The race among international pharmaceutical producers to beef up their oncology portfolio is heating up. In one of the latest deals, US Merck has signed a definitive agreement to take over Burlington, Massachusetts-based cancer drug developer ArQule through an acquisition subsidiary, for $2.7 billion.

If successful, the $20 per share all-cash transaction – a 107% premium to the last closing price – would hand Merck what experts see as a promising early-stage compound with the potential challenge a blockbuster leukemia drug made by rival AbbVie.

ArQule’s leading investigational candidate ARQ 531 is a small molecule oral Bruton’s tyrosine kinase (BTK) inhibitor currently in a Phase 2 dose expansion study for the treatment of B-cell malignancies (leukemia).

BTK inhibitors play a key role in the expansion of chronic lymphocytic leukemia (CLL), the most common form of the disease and are prescribed for patients who have not responded to other treatments or whose cancers are resistant to similar drugs, such as AbbVie’s ibritinib (Imbruvica).

The once-daily ibritinib, which the Lake Bluff, Illinois drugmaker picked up with its 2018 acquisition of California-based Pharamcyclics for $21 billion, is also a BTK inhibitor. The drug generated nearly $3.6 billion in global revenue for AbbVie in 2018.

In early clinical trials, ARQ 531 was shown to demonstrate a manageable safety profile and early signs of anti-tumor activity for the treatment of patients with relapsed or refractory chronic lymphocytic leukemia (CLL) and Richter’s Transformation.

Merck expects to finalize the transaction early in the first quarter of 2020, subject to customary conditions and the expiration of the waiting period under the US Hart-Scott-Rodino Antitrust Improvements Act. On successful completion of the tender offer, its acquisition subsidiary is planned to be merged into ArQule.

Commenting on the Merck plans and the plethora of other pharma sector deals in recent months, including French drugmaker Sanofi’s plans to acquire US biotech Synthorx, also announced this week, US financial newspaper Wall Street Journal (WSJ) pointed to the willingness of the US Food and Drug Administration (FDA) to approve new cancer drugs with smaller, faster and less expensive clinical trials.

What’s more, WSJ said, “the companies have found that health plans will pay for cancer drugs, even at prices above $100,000 for a year’s treatment.”

According to market-research firm, EvaluatePharma, the $123 billion global cancer-drugs market is expected to almost double by 2024