When Pfizer (PFE 0.66%) opened up its checkbook this week to buy Array Biopharma (ARRY), it was bidding for a small cancer portfolio that has big potential. But Braftovi and Mektovi, the two metastatic melanoma drugs Array has on the market, are a long way from justifying the offer's steep premium.

In this segment from MarketFoolery, host Chris Hill and senior analyst Ron Gross weigh the deal, discuss why it will take several years to be accretive, and consider the difficulty of putting an accurate value on a clinical-stage biotech company.

To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. A full transcript follows the video.

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This video was recorded on June 17, 2019.

Chris Hill: We're going to start with the deal of the day and that is Pfizer, buying Array BioPharma in a deal worth nearly $11.5 billion. Array BioPharma -- if you're a shareholder, congrats! That stock's up close to 60% on this buyout. They do a bunch of things. I'm assuming that Pfizer bought Array for the cancer treatment portfolio.

Ron Gross: Absolutely! It's continuing a trend. We've seen it lately with Merck, Eli Lilly, Bristol-Myers, several acquisitions in the cancer space. Array specifically has two drugs in their pipeline that focus on metastatic -- easy for me to say -- melanoma. I think that is the primary reason that Pfizer got interested here. Obviously, an $11 billion price tag, as you said, a 62% premium. Pretty steep price to pay. But cancer is really where a lot of these bigger companies are going, moving away from the heart medicines and some of the other things from the past, and focusing on cancer. And I've also seen a lot of acquisitions in the gene-editing space, gene therapy as well, looking toward what the future of medicine will be.

It's a big deal. It won't add to earnings anytime soon. I think we're looking at 2022. Typically, when you see an acquisition of, let's call it a normal company, a non-biotech company, you love to see the company say it will be accretive, additive, to earnings immediately, sometimes not immediately, maybe a year. In this case, it's biotech. They're not profitable, they won't be profitable for a while. This is not going to add to anything for a while. But obviously, Pfizer thinks it's worth the price.

Hill: Don't you think that Pfizer went big with the offer? There's a little bit of debt that they're assuming as part of this $11.5 billion, but Array was not a tiny company. They were probably to the tune of a $5 [billion]-$6 billion market cap before this buyout. So, I'm assuming that even though they're not profitable, Pfizer saw enough good things that they thought, "Let's make this quick! Let's go in!" And as you said, maybe there's a little bit of keeping up with the Joneses here with the other deals you mentioned with Merck and company.

Gross: Now, it's very difficult to properly value biotech companies, especially when they're in the clinical trial phase, or have maybe one or two drugs in the marketplace. It's hard to know what the right number is. But they came to the hoop. They wanted to get this done. I don't think they were nickel and diming. They paid what appears to be a very fair price to, as you say, just make this happen and move forward as a combined company.