Novavax signed a $1.2 billion licensing agreement with Sanofi that includes commercializing a combined COVID-19 and flu shot.

Novavax will receive $500 million in upfront payments as well as a further $700 million if all development, regulatory and launch milestones are met, according to a statement Friday. Novavax, which will receive tiered royalties on any vaccine sales, said Sanofi is also taking a minority equity stake of about 5% in the US company.

The pact links two big players in the vaccine world that both missed out on the rush to develop and commercialize COVID shots quickly during the pandemic. Amid various setbacks, Sanofi and Novavax ceded tens of billions of dollars in sales to nimbler messenger-RNA developers including the Pfizer-BioNTech alliance and Moderna.

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