Canada Agrees to Pay for Unused Covid Shots, Prompting Jump in Novavax Stock

Uncertainty surrounds the number of doses of Novavax’s vaccine, its only commercially available product after 35 years, that were left unused. The amended agreement stipulates that Novavax will provide Canada with fewer doses of its vaccine on a revised delivery schedule.

However, the agreement allows Canada to terminate the contract if Novavax fails to obtain regulatory approval for vaccine production at the Canadian government’s biomanufacturing facility by December 31, 2024.

This announcement brings hope to investors, as the financially challenged company previously cast doubt on its ability to sustain its operations earlier this year.

In May, Novavax presented a more optimistic outlook and announced a comprehensive cost-cutting plan alongside its first-quarter earnings report. The company predicts revenue of $1.4 billion to $1.6 billion for 2023.

Following this news, Novavax’s stock price increased by approximately 30%. However, the stock has decreased by 4% since the beginning of the year, having lost over 90% of its value in 2022.

Novavax still faces numerous challenges, including competition from Pfizer and Moderna in the commercial COVID-19 vaccine market. Additionally, the company is involved in a pending $700 million arbitration case concerning a canceled vaccine purchase agreement.