What happened?

Shares of Portola Pharmaceuticals (NASDAQ:PTLA) -- a biopharmaceutical company that focuses on the development of treatments for life-threatening blood disorders -- are up by a whopping 129% as of 12:11 p.m. EDT on Tuesday. The company's shares more than doubled following the news that Portola reached an agreement to be acquired by Alexion Pharmaceuticals (NASDAQ:ALXN).

So what

Alexion will launch a tender offer to acquire all the outstanding shares of Portola for $18 per share in cash. Note that Portola closed at about $7.76 per share yesterday, which means the proposed price of this acquisition represents a significant premium over Portola's stock price, at least as of the closing of the market on Monday. This factor explains why investors loaded up on Portola's shares and drove its stock price significantly higher today. After an active morning trading session, Portola's shares are now worth approximately $17.80 apiece.

Five arrows pointing up.

Image Source: Getty Images.

Now what

Alexion is looking to strengthen and diversify its product lineup with this deal. "The acquisition will add near-term diversification to Alexion's commercial portfolio and provides the opportunity to apply the company's demonstrated global commercial excellence to create long-term value for patients and shareholders," management said.

In particular, Alexion will add Andexxa to its lineup, which is a product that reverses the side effects of anticoagulant medications, including uncontrolled bleeding. During the fiscal year 2019, Andexxa generated $111.5 million in net product revenue. Alexion believes Andexxa still has significant untapped potential, and the biotech company will look to expand the number of patients who benefit from this drug "while also driving value for shareholders."