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STORY: Shares of vaccine maker Novavax spiked as much as 146% on Friday, after announcing it had struck a licensing deal with French drugmaker Sanofi for its COVID-19 vaccine.

Under the deal, which is worth at least $1.2 billion, Sanofi will get a less than 5% stake in the U.S. biotech firm.

That values Novavax at nearly double its current market capitalization.

The deal also allows Novavax to remove its “going concern” warning, which it first issued in February of last year over doubts about its ability to stay in business.

Novavax had struggled to get its vaccine to the market in a timely manner, while Pfizer and Moderna were quicker.

The cash infusion from Sanofi is likely to strengthen the balance sheet of the company, whose shares lost more than 98% of their value since the early days of the pandemic.

Friday's announcement squeezed out short sellers, who had bet the value of the stock would continue to fall.

According to analytics firm S3 partners, short sellers had lost roughly $255 million on paper.

For Sanofi, the deal with Novavax could help bolster its flu vaccine franchise as Pfizer and Moderna develop rivals.

Novavax said on Friday it expected the deal with Sanofi to be worth billions of dollars more in the future.