(Bloomberg) — Merck & Co. agreed to acquire privately held biopharma company OncoImmune for an upfront payment of $425 million in cash to gain a potential therapy for severe Covid-19.

text: Merck & Co Inc. signage is displayed on a monitor on the floor the New York Stock Exchange.Michael Nagle/Bloomberg Merck & Co Inc. signage is displayed on a monitor on the floor the New York Stock Exchange.OncoImmune shareholders will also be eligible for payments based on sales and on the achievement of certain regulatory milestones, the companies said in a statement Monday.

OncoImmune recently announced positive interim findings from a late-stage study evaluating its lead candidate, CD24Fc, for the treatment of patients with severe Covid-19. The therapy is designed to tamp down the inflammation caused by virus-induced damage to human cells, an underlying cause of complications in patients with severe disease.

The announcement by Merck comes as a slew of potential vaccines and treatments for the deadly disease are becoming available or approaching use. Vaccines made by Pfizer Inc., Moderna Inc. and AstraZeneca Plc have all produced positive results. And antibody treatments from Regeneron Pharmaceuticals and Eli Lilly & Co. have gained emergency clearance in the U.S.

“Recent clinical investigations support the view that CD24Fc may provide benefit beyond standard-of-care therapy for COVID-19 patients requiring oxygen support,” said Roger Perlmutter, president of Merck Research Laboratories.

Merck’s shares rose by as much as 2.1% in pre-market trading.

OncoImmune has initiated a Phase 3 trial of its therapy, involving at least 10 U.S. medical centers. The study will accept patients undergoing or intending to enroll in trials for other treatments as well, since CD24Fc has a novel mechanism of action, according to a statement by the closely-held company.

The acquisition is occurring as Merck has begun plans to usher the giant drugmaker into a new era of leadership. The company recently said Perlmutter will retire at the end of the year. Merck has also launched an internal succession hunt for the chief executive officer’s job now held by Kenneth Frazier.

(Adds Merck leadership changes in last paragraph.)