Israel-based Teva, the world's leading generic drugmaker, has entered a deal to buy U.S. neurology drug company Auspex Pharmaceuticals for an equity value of $3.5 billion.

In the first major deal for new chief executive Erez Vigodman, Teva will offer $101 per share in cash for Auspex, in an effort to boost its portfolio of treatments for the central nervous system.

Auspex's main product, SD-809, is being developed for the treatment of chorea, abnormal involuntary movement associated with Huntington's disease, tardive dyskinesia and Tourette syndrome.

According to the Motley Fool's George Budwell, this buyout "marks Teva's first real steps toward diversifying its revenue base away from the multiple sclerosis, or MS, drug Copaxone ahead of the entry of generic rivals later this year. This is a vitally important move by Teva, given that Copaxone presently makes up over half of the company's specialty drug sales."

Read the Reuters press release