Novavax (NASDAQ:NVAX) is looking to have its turn in the novel coronavirus vaccine spotlight on Tuesday. Shares of the underdog vaccine maker are popping higher — NVAX stock is up almost 4% in trading. Why? Novavax announced it could produce 2 billion vaccine doses in 2021.
Driving the pop in NVAX stock on Tuesday is one critical piece of news. The Serum Institute of India will now produce the key ingredient in its coronavirus vaccine candidate. Importantly, this will significantly boost its manufacturing capacity.
But why does this really matter? Pfizer (NYSE:PFE), BioNTech (NASDAQ:BNTX) and AstraZeneca (NYSE:AZN) continue to progress through trials. Novavax is a relatively small player in the race. The Maryland-based company is still in Phase 2 trials, while some of its larger rivals like Pfizer are wrapping up Phase 3.
In many ways, investors are not ready to give up on the likes of Novavax. Because it is a purer play on the vaccine race, it has provided a nice pop in 2020. If the company were to bring a vaccine to market, NVAX stock would likely shoot to the moon. AstraZeneca and Pfizer have many more products that contribute to their revenue and profits.
There is one other exciting component to this news. The deal with the Serum Institute would seriously help Novavax keep pace with its larger rivals. It just needs to navigate into later-stage trials.
NVAX Stock Pops on Supply Deal
As Jonathan Gardner wrote for BioPharma Dive, now that Novavax can produce 2 billion doses a year starting in 2021, it can truly rival those larger companies. Does it still look like an underdog? For investors, that means if Novavax yields strong results, it could still be a real contributor to worldwide vaccination. Supporting that case is a series of deals the company has already negotiated.
Knowing that it needs some manufacturing help, Novavax has worked to secure partners. Prior to the Tuesday announcement, it has secured deals with Japanese Takeda (NYSE:TAK). It also acquired Praha Vaccines, a Czech company. Through just the deal with Praha Vaccines, Novavax gained the capacity to produce 1 billion doses.
Plus, this deal with the Serum Institute expands an existing arrangement Novavax had to produce and distribute its vaccines in low and middle-income countries. As the United States ramps up Operation Warp Speed and the European Union starts to nab doses, there is pressure on vaccine makers to also take care of less wealthy countries. Investors should note that true global eradication of the novel coronavirus would ultimately be the best-case scenario, and usher in the truest return to normal.
On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Sarah Smith is a Web Content Producer for InvestorPlace.com.
