Drugmaker Merck & Co. Inc. (NYSE: MRK) has reached a deal to purchase Viralytics Ltd., is a publicly traded Australian company that provides products used to treat a range of cancers. The deal is valued at approximately $394 million in cash, bringing the target’s premier product called Cavatak.

Viralytics is a biotechnology company that focuses on developing oncolytic immunotherapies. The Sydney, Australia-based target manufactures Cavatak from a formulation of an oncolytic common cold virus. The product is currently being studied in clinical trials for the treatment of bladder cancer, lung cancer and melanoma.

“Viralytics’ approach of engaging the innate immune system to target and kill cancer cells complements our immuno-oncology strategy, which is focused on the rapid advancement of innovative monotherapy approaches and synergistic combinations to help the broadest range of cancer patients,” states Dr. Roy Baynes, SVP and chief medical officer of Merck Research Laboratories. “We are eager to further build on Viralytics’s science as we continue our efforts to harness the immune system to improve long-term disease control and survival outcomes for people with cancer.”

Merck, based in Kenilworth, New Jersey, is a provider of healthcare products from its pharmaceutical, animal health, healthcare services and alliances divisions. The deal for Viralytics is expected to close by the end of the second quarter in 2018 circa June. The move is anticipated to lessen the buyer’s dependence on Keytruda, Merck’s immune-boosting cancer drug program. Viralytics’ Cavatak product is also being tested in combination with Keytruda.

The pharmaceutical industry remains to be a growing market for M&A. Deals within the sector: Sanofi’s acquisition of French drugmaker Biogen Inc.; the Carlyle Group’s (NYSE: CG) joint deal to purchase iNova Pharmaceuticals for $930 million; Eiger BioPharmaceuticals Inc.’s purchase of Celladon Corp.; Midatech Pharma (Nasdaq:MTP) purchased an anti-nausea drug from Galena Biopharma Inc. (Nasdaq:GALE); Perrigo Co.’s (NYSE: PRGO) acquisition of generic forms of Retin-A, used to treat acne, from Matawan Pharmaceuticals LLC; and Cathay Capital Private Equity’s backing of French pharmaceutical manufacturer Cenexi Group.

Merck & Co. Inc.