Novavax Stock Soars After a $1.6 Billion U.S. Infusion for a Covid-19 Vaccine
The biotech company Novavax took a leap forward in the Covid-19 vaccine race Tuesday morning, announcing that the U.S. government had awarded it $1.6 billion to test and manufacture its Covid-19 vaccine.
The company will deliver 100 million doses of the vaccine to the federal government, which it said could be ready “as early as late 2020.”
Shares of Novavax (ticker: NVAX) climbed nearly 30% in premarket trading on Tuesday. The $1.6 billion infusion comes from Operation Warp Speed, the federal government program meant to accelerate vaccine development.
It moves Novavax, among the smallest companies with an advanced Covid-19 vaccine program, into the top tier of vaccine developers. “With this type of financial backing, this places NVAX in a very enviable position should its data look compelling later in the year,” Jefferies health-care trading-desk analyst Jared Holz wrote in a note Tuesday.
Novavax’s experimental Covid-19 vaccine is in a Phase 1/2 trial involving 130 participants funded by $388 million from the Coalition for Epidemic Preparedness Innovations, a nongovernmental organization funded by governments and foundations. Data from that trial are expected this month, with a Phase 2 trial set to begin soon afterward.
“Adding Novavax’ candidate to Operation Warp Speed’s diverse portfolio of vaccines increases the odds that we will have a safe, effective vaccine as soon as the end of this year,” Health and Human Services Secretary Alex Azar said in a statement.
Novavax has no marketed products. The Covid-19 vaccine it is developing is a so-called adjuvanted recombinant nanoparticle vaccine, a technology that is relatively more proven than the modality on which experimental Covid-19 vaccines from Pfizer (PFE) and Moderna (MRNA) are based.
Shares of Novavax are up a startling 1,895% this year. Four of the five analysts who follow the stock rate it a Buy, according to FactSet.
In a statement out Tuesday, Novavax said the U.S. funding would pay for late-stage clinical development, the establishment of large-scale manufacturing, and 100 million doses of the vaccine. The company said it plans a 30,000 subject Phase 3 clinical trial that will begin this fall. The agreement also lays the groundwork for a follow-on pledge by the government to purchase additional doses of the vaccine.
Other companies that have received funding through Operation Warp Speed for their experimental Covid-19 vaccines include Johnson & Johnson (JNJ), AstraZeneca (AZN), and Moderna. The Novavax deal is the largest so far.
Shares of Novavax were up 29.9% to $103.20 around 9 a.m. Eastern time. Dow Jones Industrial Average futures were down 0.9%.