The companies are discussing a price above $200 a share for Seagen, the report said, citing people familiar with the matter.
Shares of Seagen, which declined to comment on the report, closed at $175 on Wednesday. Merck did not immediately respond to Reuters request for comment outside business hours.
Merck and Seagen are seeking to seal a deal on or before the announcement of Merck's second fiscal-quarter earnings set for July 28, the WSJ report said.
(Reporting by Shivam Patel in Bengaluru; Editing by Arun Koyyur)