Merck MRK announced that it has entered into an exclusive licensing deal with China-based privately-held biotech company LaNova Medicines for the latter’s PD-1xVEGF targeting bispecific antibody candidate,

In a move to safeguard the company’s dominant position in cancer, Merck said Thursday it will license a new cancer drug from LaNova Medicines, a Shanghai-based firm, for $588 million upfront and as much as $2.7 billion in potential milestone payments.

As Merck prepares for its blockbuster immunotherapy Keytruda to face generic competition, it’s investing in a new cancer drug from LaNova.