Shire Pharmaceuticals could sweeten a bid for an American rival specialising in blood diseases by offering £8 billion in cash as part of what was a £19 billion all-share bid.
The Ireland-based company made an initial all-share offer approach to Baxalta in August but appeared to back down when its market value dropped 20 per cent in October.
Shire is now reported to have improved its offer by offering up to 40 per cent of the value of the deal in cash.
Shire is increasingly reliant on Vyvanse, its drug used to treat hyperactivity and wants to broaden its portfolio. Baxalta has a range of speciality drugs used to treat blood cancers and haemophilia.
Flemming Ornskov, the chief executive of Shire, has said the takeover