Merck & Co. (NYSE: MRK) has agreed to acquire cancer drugmaker Harpoon Therapeutics Inc. (Nasdaq: HARP) for $680 million as it seeks to solidify its leadership position in the profitable oncology space.

The drugmaker will pay $23 a share for South San Francisco-based Harpoon, it said in a statement.

Merck is looking for new sources of growth as its top-selling medicine, the cancer immunotherapy Keytruda, is likely to face pricing pressure at the end of this decade. Keytruda generated $20.9 billion in 2022, making it one of the best-selling drugs in the world.

Harpoon is developing drugs that harness the body’s immune system to fight cancer, including a type of lung cancer and multiple myeloma. Its technology involves T-cell engagers, drugs that aim to use a patient’s own immune system to kill tumor cells. The company’s lead candidate targets a molecule called delta-like ligand 3 that is expressed at high levels in small cell lung cancer and neuroendocrine tumors.

It’s currently in an early-stage trial as a single agent for patients with certain advanced cancers and is being studied in combination with an existing immunotherapy for small cell lung cancer.

Merck has been actively building its new product portfolio with outside drug candidates. In October, it agreed to buy the rights to sell Daiichi Sankyo Co.’s three experimental cancer drugs in a deal that involved $4 billion upfront and as much as $22 billion in potential future payments. In April, Merck announced an $10.8 billion deal for Prometheus, a maker of autoimmune drugs.

The deal for Harpoon is expected to close in the first half of 2024. Evercore Inc. is financial adviser to Merck, while Centerview Partners is advising Harpoon.