By Dave Sebastian and Colin Kellaher

Merck & Co. said it is buying ArQule Inc. for about $2.7 billion, adding to its portfolio of cancer treatments beyond the company's top-selling immunotherapy drug Keytruda.

The purchase price, at $20 a share in cash, is more than double Friday's closing price of $9.66 for ArQule, a Burlington, Mass., biopharmaceutical company. Shares of ArQule were up 103% in morning trading Monday. Merck shares, which are up about 16% this year, declined 0.4%.

Merck said the deal would expand its oncology offerings into therapies that treat hematological malignancies. ArQule's experimental treatment ARQ 531 is in a Phase 2 dose-expansion study for the treatment of B-cell tumors such as chronic lymphocytic lymphoma.

The deal is expected to close in the first quarter of 2020.

Merck finance chief, Robert Davis, told The Wall Street Journal in October that the company's deal-making strategy remains focused on smaller, "bolt-on" acquisitions and not larger, transformative transactions.

The Kenilworth, N.J., drugmaker has been adding to its pipeline of drugs by buying cancer drugmakers with promising therapies and technologies such as Peloton Therapeutics Inc. and Tilos Therapeutics Inc.

The company booked more than $3 billion in Keytruda sales for the fiscal third quarter, a 62% year-over-year increase and about a quarter of the company's total revenue. Keytruda, which unleashes a patient's own immune system to fight tumors, was once an afterthought buried in Merck's research-and-development pipeline but has in the past few years become a commercial force for the company.

Write to Dave Sebastian at dave.sebastian@wsj.com and Colin Kellaher at colin.kellaher@wsj.com

(END) Dow Jones Newswires

December 09, 2019 10:58 ET (15:58 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.
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