What happened

Shares of the clinical-stage vaccine developer Novavax, Inc. (NVAX 5.30%) spiked by as much as 28% in pre-market trading Tuesday morning. The biotech's stock is responding to the news that the Coalition for Epidemic Preparedness (CEPI) awarded the company a $4 million grant to support the development of a COVID-19 vaccine.

Novavax is presently evaluating several COVID-19 vaccine candidates in pre-clinical studies, with the goal of advancing the most promising of the bunch into human trials by spring of this year. At the opening bell this morning, Novavax's shares were up by 17% in the wake of his news.  

A warning sign for coronavirus set against a blue sky.

Image source: Getty Images.

So what

Four million dollars isn't a whole lot in the context of developing a vaccine. But it is a step in the right direction. The big picture is that CEPI is clearly interested in Novavax's vaccine platform in the battle against the COVID-19 illness. More grant money, in turn, could be on the way as Novavax's COVID-19 efforts mature. 

Now what

Does this news change Novavax's fundamental outlook? In a word, no. Novavax and the entire field of players attempting to develop a COVID-19 vaccine are likely years away from realizing the fruits of their labor. By then, this deadly respiratory ailment will probably be old news. 

That doesn't mean Novavax's stock isn't worth considering here. The company is only a few weeks away from releasing the top-line results for its highly anticipated flu vaccine, NanoFlu. This vaccine candidate could transform the company into a commercial-stage entity and perhaps even a cash-flow-positive one at that. Still, the chance for another late-stage trial failure remains high. Investors shouldn't buy more than they can afford to lose when it comes to this promising, albeit risky, biotech stock