Novavax (NASDAQ:NVAX) announced on Monday that it plans to raise around $200 million through a private placement with RA Capital Management. An investment fund affiliated with RA Capital will purchase a quantity of Series A Convertible preferred stock from Novavax that is convertible into 4,388,852 shares of common stock.
The biotech intends to use the additional capital to help fund its development of a COVID-19 vaccine candidate and to advance its U.S. regulatory filing for approval of flu vaccine NanoFlu. CEO Stanley C. Erck stated that Novavax believes that the RA Capital transaction "signals a high level of confidence in the significant progress of our COVID-19 and influenza vaccine programs."
RA Capital Management Managing Partner Peter Kolchinsky supported Erck's take, and particularly noted that the investment "will support Novavax in its important work developing an effective, scalable vaccine for SARS-CoV-2."
The private placement will bolster Novavax's cash position, which as of March 31 was $244.7 million, including cash, cash equivalents, marketable securities, and restricted cash. In May, the company announced that it will receive up to $384 million in additional funding from the Coalition for Epidemic Preparedness Innovations (CEPI) to develop and manufacture its COVID-19 vaccine candidate. Novavax has already used some of its cash to acquire Czech-based Praha Vaccines to boost its COVID-19 vaccine manufacturing capacity.