In what could end up being a deal that tops $1 billion, Merck & Co. Inc. inked a collaboration and license agreement with Janux Therapeutics to find, develop and commercialize T cell engager immunotherapies for cancer patients.

Merck selected two targets, each of which could bring Janux as much as $500.5 million in up front and milestone payments in addition to royalties on the sale of products the collaboration brings to the world. Merck is picking up the R&D tab while receiving the exclusive worldwide license to any products and the intellectual property.

Janux, of San Diego, is developing immunotherapies designed to trigger the immune system to kill specific tumors while leaving the healthy tissue alone. T cell engagers, the company said, bind to a tumor cell and use the patient’s T cells to eliminate the tumor. Janux has preclinical data demonstrating that its candidates don’t have the shortcomings often found in standard T cell engagers, including cytokine release, healthy tissue toxicities and systemic immune activation.

David Campbell, Janux’s president and CEO, founded the company in 2017 following work at Affymax Inc. and Bayer AG.

Janux springs from the Avalon Ventures accelerator COI Pharmaceuticals Inc., of San Diego.

Merck continues to spend big money in collaborations and acquisitions as the year comes to a close. In late November, the company acquired Oncoimmune Ltd. for an up-front $425 million in cash to bring COVID-19 therapeutic CD24Fc, a recombinant fusion protein targeting the innate immune system that is faring well in treating pandemic patients. Before the acquisition is completed, Oncoimmune also said it will spin out to a new entity some rights and assets unrelated to the CD23Fc program. That new entity will be owned by Oncoimmune shareholders while Merck becomes a minority shareholder. It also brings a $50 million investment to sweeten the pot.