Pfizer Inc
The Pfizer logo is seen at their world headquarters in Manhattan, New York (Photo: Reuters / Andrew Kelly)

In the latest move to become the leading provider of oncology drugs, Pfizer announced this week that it is planning to purchase the Colorado-based pharmaceutical company Array Biopharma. Pfizer has reportedly agreed to pay $10.64 billion for the publicly traded company.

Pfizer is betting big on the deal, which it hopes will make it the leading provider of colon cancer treatments. The price that Pfizer will be paying is more than 62 percent more than what the company is worth as of last week's trading. The company will be paying $48 per share in the deal. Following the company's announcement, Pfizer stock prices jumped by as much as 0.3 percent.

The United States' largest drug manufacturer is reportedly after a number of Array's successful treatments, including its Braftovi and Mektovi drug combination for melanoma.

According to Pfizer, the company started to proactively consider acquiring Array last month, shortly after the firm released is clinical data for its Braftovi and Mektovi drug combination. The clinical data apparently showed a high success rate, which showed that the drugs had reduced the risk of death from colorectal cancer by as much as 48 percent.

The drug combination was used in conjunction with a drug called Erbitux, which is produced by Eli Lilly and Co. The results provided a significantly better outcome when compared to standard treatments for the particular gene mutation. Array's drug combination is also much more effective than even Merck and Co's blockbuster drug Keytruda.

Pfizer's research head Mikael Dolsten mentioned in an interview that the company considered Array's successful trails a "landmark" for the treatment of the particular disease.

The company believes that the acquisition of Array should provide them with numerous opportunities to combine treatments and perhaps even create an entire platform dedicated to treating colorectal cancer.

Array originally launched the drug combination in the middle of last year. Braftovi and Mektovi treatments were sold at a hefty $22,000 per month, netting the company around $72 million in sales in the first nine months. Oncology and the treatment of various cancers have become a very profitable business for pharmaceutical companies following major breakthroughs in the field.

The acquisition is expected to be completed sometime during the second half of this year. Pfizer expects to start earning from the transaction sometime in 2022. The acquisition is Pfizer's first major purchase since Albert Bourla took over as the company's new chief executive officer. It is also the biggest deal the company has made since it bought Medivation for $14 billion in 2016.