Why Novavax Stock Surged 14% on Friday

What happened

Any time there's a notable development with the coronavirus, shares of vaccine makers involved in the fight against it tend to rise. That, combined with the announcement of a new supply deal, helped push coronavirus stock Novavax (NASDAQ: NVAX) to a nearly 14% gain on Friday.

So what

The deal is an advance purchase agreement between Novavax and Israel's Ministry of Health. Under its terms, the Middle Eastern nation will take 5 million doses of the company's NVX-CoV2373 and holds an option for 5 million more. The financial particulars of the deal were not disclosed.

Person about to receive a vaccine shot from a medical professional.

Image source: Getty Images.

The Novavax jab is not yet authorized or approved for use in Israel; so far, the country has only approved fellow biotech Moderna's mRNA-1273 (Spikevax) and Comirnaty from Pfizer and BioNTech.

In its press release on the matter, Novavax wrote that it "will work with the Ministry of Health to obtain the necessary authorizations and finalize plans for distribution in Israel pending regulatory approval."

The news comes amid reports of a new variant of the coronavirus similar to omicron. The officially titled omicron BA.2 has been detected in several U.S. states, including California and Texas. Information is still somewhat sparse about it; early findings seem to indicate it might be slightly more transmissible than "original" omicron.

Now what

Novavax is certainly a scrappy competitor in the "Global Coronavirus Vaccine Contest." Comirnaty and mRNA-1273 are the clear front-runners in many regions, but Novavax isn't giving up on being a major jab supplier too. The signing of a new, top-level supply agreement is indisputably good news and makes NVX-CoV2373 an increasingly useful weapon in the world's coronavirus-fighting arsenal.

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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool recommends Moderna Inc. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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