Novavax (NASDAQ:NVAX) announced on Thursday evening that the U.S. Department of Defense (DoD) has awarded it a contract to supply a large quantity of its vaccine candidate NVX-CoV2373 to the military. The biotech is currently in the phase 1 stage of clinical trials evaluating the vaccine against SARS-CoV-2, the coronavirus that causes COVID-19

The Department of Defense will provide Novavax up to $60 million to support the domestic manufacture of several components of the experimental COVID-19 vaccine. In return, Novavax will supply 10 million doses of NVX-CoV2373 to the DoD this year. These doses could be used in phase 2/3 clinical trials, but could also be administered to military personnel and their families if the Food and Drug Administration grants the vaccine candidate an Emergency Use Authorization (EUA).

Coronavirus vaccine bottles

Image source: Getty Images.

The contract requires Novavax to work with a U.S.-based biologics contract development manufacturing organization (CDMO) to produce the antigen used in NVX-CoV2373. Novavax will also work with U.S.-based CDMOs to manufacture its proprietary Matrix-M adjuvant, which will be administered with NVX-CoV2373. Adjuvants are additives designed to enhance vaccines' effectiveness by increasing the immune response they generate.

Novavax initiated a phase 1 clinical study of NVX-CoV2373 on May 26. The biotech anticipates reporting preliminary results from this study in July. If those results are positive, Novavax intends to quickly advance the COVID-19 vaccine candidate into phase 2 testing.