Merck announced Monday morning that it is acquiring Imago BioSciences for $1.35 billion.

Imago is a clinical stage biopharmaceutical company developing treatments for myeloproliferative neoplasms and other bone marrow diseases. 

Through the deal, Merck will add Imago’s lead drug candidate, bomedemstat, which is an investigational orally available lysine-specific demethylase 1 inhibitor to its portfolio. Bomedemstat is currently being evaluated in Phase 2 clinical trials for the treatment of several conditions including essential thrombocythemia, myelofibrosis and polycythemia vera.

Following the closing of the tender offer through a Merck subsidiary and certain regulatory conditions, the transaction is expected to close in Q1 2023. 

“We continue to invest in our pipeline with a focus on applying our unique capabilities to unlock the value of breakthrough science for the patients we serve,” Merck CEO Robert M. Davis said in a statement. “This acquisition of Imago augments our pipeline and strengthens our presence in the growing field of hematology.”

For his part, Imago CEO Dr. Hugh Y. Rienhoff, Jr. called the deal “a testament to more than a decade of pioneering research” by the company’s scientists and said Merck’s resources will “maximize the therapeutic potential of bomedemstat while providing important value for shareholders.”

Merck’s purchase of Imago comes months after the company was reportedly in talks for a $37 billion merger with Seagen that eventually stalled at the end of the summer. At the time the deal was first rumored, sources told The Wall Street Journal that a transaction would be difficult to pull off due to the heightened risk of a regulatory challenge. 

The deal was also announced less than a month after Merck released its latest earnings report. Highlights from the company’s most recent financials include worldwide sales increasing 14% to $15 billion thanks in large part to the performance of Lagevrio. The drug generated sales of $436 million, marking a 10% year-over-year increase.

Additionally, former longtime Merck CEO Kenneth Frazier announced that he would retire as the company’s chairman of the board, ending a decades-long career at the New Jersey-based pharma giant.