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(Bloomberg) -- Roche Holding AG agreed to acquire U.S. biotech Ignyta Inc. for $1.7 billion, following Bayer AG in buying into a class of experimental cancer drugs that home in on a specific mutation across many types of tumors.

Ignyta investors will get $27 a share in cash, the companies said in a statement Friday. That’s 74 percent higher than Thursday’s closing price. Both companies’ boards agreed to the deal.

Roche’s purchase comes about five weeks after Bayer signed a $1.55 billion licensing deal for Loxo Oncology Inc.’s larotrectinib, an experimental medicine similar to Ignyta’s entrectinib. Roche has said it will focus on small deals like Ignyta to build out its portfolio. The Swiss company, the world’s biggest maker of cancer drugs, is facing a critical transition as its three top-selling medicines lose patent protection.

San Diego-based Ignyta’s entrectinib is being tested in patient trials that, if successful, could be the basis for applications with regulators to sell the drug. Roche said it aims to complete the purchase in the first half of 2018.

Citigroup Inc. advised Roche on the deal, while Sidley Austin LLP provided legal advice. Ignyta used bankers from BofA Merrill Lynch and J.P. Morgan Securities LLC with Latham & Watkins LLP as legal counsel.

Roche shares fell 0.1 percent to 246.50 Swiss francs at 9:10 a.m. in Zurich, valuing the company at 213 billion francs ($215 billion).

Ignyta was founded in 2011 by University of California, San Diego researcher Gary Firestein and Jonathan Lim, the former chief executive officer of Halozyme Therapeutics Inc.

(Updates with Roche stock price in sixth paragraph.)

To contact the reporters on this story: Thomas Mulier in Geneva at tmulier@bloomberg.net, Naomi Kresge in Berlin at nkresge@bloomberg.net.

To contact the editors responsible for this story: Eric Pfanner at epfanner1@bloomberg.net, Phil Serafino

©2017 Bloomberg L.P.

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