Tesaro shares surged 58 percent Monday after GlaxoSmithKline agreed to buy the cancer treatment company for $75 per share, or about $5.1 billion.
The deal represents a more than 60 percent premium over Tesaro's closing price on Friday of $46.38 per share. GlaxoSmithKline's stock was 8.2 percent lower Monday.
"The acquisition of Tesaro will strengthen our pharmaceuticals business by accelerating the build of our oncology pipeline and commercial footprint, along with providing access to new scientific capabilities," GlaxoSmithKline CEO Emma Walmsley said in a statement.
Bloomberg reported last month that Tesaro was exploring the opportunity of a sale. Tesaro's shares have suffered losses after it shared disappointing results on Nov. 9 for treatment of small-cell lung cancer.
The deal announced Monday was unanimously approved by Tesaro's board. GlaxoSmithKline expects the deal to close in the first quarter of 2019.