What happened

Shares of Constellation Pharmaceuticals (CNST) had skyrocketed 66.7% as of 12:01 p.m. EDT on Wednesday. The huge gain came after MorphoSys (MOR -1.52%) announced that it will acquire Constellation for $1.7 billion. 

So what

MorphoSys was attracted to Constellation for its two lead pipeline candidates, pelabresib and CPI-0209. Constellation is currently evaluating pelabresib in late-stage clinical studies targeting myelofibrosis. It's testing CPI-0209 in phase 2 clinical studies for treating blood cancer and solid tumors.

Two jigsaw puzzle pieces held close to each other with the sun shining in the background.

Image source: Getty Images.

"Both pelabresib and CPI-0209 have broad potential, and we look forward to unlocking their full benefits for cancer patients," said MorphoSys CEO Jean-Paul Kress. He referred to the deal as a "transformational acquisition" for MorphoSys as it increases its focus on hematology-oncology.

Two products are already on the market that use MorphoSys' antibody technology. Johnson & Johnson won U.S. approval for Tremfya in 2017 for treating plaque psoriasis. Last year, MorphoSys won accelerated approval for Monjuvi in combination with Revlimid for treating diffuse large B-cell lymphoma.

Now what

Constellation's share price is nearly at the $34 offered by MorphoSys, so the small biotech stock won't move much higher. The acquisition is expected to close in the third quarter of this year.