What happened

Shares of BioNTech (BNTX 2.87%) were vaulting 10.4% higher as of 3:26 p.m. EDT on Friday. The solid gain came after Reuters reported that the European Union is in discussions with the company along with several other drugmakers to purchase potential COVID-19 vaccines.

So what

Four EU countries reached an agreement with AstraZeneca in June to purchase 400 million doses of its COVID-19 vaccine candidate. However, that volume won't be nearly enough to immunize the wider European population. That's why EU officials are looking to strike upfront deals with other companies that are developing COVID-19 vaccine candidates.

Vials labeled "COVID-19 vaccine" on top of $100 bills

Image source: Getty Images.

BioNTech's inclusion in the group for which negotiations are under way underscores the potential for the COVID-19 vaccine candidates that the German biotech is developing in partnership with Pfizer (PFE 1.25%). Reuters reported that other drugmakers in talks with the EU include Johnson & Johnson, Moderna, Sanofi, and CureVac.

Pfizer and BioNTech announced promising preliminary results from a phase 1 clinical trial of COVID-19 vaccine candidate BNT162b1 on July 1. Earlier this week, the U.S. Food and Drug Administration granted Fast Track designation to two of the four COVID-19 vaccine candidates that Pfizer and BioNTech are testing.

Now what

BioNTech's shares have risen close to 150% so far this year. The biotech stock could go even higher with more positive news. BioNTech and Pfizer hope to begin a phase 2b/3 clinical study soon that will enroll up to 30,000 participants. This study could begin as early as late July if regulatory clearance is secured.