Merck & Co. has agreed to acquire Rigontec for up to €464 million (about $554 million), in a deal that will expand the cancer immunotherapy franchise of the Keytruda® (pembrolizumab) developer with a three-year-old Bonn University spinout whose technology targets the retinoic acid-inducible gene I (RIG-I) pathway.

Rigontec says its proprietary agonists are designed to activate RIG-I in order to induce both immediate and long-term antitumor immunity. The technology, Rigontec says, can be used for developing bifunctional RNA molecules for the treatment of infectious and inflammatory diseases in addition to cancer.

The company’s lead candidate, RGT100, is now in Phase I development evaluating treatment in patients with various tumors. In May, the company dosed its first patient in a Phase I/II study in which RGT100 will be administered intratumorally and intralesionally in solid tumors and lymphoma. The development of RGT100 is being overseen by CMO Eugen Leo, M.D., Ph.D., MBA, who was appointed in May.

“Rigontec’s immuno-oncology approach of engaging the innate immune system to safely eliminate cancer cells complements our strategy and our current pipeline,” Eric Rubin, M.D., vp of early-stage development, clinical oncology, Merck Research Laboratories, said in a statement. “We are eager to build upon Rigontec’s science as we continue our efforts in bringing forward meaningful advances for patients with cancer.”

Merck has agreed to shell out €115 million ($137 million) in up-front cash and up to €349 million ($416 million) in payments tied to achieving clinical, development, regulatory, and commercial milestones. The deal is subject to closing conditions, Merck said.