Merck & Co. Inc. has taken another step to bulk up its pipeline and complement the Keytruda franchise with the $2.75 billion acquisition of cancer drugmaker VelosBio Inc.

Kenilworth, N.J.-based Merck will bring on the antibody drug VLS-101, which is currently being evaluated in an early-stage clinical trial for blood-related cancers. A phase 2 study of the candidate in solid tumors commenced in October. VelosBio also has two drugs in preclinical development.

Cantor Fitzgerald analysts said the deal "makes sense," and aligns with the company's strategy of complementing its existing pipeline through acquisitions or other deals.

Executives on an Oct. 27 earnings call touted a $725 million partnership signed with Seagen Inc. in September to develop two cancer drugs. Merck also agreed to acquire a $1 billion stake in the company, formerly known as Seattle Genetics.

Seagen and VelosBio's therapies belong to a class of drugs called antibody-drug conjugates, a class of pharmaceuticals that target cancer cells while leave healthy cells alone. These two deals add to Merck's investments in this area, according to Cantor Fitzgerald.

Cantor Fitzgerald said these investments will help diversify Merck's portfolio, largely dominated by the blockbuster cancer therapy Keytruda. The therapy notched $3.7 billion in revenue for the third quarter, a 21% rise over the same period the year before.

Merck has trialed Keytruda in hundreds of studies, often combining the therapy with others to try to boost effectiveness.

Cantor Fitzgerald said the data on VLS-101 in blood cancers is encouraging and could expand Merck's reach in cancer on its own. The firm is interested to see how the company may pair VelosBio's candidate in combination therapies to treat blood cancers and solid tumors. Merck is also developing Lenvima in phase 2 clinical trials for solid tumors.

The deal is expected to close by the end of 2020.