Merck & Co. Inc. and Cocrystal Pharma Inc. have entered into an exclusive license and collaboration agreement to discover and develop certain proprietary antiviral agents for influenza A and B.

Influenza, commonly referred to as flu, is an infectious disease that causes fever, runny nose, sore throat, muscle pains, headache and tiredness.

Under the agreement, Merck will fund research and development for the program and will hold rights for worldwide commercialization of any products developed during the program.

Cocrystal will be paid an undisclosed upfront sum and is eligible to receive payments related to designated development, regulatory and sales milestones. The company has the potential to earn up to $156 million, as well as undisclosed royalties on product sales, according to the Jan. 3 news release.

Tucker, Ga.-based Cocrystal is a clinical-stage biotechnology company discovering and developing novel antiviral therapeutics that target the replication machinery of influenza viruses, hepatitis C viruses and noroviruses.

Cocrystal's shares were up 20.53% to $4.58 per share as of 12:09 p.m. ET on Jan. 3 following the news.