GlaxoSmithKline is to buy Human Genome Sciences for about $US3 billion.
The deal follows weekend talks in which Britain's largest pharmaceutical company agreed to raise its bid for the US biotechnology company to $US14.25 per share from $US13.
The bid is almost twice the closing price of HGS shares in April.
The purchase gives GSK rights to several recently-launched medicines. GSK will gain control of Benlysta, which treats the immune system disorder lupus, as well as experimental medicines for diabetes and heart disease.
The BBC reports biotech companies are looking to acquire a new pipeline of drugs to replace older medicines that are expiring.
Bristol-Myers Squibb recently bought diabetes specialist Amylin Pharmaceuticals by sharing the $US7 billion cost of the deal with AstraZeneca.