash flow."