What happened

Novavax (NVAX -2.51%) shares were down more than 16% in late-afternoon trading. The stock closed on Monday at $18.95, then opened on Tuesday at $18.71. In the late afternoon, the stock had fallen to a low of $16.49. It has a 52-week low of $16 and a 52-week high of $236.60. So far this year, the stock is down more than 88%.

So what

On Tuesday, a dispute between the biotech maker of vaccines to treat infectious diseases and global nonprofit Gavi sent Novavax's shares dropping. On Monday, Novavax canceled its contract with Gavi, saying the nonprofit had breached an agreement to purchase, in advance, 350 million doses of Nuvaxovid, Novavax's COVID-19 vaccine. 

The company had received a nonrefundable advance payment of $350 million in 2021 from Gavi. When the World Health Organization (WHO) gave the vaccine an emergency use listing, Gavi paid an additional $350 million to Novavax earlier this year. Gavi, on Tuesday, said Novavax never supplied the doses of the vaccine stipulated in the contract, and it was attempting to recover its advance payments.

Now what

Regardless of what happened, the dispute is not a good look for Novavax, which is coming off a third-quarter report that saw a big revenue gain but continued losses. In the quarter, the biotech reported $735 in revenue, up 311%, year over year. It lost $169 million, but that was still an improvement from its $322 million loss in Q3 2021. The company is facing reduced demand for its vaccine as are makers of other COVID-19 vaccines, and that is investors' biggest concern. The addition of a dispute with Gavi doesn't allay those worries.