Swiss pharmaceuticals producer Roche announced on Friday it had entered into an agreement to acquire Ignyta - a deal that would value the US biotech at $1.7bn.
Under the terms, Roche will pay $27 per share in an all cash transaction that represents a premium of 74% to Ignyta's closing price on Thursday, 21 December. The merger has been fully approved by the boards of both companies.
Roche must promptly commence a tender offer to acquire all outstanding shares of Ignyata common stock.
The Swiss drugs giant has been seeking to expand its cancer treatments portfolio, and Ignyta's investigational medicine entrectinib appears to be the target of the purchase despite only yet being at the phase 2 clinical trial stage.
With many of its most popular treatments reaching the end of their patent protection lifecycle, Roche is pushing forward with acquisition plans to rebuild its portfolio of treatments.
Chief executive comment
Commenting on the transaction, Roche chief executive Daniel O'Day (left) said: "Cancer is a highly complex disease and many patients suffer from mutations which are difficult to detect and treat.
"The agreement with Ignyta builds on Roche’s strategy of fitting treatments to patients and will allow Roche to broaden and strengthen its oncology portfolio globally.”
Ignyta is to continue its operations in San Diego, California.