Merck has signed a licensing agreement worth up to $3.3 billion with Shanghai-based LaNova Medicines to develop, make and sell an experimental cancer drug, the two companies said on Thursday.

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.