Merck & Co., the New Jersey-based pharmaceutical giant, announced Tuesday it was acquiring the privately-held Peloton Therapeutics Inc. for up to $2.2 billion. The deal is expected to be finalized in the third quarter of this year.

Peloton is a clinical-stage biopharmaceutical company focused on experimental cancer drugs. It has developed two novel drugs for the treatment of kidney cancer, specifically metastatic renal cell carcinoma and von Hippel Lindau disease. The drugs target hypoxia-inducible factor-2α (HIF-2α) for the treatment of patients with cancer and other non-oncology diseases. The Dallas-based biotech’s lead candidate is PT2977 which is in late-stage development.

Under tthe agreement, a Merck subsidiary will acquire all outstanding shares of Peloton in exchange for an upfront payment of $1.05 billion in cash. Peloton shareholders will be eligible to receive a further $1.15 billion upon successful achievement of future regulatory and sales milestones.