French drugmaker Sanofi has agreed a potential $2 billion vaccines deal with Translate Bio, expanding their collaboration in development of an inoculation against COVID-19 and sending the U.S. biotech company’s shares soaring.
The deal strengthens Sanofi’s credentials in a market engaged in a frantic race to find a safe and effective vaccine against the coronavirus disease that has killed more than 472,000 worldwide.
The companies said they would expand their partnership to develop a wide range of mRNA vaccines. The mRNA (messenger ribonucleic acid) technology, an area of Translate Bio expertise, instructs human cells to make specific proteins that produce an immune response to a disease.
Translate Bio’s Nasdaq-listed shares jumped 66% on the news before receding slightly to stand at $22.91 at 1509 GMT, up 41% on the day and 190% this year. Shares in Sanofi were flat at 93 euros.
The deal will give Sanofi about 7.2% of Translate Bio and exclusive worldwide rights to develop, manufacture and sell infectious disease vaccines using the U.S. company’s technology.
It also provides further validation of the mRNA approach for potential vaccines and treatments, which is also being pursued by biotech groups including BioNTech, Moderna and unlisted Curevac.