Shares of Novavax (NVAX -5.56%) were rising 3.4% higher as of noon EDT Monday after jumping as much as 5.7% earlier in the day. The bump appeared to stem from Novavax's announcement on Saturday that it signed a memorandum of understanding (MoU) to "explore the expansion of COVID-19 vaccine activities in South Korea."
This MoU was signed by Novavax, the Ministry of Health and Welfare of Korea (MOHW), and SK Bioscience. Novavax and SK are already working together to target the South Korean market with Novavax's COVID-19 vaccine candidate, NVX-CoV2373. The new MoU focuses on the potential development of COVID-19 variant vaccines and/or a combo flu/COVID-19 vaccine.
Why didn't the biotech stock move even higher on this news? Probably because of the somewhat tentative nature of the MoU. First of all, an MoU isn't an ironclad contract between parties. Novavax stated that the MoU was non-binding. There were also some relatively wishy-washy words used -- for example, Novavax and SK bioscience agreed to "potentially explore" developing new vaccine products.
Nonetheless, it's good news for Novavax that its opportunities in South Korea might expand. The signing ceremony for the MoU held over the weekend underscores that Novavax and SK bioscience are in a position to be major players in the country's COVID-19 vaccine market.
The big hurdle for Novavax is still to secure authorization for NVX-CoV2373. SK Bioscience began a rolling submission for the experimental vaccine to South Korean regulators in April. Novavax recently announced that it plans to file for Emergency Use Authorizations in the U.S., U.K., and Europe in the third quarter of this year.