In what has become a common move by large pharmaceutical companies attempting to revitalize their drug research, German healthcare conglomerate Bayer has acquired a small biotechnology company developing drugs for cancer and immune diseases.

Bayer on Thursday said it will pay $1.5 billion upfront for the company, Vividion Therapeutics, which has disclosed several drug candidates it’s preparing for clinical tests. Vividion could receive as much as $500 million more, should it hit certain development milestones.

The deal comes at an interesting time for Vividion, which up until late June had been preparing to raise money via an initial public offering. But the biotech was won over by Bayer’s offer, as one company leader explained it had become “frustrating” to prioritize a few opportunities while sidelining others.

“When a small biotech company has to take a product all the way through deep clinical development and commercialization, it’s a huge cost,” said Benjamin Cravatt, a Vividion co-founder and board member. “And that cost comes at the expense of other endeavors in almost all cases.”

Cravatt said Bayer’s resources and global reach means Vividion, which will operate independently within the pharma, won’t have to make as many trade-offs. He suggested the deal would allow the company to develop substantially more medicines than it would have been able to independently within the same time frame.

“It became a much more preferred path for us, relative to an IPO path, where we would have been successful but would have had to continue to pursue our many opportunities in what I would consider a somewhat arbitrarily defined prioritization,” he said.

Once the deal closes, Bayer will own full rights to Vividion’s discovery platform, which relies on an approach to drug screening that Cravatt developed with Vividion’s other co-founders at The Scripps Research Institute in California. Using “chemoproteomic screening,” the company says it can better assess how would-be small molecule drugs interact with protein targets, as well as find previously unknown or undruggable “pockets” on those proteins.

Vividion was founded in 2013 and, with backing from high-profile capital firms like ARCH Ventures and Versant Ventures, has raised $268 million over several rounds of financing. In a sign of Vividion’s research promise, both Bristol Myers Squibb and Roche, two cancer drug powerhouses, are working with the company on several of its programs.

For Bayer, the acquisition extends a streak of dealmaking meant to bolster its pharmaceutical division. Last October, Bayer acquired the North Carolina-based gene therapy developer AskBio in a similarly priced $2 billion deal. The German company also bought Bluerock Therapeutics and has invested in Century Therapeutics.

As with the AskBio deal, the agreement with Vividion will allow the biotech to operate at “arm’s length.”

“Vividion will by and large operate as an independent R&D unit and will jointly develop programs,” Christian Rommel, head of pharmaceuticals R&D at Bayer, said. “At some point, when the projects have matured and they are ready to benefit from the capabilities and expertise of Bayer, then we will further develop them.”

Bayer’s history of allowing companies it’s acquired or invested in to operate more independently was one draw for Vividion, according to Cravatt. He said the deal structure is the “best of both worlds,” where the smaller biotech can work nimbly but still have the support and resources of a global corporation.

In its registration statement to go public, Vividion had said it hopes to advance its first candidate into clinical testing in 2022.

Vividion’s lead programs include a drug candidate for cancers driven by mutations in the NRF2 gene, as well as one that activates NRF2 proteins to tamp down inflammation in conditions like irritable bowel disease.

Rommel views Vividion’s drugs as a good fit for Bayer’s ambitions to restock its pharmaceutical pipeline. “The way we conduct our science together with Vividion, we will have better chances of success,” he said. “We will have a higher probability of making the right decision in the early clinical development phase.”

The deal is expected to close later this year.