(Bloomberg) -- Covid-19 vaccine maker Moderna Inc. rose the most in two months after Merck & Co. said it would exercise an option to maintain its partnership with the biotech company on a messenger RNA cancer vaccine.

Moderna will receive $250 million from Merck in exchange for joint development and future commercialization of the vaccine, which is in mid-stage testing as a treatment for high-risk melanoma, the companies said Wednesday in a statement.

Shares of Moderna gained as much as 17%, the biggest intraday jump since Aug. 3, before paring gains to 10% as of 11:09 a.m. in New York.

Moderna, Pfizer Inc. and other rivals are increasingly looking at new applications of mRNA technology after it was quickly deployed to combat the pandemic. Traditional vaccine practice placed weakened or inactivated germ into our bodies in an effort to train the immune system to fight the pathogen. The new technology has revolutionized vaccines, using mRNA created in a lab to induce cells to make proteins that catalyze an immune response. Vaccine makers have quickly gotten on board with billions of dollars in related investments.

Merck and Moderna’s agreement, initially entered in 2016, involves Moderna’s mRNA-4157/V940 cancer vaccine that’s designed to stimulate an immune response to cancer based on the DNA sequence of the patient’s tumor. The companies are testing the experimental vaccine in tandem with Merck’s cancer blockbuster Keytruda, which brought in more than $17 billion last year. Keytruda blocks proteins that prevent the immune system from recognizing tumors.

Edward Tenthoff, senior research analyst at Piper Sandler, said he saw the Moderna and Merck statements as a positive signal ahead of the clinical trial results this quarter and reiterated his firm’s overweight rating and $214 price target. Jefferies’ Michael Yee read the announcements in a similar manner, surmising that Merck has reasonably and likely seen enough data to make a determination to opt in and pay $250 million.

“Investors are likely to be more excited about the program given the signal Merck is willing to pay so much overall and so close to the readout,” Yee said in a note.

Moderna President Stephen Hoge said in the statement that continuing the alliance with Merck “is an important milestone as we continue to grow our mRNA platform with promising clinical programs in multiple therapeutic areas.”

(Updates shares in second paragraph and adds analyst comments starting in the sixth.)

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