Shares of Immatics (NASDAQ:IMTX) surged more than 6% in pre-market today following the announcement of a cancer drug collaboration with vaccine giant Moderna (NASDAQ:MRNA), valued at up to $1.8 billion.

The two companies have revealed a strategic research and development partnership aimed at pioneering innovative and game-changing therapies for cancer patients facing significant unmet medical needs.

Under the terms of the agreement, Immatics will receive an initial payment of $120 million, coupled with continuous research funding. Additionally, they have the potential to earn milestone payments linked to development, regulatory approvals, and commercial accomplishments, which could exceed $1.7 billion.