Shares of ZymoGenetics (NASDAQ:ZGEN) surged more than 84%, hitting a 52-week high Wednesday, on news that it will be acquired by Bristol-Myers Squibb (NYSE:BMY) for $885 million.

Under the proposed transaction, which has been approved by both boards of directors, ZymoGenetics’ shareholders will receive $9.75 in cash for each share of common stock.

As a result of the deal, Bristol-Myers will receive full ownership of pegylated-interferon lambda, a novel interferon development for the treatment of Hepatitis C infection. The two companies have collaborated on the drug’s development since January 2009.

“Building on our leadership in virology, we are developing a strong portfolio to help patients with Hepatitis C,” Bristol-Myers CEO Lamberto Andreotti said.

It will also gain US Food and Drug Administration approved Recothrom, used as a topical hemostat to control non-arterial bleeding during surgical procedures, as well as other treatments still in clinical development.

“ZymoGenetics is a leader in advancing novel biologics, particularly genomics-based therapies,” said Elliott Sigal, M.D., Ph.D, chief scientific officer of Bristol-Myers Squibb. “We expect ZymoGenetics’ pipeline and biologics capabilities to complement and enhance our existing efforts in Hepatitis C, oncology and immunoscience.”

The deal is expected to close approximately 30 days after commencement of the tender offer, anticipated to occur in the next few days.

Shortly after the deal was unveiled, several law firms launched an investigation on ZymoGenetics’ board of directors for possible breaches of fiduciary duty and other violations of state law in relation to the deal.

The investigation seeks to determine whether the biopharmaceutical company’s board of directors breached their fiduciary duties to their stockholders by failing to adequately shop the company before entering into the Bristol-Myers transaction.

It will also determine whether Bristol-Myers is underpaying ZymoGenetics for the shares.