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Glaxo plans to pay $75 per share for Tesaro, which makes the ovarian cancer treatment Zejula. That represents a premium of more than 60 percent to the stock's $46.38 closing price Friday. The total deal price includes Tesaro's net debt.
Glaxo CEO Emma Walmsley said in a statement that the deal will accelerate growth of the British drugmaker's oncology business.
Zejula brought in $166 million in revenue in the first nine months of this year, with third-quarter sales growing more than 60 percent.
Glaxo expects the deal to close in the first quarter.
Shares of Waltham, Massachusetts-based Tesaro Inc. jumped nearly 60 percent to $73.97 in premarket trading.