(Bloomberg) -- Pfizer Inc. and BioNTech SE agreed to their third joint messenger RNA project, an experimental shingles vaccine, expanding once more the collaboration that led to their successful shot for Covid-19.
The partners expect to start human trials of the new vaccine in the second half of this year, they said in a statement. Pfizer will pay BioNTech $225 million up-front to use its mRNA technology, including $75 million in cash and an equity investment of $150 million.
If the partners are successful, their shot will compete with GlaxoSmithKline Plc's best-selling vaccine Shingrix. There's opportunity for a competitor with few side effects that could be produced more efficiently around the world, Pfizer and BioNTech said.
Their partnership began in 2018 with work on an experimental flu shot, then continued with the coronavirus collaboration in 2020. Pfizer has said it expects $31 billion in revenue this year from the Covid shot.
Pfizer shares rose 1.9% in trading before U.S. exchanges opened. BioNTech's American depositary receipts climbed 2%.
Shingles, or herpes zoster, occurs when the varicella-zoster virus that causes chickenpox reactivates after years or decades of dormancy in the body. It can cause rashes that can result in long-term pain and complications, in particular in older or immune-compromised people.
As part of the agreement, BioNTech will pay Pfizer $25 million to use its research on antigens, the piece of the vaccine that spurs the immune system to respond. The German biotech also stands to get as much as $200 million in milestone payments as well as a share of potential profits.
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