Merck has signed an agreement to buy biopharmaceutical company Tilos Therapeutics for a total consideration of up to $773m.

Founded by Boehringer Ingelheim Venture Fund and Partners Innovation Fund, Tilos Therapeutics is engaged in the development of anti-latency associated peptide (LAP) antibodies targeting the latent transforming growth factor beta (TGFβ) complex.

The company aims to offer therapies for patients with cancer, fibrosis and autoimmune diseases.

Merck Research Laboratories discovery and translational medicine senior vice-president Dr Dean Li said: “At Merck, we continue to enhance our robust pipeline through active execution of our business development strategy.

“Tilos has developed a compelling portfolio of candidates that employ a novel approach to modulating the potent signalling molecule TGFβ by binding to latency associated peptide, with potential applications across a range of disease indications.”

TGFβ is generated as a complex with LAP, a potent cytokine known to be associated with cancer and fibrotic disease development. LAP is known to hold TGFβ in an inactive state until it is released.

Previous research demonstrated that anti-LAP antibodies inhibit TGFβ’s release from the TGFβ-LAP complex, making way for a potential new therapeutic mechanism to address TGFβ activity.

Tilos Therapeutics CEO Dr Barbara Fox said: “We are proud that the Tilos team has advanced the discoveries of our scientific founders by developing a portfolio of anti-LAP antibodies designed to realise the full potential of TGFβ-modulating therapeutics.

“This agreement with Merck, an industry leader in biopharmaceutical research and development, provides meaningful validation for our therapeutic approach and best positions our pipeline for broad clinical and commercial success.”

Last month, Merck entered a definitive agreement to buy another oncology drugs developer Peloton Therapeutics for an upfront payment of $1.05bn.

The deal includes an additional $1.15bn in potential future regulatory and sales milestones for certain candidates.