Shares of

Transkaryotic Therapies

(TKTX)

jumped Thursday after Britain's

Shire Pharmaceuticals

(SHPGY)

offered to buy the Cambridge, Mass., biotech company for $1.6 billion.

The proposed purchase, at $37 a share, represents a 44% premium to Transkaryotic Therapies' $25.77 average price over the four weeks prior to Wednesday's closing price. The deal is expected to close during the third quarter, subject to approval by both companies' shareholders and regulatory agencies.

Shares of Transkaryotic Therapies climbed $5.51, or 18.1%, to $35.95. Shire's shares shrank by $3.12, or 9%, to $31.40.

The announcement prompted the immediate resignation of Michael J. Astrue as chief executive and a director of Transkaryotic Therapies. David D. Pendergast, who was chief operating officer, was promoted as CEO and a director.

Transkaryotic Therapies specializes in developing drugs for rare diseases. Shire's lineup includes medications for attention deficit hyperactivity disorder, ulcerative colitis and chronic hepatitis B virus.