What happened

Shares of coronavirus vaccine developer Novavax (NVAX -6.41%) are up 6.7% to $238.56 apiece as of 10:30 a.m. EDT. The stock has gained over 30% in the past five trading days.

On Aug. 4, Novavax announced the European Commission would purchase 100 million doses of its coronavirus vaccine candidate NVX-CoV2373, with an additional option to purchase 100 million doses by the end of 2023. In clinical studies, the vaccine candidate demonstrated 89.7% to 96.4% overall efficacy in immunization, depending on the strain of the coronavirus. 

A healthcare worker puts a bandage on a child's arm.

Image source: Getty Images.

So what

The company desperately needed the good news after a series of corporate and supply chain delays damaged the vaccine candidate's reputation. Last year, the U.S. government gave Novavax a $1.6 billion grant in exchange for 100 million doses of NVX-CoV2373. Delivery is still pending. The U.K. government also ordered 60 million doses of the vaccine candidate in March, but they never arrived. The vaccine candidate is still pending regulatory clearance, such as from the European Medical Agency and the U.S. Food and Drug Administration.

Now what

It seems Novavax's supply chain issues are about to end. The company's manufacturing partner, the Serum Institute of India, commenced production of NVX-CoV2373 in late June. With its capacity, Novavax will be on track to produce 150 million doses of NVX-CoV2373 by the end of the year. The company still has a relatively small market cap ($16.58 billion) compared to its coronavirus vaccine peers like Moderna and BioNTech, so there's a lot of potential for the biotech to grow.