Bayer is digging deep into its pockets to buy prostate/bone cancer partner Algeta in a proposed deal worth around $2.4 billion.

The German drugmaker has submitted a preliminary proposal to acquire the Oslo, Norway-based group, sending the latter's shares up 31%.

The deal currently on the table is 336 kroner a share, equating to a 27% premium on yesterday's close and a total of around $2.4 billion, which some analysts seem to think is on the high side.

“We do not see the potential in the company justifying such a high takeover price,” DZ Bank AGPeter Spengler wrote in a client note, according to media reports.

The companies signed an agreement in 2009 giving Bayer rights to co develop the cancer drug Xofigo (Radium 223) to treat secondary bone cancer in prostate cancer patients, which was approved on both sides of the Atlantic earlier this year.

If its bid is successful, Bayer would gain total control over the Radium 223 programme, as well as access to Thorium 227, the potential of which is being assessed in a broad range of cancers.

By linking thorium-227 to targeting molecules such as monoclonal antibodies, Algeta believes it may be possible to develop a pipeline of targeted alpha-pharmaceuticals, it notes.