Executives from Merck & Co. (NYSE:MRK) and Seagen (Nasdaq:SGEN) are reportedly considering a $40 billion acquisition deal.

Readington, New Jersey–based Merck has offered to spend about $200 per share for Seagen, according to The Wall Street Journal.

Executives from the company aim to finalize the deal before Merck announces its Q2 earnings on July 28, according to WSJ.

Seagen shares were up about 2%, trading at $178.56 in afternoon trading.

Merck shares held steady, hovering around $92.90.

In a Q1 earnings call, Merck CEO Robert M. Davis said the company is working to diversify its business as it plans to lose exclusivity for its megablockbuster immunotherapy drug Keytruda. “In oncology, we remain committed to building on the foundational position that we have achieved with Keytruda, and we aim to expand our presence in this key therapeutic area and to establish an enduring leadership position,” Davis said.

The patent protections for Keytruda are slated to expire in 2028.

A merger of the two companies is likely to incur heightened scrutiny from the federal government, which has signaled its intent to ramp up its enforcement of antitrust protections.

Seagen is currently marketing four oncology drugs and has a portfolio of 16 drug candidates.

Seagen shares have recovered since the company’s former CEO Clay Siegall resigned in May.