Just weeks after Dallas-based Peloton Therapeutics filed for an initial public offering, pharmaceutical giant Merck & Co. announced it is buying the biotech company in a deal valued as much as $2.2 billion.

The deal should close in the third quarter. Peloton is a clinical-stage oncology company that develops small molecule drugs to treat kidney cancer and other diseases. Its PT2977 drug for renal cell carcinoma is in a Phase II clinical trial.

John Josey

Merck said it is buying all outstanding shares of Peloton for an upfront payment of $1.05 billion in cash. Peloton also will be eligible for another $1.15 billion based on various regulatory and sales milestones.

“Merck is recognized as a leader in cancer research and shares our commitment to accelerating the development of candidates targeting HIF-2α to help patients with advanced cancers and other diseases,” Peloton CEO John Josey said in a statement. “We are proud to have advanced PT2977 to this stage of development and believe that Merck is well suited to build upon the progress our company has made.”

Merck said the deal brings unique expertise under its umbrella.

“This acquisition exemplifies Merck’s strategy to pursue novel therapeutic candidates based on exceptionally promising and innovative research,” Dr. Roger M. Perlmutter, president of Merck Research Laboratories, said in a release. “Peloton scientists have applied their unique expertise in HIF-2α biology to develop PT2977, which has already shown intriguing activity in the treatment of renal cell carcinoma. We look forward to advancing this late-stage asset as part of our broad oncology R&D program.”

Peloton had applied in April for a listing on the Nasdaq stock exchange under the stock symbol “PLTX.”

In February, Peloton closed on an oversubscribed $150 million Series E financing round led by RA Capital Management and was joined by new investors including Eventide Asset Management, Biotechnology Value Fund, OrbiMed, EcoR1 Capital, Vida Ventures, Curative Ventures, and Driehaus Capital Management LLC.

Peloton also plans to begin patient enrollment in a Phase III trial in patients with metastatic clear cell RCC that has been previously treated, the website said.