Shares of Novavax (NVAX -1.96%) jumped on Tuesday on news of a major supply deal with the Japanese government. By the close of trading, the biotechnology company's stock price was up 7.6%.
Japan's Ministry of Health, Labour, and Welfare will buy 150 million doses of Novavax's COVID-19 vaccine candidate, subject to regulatory approval. The financial terms of the agreement were not disclosed.
Novavax's vaccine is currently undergoing clinical trials in Japan. Meanwhile, quality control issues and other production challenges have forced the company to delay its request for emergency use authorization from the U.S. Food and Drug Administration (FDA) until the fourth quarter.
The delay miffed investors, who were understandably troubled by the potential loss of billions of dollars of COVID-19 vaccine sales that went instead to rival drugmakers. However, Novavax's new deal with Japan suggests that its promising vaccine candidate could enjoy high demand from governments around the world should it receive the necessary regulatory authorizations.