What happened

Shares of Moderna (MRNA -1.75%) jumped 6.3% higher as of the market close on Tuesday. The solid gain came after the company announced that the European Commission (EC) has agreed to buy an additional 150 million doses of its COVID-19 vaccine, bringing the total number of doses ordered by the EC to 460 million.

So what

Moderna announced an even bigger purchase last week with the U.S. government signing an agreement to buy 200 million additional doses of the company's COVID-19 vaccine. However, investors didn't respond enthusiastically to that deal, with the biotech stock slipping a little. So why did Moderna's shares take off on today's news?

European Union flag with a hand holding a syringe with a needle in front of the flag.

Image source: Getty Images.

There were some other factors going on last week that distracted investors somewhat from focusing on Moderna's good news. That's not the case this week.

Moderna stated that the European Commission could use the extra doses for primary vaccination of individuals, including kids. It could also use the doses for booster shots if required.

Now what

The key thing to watch with Moderna now is the progress of its COVID-19 vaccine candidate that specifically targets coronavirus variants. The European Commission will be able to purchase this revised vaccine pending regulatory authorization, with delivery potentially beginning in 2022.