Novavax stock jumps after Canada agrees to pay for unused Covid shots

It’s unclear what number of doses of Novavax’s jab – its only commercially available product after 35 years – went unused. Under the amended agreement, Novavax may even provide Canada with fewer doses of its vaccine on a revised delivery schedule. 

Nevertheless, Canada can terminate the contract if Novavax fails to receive regulatory approval for vaccine production on the Canadian government’s biomanufacturing facility by Dec. 31, 2024, in accordance with the agreement.

The announcement is one other sign of hope for investors after the cash-strapped company raised doubts about its ability to remain in business earlier this yr. 

In May, Novavax adopted a more positive outlook and announced a sweeping cost-cutting plan alongside its first-quarter earnings report. The corporate said it expects 2023 revenue of between $1.4 billion and $1.6 billion.

Novavax’s stock price jumped around 30% on that news. The corporate’s stock price is down 4% because the start of the yr after after shedding greater than 90% of its value in 2022.

Novavax still faces a lot of challenges ahead, including competing with Pfizer and Moderna within the industrial Covid vaccine market and a pending $700 million arbitration over a canceled vaccine purchase agreement.