Most of the $1 billion Celgene will pay will go toward acquiring about 9.1 million shares of Juno at $93 a share. That is about double the price at which Juno closed on Monday, before rising about 40 percent after hours.

Juno, which is based in Seattle, went public in December in one of the largest initial offerings ever in the biotechnology industry. That reflected the excitement around its technology, which involves genetically engineering patients' immune system cells so they can recognize and attack tumors.

A deal with Celgene, which is one of the largest biotechnology companies, could help Juno better compete with Novartis, the Swiss pharmaceutical giant, which is developing similar treatments, which are called chimeric antigen receptor T cells, or CAR-T. Many other companies are also in the race.

No such drug is approved for sale yet, but in small clinical trials the approach has led to some substantial remissions among patients with various blood cancers.