What happened

Shares of Moderna (MRNA -0.15%) climbed 16% on Friday, following reports that the biotech company is negotiating an advanced purchase deal for its experimental COVID-19 vaccine with the European Union.

Moderna's stock, which closed at a record high of $94.85, is now up a stunning 385% so far in 2020.

So what 

The EU is attempting to line up deals with several coronavirus vaccine makers, according to Reuters. Among these companies are Johnson & Johnson (JNJ -0.47%), Sanofi (SNY 0.52%), BioNTech (BNTX -1.05%), and Moderna. "We are in talks with several companies on possible COVID-19 vaccines," an EU spokesperson told Reuters on Friday. 

A person is pointing to an upwardly sloping chart.

Moderna's stock has delivered incredible returns to investors. Image source: Getty Images.

The EU's negotiations are reportedly in more advanced stages with Johnson & Johnson and Sanofi, which could potentially supply its 27 member states with as many as 200 million and 300 million vaccine doses, respectively. Talks with Moderna were said to be ongoing.

Now what 

Governments around the world are racing to lock in deals that could supply their citizens with COVID-19 vaccines, should they prove safe and effective. With COVID-19 case counts rising at an alarming rate in many countries, competition among nations for these potentially life-saving drugs will likely intensify in the months ahead.

It's also unsurprising that the EU would want to strike a deal with Moderna. A recent analysis published in The New England Journal of Medicine showed that Moderna's experimental vaccine helped to produce neutralizing antibodies -- which scientists say could defend against coronavirus infections -- in 100% of its phase 1 study participants. Though more testing is needed, the results are considered notable progress toward the development of a potential COVID-19 vaccine.