As Pozen nears possible approval of its “safer aspirin” product, the Chapel Hill-based pharmaceutical firm and drug giant Sanofi say they are terminating an agreement reached in 2013 that was worth as much as $35 million to the smaller company.

The new triggered an immediate sell-off in Pozen shares.

Pozen (Nasdaq: POZN) issued a statement announcing the termination before the markets opened Monday.

Shares had closed at $8.89 on Friday but fell to as low as $7.07 immediately after trading began.

By 10 a.m., however, shares had recovered somewhat to $7.38. That was still a drop of 17 percent, 

“[Pozen] and Sanofi US have mutually agreed to terminate their agreement for commercialization of the investigational products, PA8140 and PA32540 effective November 29, 2014,” POzen said in a statement.

“As of the effective date of the termination, all licenses granted to Sanofi US will be terminated and all rights to the products will revert to Pozen.”

Sanofi recently replaced its chief executive officer, Chris Viehbacher.

Pozen and Sanofi made the licensing deal a year ago for two products designed to make aspirin safer. FDA approval had been expected earlier this year.

The FDA has provisionally approved the name Yosprala for the new products. Pozen is still awaiting an OK for its New Drug Application.

“Our goal at Pozen continues to be to maximize shareholder return. Management and the Board of Directors are taking this opportunity to evaluate all strategic options for Yosprala and Pozen,” said John Plachetka, Pozen’s chairman and CEO. “[W] we believe that the clinical profile of the drug, as described in the current FDA-proposed package insert, will meet or exceed the assumptions we made when we started our development and evaluated the commercial potential for this product. Given that the target population for Yosprala  could exceed 20 million patients in the US, we will be fully engaged in the near term evaluating strategic options available to the company.”

An approval decision for Pozen’s PA8140 and PA32540 had been expected in January and later was pushed back to April.

Pozen’s PA drugs are combination drugs that use Pozen’s delayed release technology to deliver aspirin in a way that reduces the gastrointestinal irritation patients can experience with aspirin alone. Pozen’s PA pills consist of omeprazole, which reduces stomach irritation, in a layer surrounding an aspirin core. PA32540 is the 325 mg dosage; PA8140 is the 81 mg dose.

Both PA dosages contain 40 mg of omeprazole in a form that is immediately released when the tablets are taken. The two doses are manufactured using “nearly identical procedures,” Pozen said. A new study compared the two drugs with the goal of providing more information about omeprazole after a patient takes the PA tablet. The goal of the phase I study was to study the pharmacokinetic profile – what happens to the drug after it is administered – of the omeprazole part of PA8140 and compare it with the pharmacokinetic profile of the PA32540 tablet.

The additional clinical trial not only delayed an approval decision on the PA drugs, it also delayed milestone payments Pozen stood to receive from Sanofi (NYSE: SNY).

In September 2013, Pozen signed a commercialization agreement with Sanofi, a deal that paid Pozen $15 up front for U.S. rights to the drug. The deal also pledged another $20 million in pre-commercialization milestones, which include FDA approval of the drug. Sanofi had planned to fold the PA drug into its cardiovascular drug portfolio, which is already led by blockbuster heart drug Plavix.