Swiss pharmaceutical giant Novartis has agreed to buy British firm NeuTec Pharma , a specialist in fighting hospital superbugs, for $569 million.
The NeuTec board of directors has recommended the takeover and shareholders with 39 percent of the firm support the deal.
NeuTec shares had surged more than 80 per cent yesterday after the company said it was in takeover discussions and a person familiar with the situation said that the approach had come from a large pharmaceutical group.
"We believe this is a good and full offer after having completed due diligence," said Novartis spokesman John Gilardi.
The Novartis bid represents a premium of 109 per cent to the share price before yesterday's news and the deal highlights the type of price big pharmaceutical companies are prepared to pay for biotechnology assets.
In May AstraZeneca agreed to pay a 67 per cent premium to acquire Cambridge Antibody Technology in a $1.3-billion deal and last year Pfizer paid $1.9 billion - an 84 per cent premium - for anti-infectives firm Vicuron Pharmaceuticals.
NeuTec, which was founded in 1997 and has yet to make a profit, specialises in developing medicines against hospital-acquired infections, using antibody fragments.
It is a relative rarity among biotechnology companies in having a number of late-stage development experimental drugs that have not yet been partnered with a large drugmaker.
The bid for NeuTec is part of a two-year-old drive by Novartis to strengthen its portfolio of treatments for infectious diseases, focusing on hepatitis and serious infections.