Merck Co is in advanced talks to buy cancer-focused biotech company Seagen Inc.
The deal could be worth around $40 billion or more, according to the Wall Street Journal.
A deal would help Merck add to its cancer drug portfolio.
The Keytruda immunotherapy drug was Merck's top-selling product with $17.2 billion in sales last year.
Seagen's products include Adcetris, which had $1.4 billion in sales last year.
The companies are talking about a price above $200 a share for Seagen.
Seagen shares closed at $175 on Wednesday. The shares of Merck were $93.
The Journal says there is no guarantee that the two sides will reach a deal.
Antitrust officials are expected to look at any proposed deal.
6.6% of the population is a minority, according to a report by the World Trade Organization.
Merck and Seagen are trying to seal a deal on or before the announcement of Merck's second fiscal-quarter earnings set for July 28, according to the Journal.
Seagen didn't say anything about the report.
Merck did not respond to a request for comment.