Why Foamix Stock Just Dropped 27.5%

Shares of Foamix Pharmaceuticals (NASDAQ: FOMX) stock crashed in early trading Monday after the Israeli dermatological treatment company announced an agreement to acquire the competing, revenue-less pharmaceutical products business Menlo Therapeutics (NASDAQ: MNLO) in an all-stock transaction.

Shares of Foamix are down 27.5% as of 10:40 a.m. EST in response to the news, and Menlo's not looking too healthy itself -- down 8.4%.

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Source Fool.com