That rabid growth you saw in Crucell's (Nasdaq: CRXL) stock price yesterday was because it signed an agreement with Sanofi-Aventis (NYSE: SNY) to market Crucell's rabies treatment.

Crucell's phase 1 product is a combination of two antibodies that attack the virus. It is designed to be used in combination with a vaccine that stimulates the patient's immunity. Currently, a more generalized antibody product -- rabies immunoglobulins (RIG) -- made by Sanofi, among others, is given in combination with the vaccine.

Sanofi is giving Crucell almost $15 million up front, but Crucell will still be responsible for all of the clinical development of the drug. It expects to begin a phase 2 trial in the first half of the year, so even with FDA Fast Track designation, the drug is probably a few years away from being on the market. Crucell is entitled to milestone payments of up to about $98 million if the product works.

Crucell retained the rights to sell the drug in Europe and to organizations like UNICEF, and the company will get royalties on Sanofi's sales to the rest of the world.

This is clearly a good hedge for Sanofi, since it'll get a piece of the action of the drug that will replace its RIG product, and it won't have to pay much if the drug turns out to be a flop in later clinical trials.

Since peak sales of the drug are only expected to be in the $300 million range, I'm not sure that the 16% bump the news has created in the last two days is justified. That said, I'd guess some of the increase is because investors are rethinking the 35% haircut they gave the company in 2007.

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Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. The Fool has a disclosure policy.