(Bloomberg) -- French drugmaker Sanofi is strengthening its pact with U.S. vaccine developer Translate Bio Inc. to develop shots for Covid-19 and the flu in a deal that could be valued at as much as $2.3 billion.
Sanofi will pay $425 million upfront, partly by acquiring Translate Bio shares at a premium of almost 60%, the companies said Tuesday. The French drugmaker also agreed to pay as much as $1.9 billion upon meeting various goals, plus royalties.
Translate Bio and Sanofi formed an alliance and license agreement in 2018 to develop mRNA vaccines for infectious diseases. The companies are studying several vaccine candidates for Covid-19, aiming to start a clinical trial in the fourth quarter of this year.
Sanofi shares were little changed in Paris trading at 93.03 euros.
The French drugmaker announced plans earlier this month to invest 610 million euros ($690 million) boosting its vaccine business with two new production and research centers in its home market.
Messenger RNA technology is a new approach that tries to defeat a pathogen by injecting ribonucleic acid into the body that then teaches cells to identify and attack the virus.
Sanofi will get worldwide rights for infectious disease vaccines developed in the pact. The companies are also working on shots for influenza and other pathogens.
The upfront payment consists of $300 million in cash and the purchase of $125 million worth of shares at a price of $25.59 each. That’s 58% higher than Monday’s closing price.
About $360 million of the milestone payments are anticipated over the next several years, with the bulk available after that. Translate Bio is based in Lexington, Massachusetts.