Eli Lilly said on Monday it would buy Loxo Oncology for about $8 billion in cash.
The offer comes out to $235 per share in cash, which is a premium of about 68 percent to Loxo's Friday closing price.
In November, a Loxo drug found to be effective against a wide variety of cancers driven by a single, rare genetic mutation won U.S. approval.
It is the latest deal in the pharmaceutical space.
U.S. cancer drug giant Bristol-Myers Squibb announced last week that it was buying biotech company Celgene, which develops treatments for cancer and inflammatory diseases, in a deal with an enterprise value of $74 billion.