Shares in YM BioSciences Inc. surged more than 70 per cent after California-based Gilead Sciences Inc. announced an agreement to buy the Canadian company for about $510-million (U.S.).
Shares rose $1.17 to $2.83 on the Toronto Stock Exchange in Wednesday afternoon trading for the Mississauga-based drug development company.
The definitive agreement signed by the companies will see Gilead acquire YM for $2.95 per share in cash.
YM chief executive officer Nick Glover said Gilead Sciences has the research and development capabilities to more fully realize the potential of its lead drug, CYT387.
"This agreement represents a positive outcome both for myelofibrosis patients and for our shareholders," Mr. Glover said in a news release.
The drug is used for myelofibrosis, a progressive, chronic bone marrow disorder.
"Gilead has the research and development capabilities and the resources needed to more fully realize the potential of CYT387 as a therapeutic advance for myelofibrosis patients and potentially for other indications."
The transaction is expected to close in the first quarter of 2013.