Merck (NYSE: MRK) is buying cancer drug research company VelosBio Inc. from Pappas Capital and other investors for $2.75 billion. The target is developing drugs that can potentially treat breast and lung cancer.

VelosBio CEO Dave Johnson says as part of Merck the company "is now well positioned to achieve its maximum potential to benefit appropriate cancer patients in need.”

“At Merck, we continue to bolster our growing oncology pipeline with strategic acquisitions that both complement our current portfolio and strengthen our long-term growth potential,” says Merck president Roger Perlmutter.

"We are prioritizing the development of several promising oncology candidates with the potential to improve the treatment of advanced cancers," the company adds.

For Merck, the pharmaceutical company has been active in M&A. Earlier in 2020, Merck bought ArQule Inc. for $2.7 billion. ArQule develops biopharmaceutical products that are designed to treat cancer. And most recently, Merck completed its deal for vaccine maker Themis in June. Themis is working on developing a vaccine to potentially treat the coronavirus.

J.P. Morgan Securities LLC and Gibson Dunn & Crutcher LLP are advising Merck. Centerview Partners LLC and Cooley are advising VelosBio.

For more on the Covid-generated boom in pharmaceutical and healthcare deals, see Covid-19 Vaccines, Tests and Treatments Spur Healthcare M&A.