Jazz Pharmaceuticals' (JAZZ) recent acquisition of Actio Biosciences' KCNT1 epilepsy asset "makes sense" with a reasonable price tag and good synergy with its existing business, RBC Capital Markets said in a Monday note.

According to the note, the deal focuses on a high unmet need in treating rare epilepsy, with the ABS-1230 drug phase 1/2 clinical trials evaluating efficacy in patients with KCNT-1-related mutation. Due to the severity of the particular disease, a launch will likely result in a rapid penetration of the market, with potential for $500 million revenue by 2035, RBC analysts said. They added that the regulatory approval process should be manageable.

Due to the deal's synergies with Jazz's existing assets, the analysts forecast no need for additional overhead costs and only a modest increase of about $30 million in research and development expenses to run ongoing trials.

Even with the transaction, Jazz continues to have strategic flexibility for further moves, on top of its resilient oxybate business and the growth of its Ziihera product, according to the note.

RBC has an outperform rating on the stock, with a price target of $273.

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