New York (CNN Business) Pfizer agreed to spend $11 billion to buy Array BioPharma, a company that is developing small molecule medicines primarily to treat cancer.

Array's portfolio includes two drugs in more than 30 clinical trials for different kinds of cancer, particularly colorectal cancer. The companies said that is the third-most-common form of cancer:140,250 patients were diagnosed with cancer of the colon or rectum in the United States in 2018, and approximately 50,000 are estimated to die of their disease each year.

The proposed acquisition of Array "sets the stage to create a potentially industry-leading franchise for colorectal cancer alongside Pfizer's existing expertise in breast and prostate cancers," said Pfizer CEO Albert Bourla.

Johnson & Johnson JNJ Array is essentially a start-up, with revenue of $174 million in its most recent fiscal year and a history of net losses. It is dwarfed in size by Pfizer which had revenue of $53.6 billion in 2018, making in the second-largest US pharmaceutical company behind only. Pfizer said it will use debt and cash reserves to make the purchase.

Array ARRY Pfizer PFE The purchase price of $48 a share represents a 62% premium over Array's closing price on Friday. Shares ofsoared 60% in premarket trading on the purchase announcement, while shares ofwere little changed.