French healthcare company Ipsen agreed to buy Clementia Pharmaceuticals Inc. (CMTA) - Get Report in a deal worth up to $1.31 billion.

Ipsen said it would pay $25 a share in cash initially for Clementia, plus a contingent value right of $6 a share upon Food and Drug Administration approval of Clementia's palovarotene drug for the treatment of multiple osteochondromas, a rare bone disorder.

The companies said the initial cash consideration represents a premium of 77% to Clementia's 30-day volume-weighted average stock price.

Clementia shares rose 73.7% to $25.95 on Monday.

"The acquisition of Clementia Pharmaceuticals accelerates the ongoing transformation of Ipsen as we are successfully executing on our external innovation strategy to identify and acquire innovative medicines to serve patients with unmet medical needs. Through this transaction, we will gain scientific expertise, exceptional talent, and a cornerstone ultra-rare disease drug candidate with rare pediatric disease and breakthrough therapy designations, potential U.S. approval in 2020 and additional indications to follow," said David Meek, CEO of Ipsen, in a statement.

The deal is expected to close in the second quarter.