The $24-per-share offer - around $8.50 above Endocyte's closing share price yesterday - has the backing of the biotech's board, but still needs the approval of its shareholders.
Novartis has signed a deal to acquire USA biopharma Endocyte, securing itself access to novel radiopharmaceutical programmes "with significant sales potential".
The transaction is subject to customary closing conditions, including the approval of Endocyte's stockholders and receipt of regulatory approvals.
Endocyte develops targeted cancer therapies and earlier this month became the first Purdue University startup to reach a value of $1.5 billion.
Until the deal is finalised, Endocyte will continue to operate as a separate and independent company.
The company has a radioligand therapy, Lu-PSMA-617, in Phase III development for metastatic castration-resistant prostate cancer.
"Today's announcement about the proposed acquisition of Endocyte builds on our growing capability in radiopharmaceuticals, which is expected to be an increasingly important treatment option for patients and a key growth driver for our business", said Liz Barrett, CEO of Novartis Oncology.
As part of the restructuring, Endocyte said it was ending patient enrollment in a Phase I trial of its folate receptor-targeted tubulysin solid tumor cancer candidate EC1456 (NCT01999738), but continuing enrolling a "small number" of patients in a Phase I ovarian cancer surgical study of EC1456 (NCT03011320). Endocyte stock, which has rallied more than 445% since the beginning of the year, was up $7.89, or 50.71% to $23.45. Radiopharmaceuticals such as 177Lu-PSMA-617 are innovative medicinal formulations containing radioisotopes that are used clinically for both diagnosis and therapy. If it is approved, it would close during the first half of next year.
The acquisition of Endocyte is planned to be funded through available cash.