In an all-cash deal expected to close in the second half of this year, Swiss drugs giant Novartis has agreed to pay $8.7 billion for AveXis, a US-based clinical stage gene therapy company.

Novartis’ new CEO, Vas Narasimhan, said the $218-per-share offer presents an “extraordinary opportunity” to transform the care of SMA, an inherited neurodegenerative disease caused by a defect in a single gene, the survival motor neuron SMNI.

AveXis has several ongoing clinical studies for treatment of the disease. With the deal, Novartis would gain another gene therapy platform to complement its CAR-T program for cancer and would be able to advance a growing pipeline of gene therapies across therapeutic areas, Narasimhan said.

Analysts said the drugmaker would be paying a hefty premium to establish itself as a frontrunner in the emerging gene therapy sector. The takeover bid, approved unanimously by both companies’ boards, represents an 88% premium over AveXis’ closing price on Apr 7. That price was more than 65% higher than a year earlier.

Biotech markets are excited by the prospects for Novartis’ new gene therapy platform. The general consensus is that through its new management’s willingness the company could  emerge as a leader in both CAR-T and AAV9 gene therapies, two of the most promising fields in biotech.

At the same time, while at the same time some commentators cautioned warning that with a failure of the acquired company’s lead product, the reach for AvveXis could “blow up in its face.”

The US Food and Drug Administration (FDA) has granted orphan drug status to the biotech company’s lead candidate, AVSX-101, which Novartis said has “highly compelling clinical data” in treating SMA Type 1, the leading genetic cause of death in infants.

A BLA filing with the FDA is expected for the second half of 2018, and a launch on the US market is targeted for 2019. Novartis said PRIME and Sakigake designations have been secured in Europe and Japan respectively.

According to the trade journal Fierce Biotech, SMA patients in future will have two treatment options. Biogen’s Spinraza is already on the US market; however, the journal said data on AVX-101, in addition to the benefits of a one-time gene therapy over ongoing dosing, suggest that AveXis’ product may be preferable for some people.

Other products in the AveXis pipeline include a treatment for Reitt Syndrome and a genetic form of amyotrophic lateral sclerosis (ALS, also known as Lou Gehrig’s disease) caused by mutations in the superoxide dismutase gene.

Novartis estimates that AveXis’ portfolio has the potential to generate peak annual sales worth billions of dollars annually.