Novavax Inc. announced it will secure fresh capital on Monday through a preferred $200 million stock proposition as the company races to produce a new coronavirus vaccine, sending its shares up 10.5 percent.
The stock agreement is in addition to a $60 million investment from the US Defense Department to boost the development of the biotech group's experimental COVID-19 vaccine.
Novavax shares soared 8.6 percent before noon on Monday, after climbing to 12.6 percent earlier in the day. The rally came from the announcement by the firm that it raised about $200 million in gross proceeds through a private equity deal with RA Capital Management.
Novavax will sell to an affiliate of RA Capital Series A Convertible preferred stock which is convertible into nearly 4.4 million common stock shares.
The biopharma group's latest capital increase proves just how solid the firm has become to the investment manager circles. Chief executive officer Stanley Erck disclosed the company's management team believes the support from RA Capital will signal a "high level of confidence in the significant progress of our COVID-19 and influenza vaccine programs," as reported by Keith Speights of The Motley Fool.
The private placement would bolster the financial position of Novavax, which as of March 31 amounted to $244.7 million, including financial, cash equivalents, marketable securities, and limited funds.
Novavax disclosed last month that it will secure up to $384 million in extra funding from the Coalition for Innovations in Epidemic Preparedness to develop and produce its COVID-19 vaccine candidate. Novavax has already used some of its cash to acquire Praha Vaccines based in the Czech Republic to boost its production capacity for the COVID-19 drugs.
While there is a high level of interest in Novavax's COVID-19 vaccine program, with its flu vaccine NanoFlu, the firm has another promising candidate. In March Novavax announced positive late-stage results for NanoFlu. The $200 million raised via this new private placement deal would help finance both the development of NVX‐CoV2373 and NanoFlu regulatory approval process.
Novavax, Inc. is a late-stage biotechnology company that promotes improved health globally through the discovery, development, and commercialization of innovative vaccines to prevent serious infectious diseases.
RA Capital Management is a multi-stage investment manager dedicated to evidence-based investing in public and private healthcare and life science companies developing drugs, medical devices, and diagnostics.
There are two different key areas for investors to monitor with Novavax, both of which could serve as important catalysts for the stock. Novavax estimates to post initial results next month from its Phase 1 clinical study analyzing the COVID-19 vaccine candidate.
