Eli Lilly said today it would buy Loxo Oncology for about $8 billion in cash, buying into a portfolio of targeted medicines to treat cancers caused by rare gene mutations. 

The deal marks Lilly's biggest push in the fast-growing cancer therapy market and adds to an explosive start to the year for healthcare M&A. 

Bristol-Myers Squibb agreed to buy Celgene for about $74 billion last week, combining two of the world's largest cancer drug businesses. 

The deal also raised hopes of a wave of consolidation in the sector. 

Loxo's portfolio is centered around its first commercial medicine, Vitrakvi, which was shown to be effective against a wide variety of cancers caused by a single, rare genetic mutation. 

The drug is sold in partnership with Bayer. 

Loxo is also developing a drug that targets a rare gene fusion mutation known as RET, seen in thyroid, lung and other cancers. 

Lilly's oncology portfolio includes lung cancer drug Alimta, Erbitux, a treatment for certain types of colorectal cancers, and gastric cancer medicine Cyramza. 

In May, Lilly said it would buy Armo Biosciences Inc for $1.6 billion to expand its portfolio of drugs that helps the body's immune system fight cancer. 

Lilly's chief financial officer Joshua Smiley told Reuters in November the company was looking to make similar acquisitions using $4 billion the company amassed as part of its divestiture of animal health unit Elanco. 

Lilly's offer of $235 per share in cash represents a premium of about 68% to Loxo's Friday close. 

Loxo's shares have run up nearly 65% over the past 12 months, while Lilly's stock has surged 34% in the same time.