Novavax Stock Soars on New Funding for Covid-19 Vaccine

Text size

Shares of the small-cap vaccine-specialist biotech
Novavax
jumped more than 50% on Tuesday morning after the company announced that it would receive up to $388 million from a nongovernmental group called the Coalition for Epidemic Preparedness to fund development of its experimental Covid-19 vaccine.

The influx of capital will fund preclinical, Phase 1, and Phase 2 trials of the vaccine, and will help pay for the transfer of the vaccine technology to outside manufacturers. CEPI said the new funding would allow Novavax (ticker: NVAX) to start manufacturing “millions of doses” by the end of this year, and that the company would aim to escalate production in 2021.

Investors appear to have seen the investment as a sign of CEPI’s faith in the company, which is one of many developing a Covid-19 vaccine. Though its program is relatively advanced, it will be competing against many of largest drugmakers in the world, including most of the largest vaccine makers.

Novavax’s experimental vaccine is scheduled to begin Phase 1 trials this month, with data expected in July. The company, in its own release, said it has a goal of manufacturing 100 million doses by the end of this year and one billion by the end of next year.

CEPI, which is funded and backed by a number of governments and private foundations, including Australia, Canada, the United Kingdom, Japan, Germany, and the Bill & Melinda Gates Foundation, previously committed $4 million to Novavax. The new tranche of $384 million makes Novavax by far the largest recipient of CEPI’s funding for Covid-19 vaccine research and development.

Shares of Novavax were up 56.5%, at $38.35, as of 11:00 Tuesday morning. The stock is up 864% so far this year. The company, which issued its first-quarter earnings report on Monday, has no approved products. It reported a net loss for the first quarter of 2020 of $25.9 million. It is also developing a flu vaccine.

Write to Josh Nathan-Kazis at [email protected]