US awards $1.6 billion to Novavax for COVID-19 vaccine research and development

The federal government awarded biotech firm Novavax, Inc., $1.6 billion for a COVID-19 vaccine, which would ideally be distributed to 100 million people by January 2021 if found to be safe and effective.

This is the most recent in a succession of biotech companies that have received awards from the federal government for researching a safe and effective vaccine to fight against the coronavirus pandemic.

What are the details?

On Tuesday, the Maryland-based company said that the U.S. is paying the vaccine maker the sum in order to speed up development of a coronavirus vaccine.

"What this Warp Speed award does is it pays for production of 100 million doses, which would be delivered starting in the fourth quarter of this year, and may be completed by January or February of next year," Novavax chief executive Stanley Erck told Reuters.

According to the New York Times, "the deal is the largest that the Trump administration has made so far with a company as part of Operation Warp Speed, the sprawling federal effort to make coronavirus vaccines and treatments available to the American public as quickly as possible."

The Times reports that the company "has never brought a product to market."

In a Sunday interview, Erck said that he was not certain where the $1.6 billion in government funds would be drawn from, but a spokesperson for the company later said that the funds would be taken from a "collaboration" between the U.S. Health and Human Services Department and the Department of Defense.

Health and Human Services Secretary Alex Azar said that adding Novavax to Operation Warp Speed's "diverse portfolio" — which includes AstraZeneca, Johnson & Johnson, Merck, and Moderna Therapeutics, among others — "increases the odds that we will have a safe, effective vaccine as soon as the end of this year."

The U.S. awarded $1 billion to AstraZeneca in May, $450 million to Johnson & Johnson in March, $38 million to Merck in May, and $483 million to Moderna Therapeutics in April.

The Times reported that the company "would ensure that 100 million doses — enough for 50 million people to receive an additional shot and a booster — are delivered by the first quarter of 2021," so long as its vaccine is proven to be safe and effective following expedited clinical trials.

According to CNBC, Novavax stock skyrocketed more than 35% in pre-market trading following the announcement.

You can read more about the award as well as the company's background here.