Novavax to Raise Capital through $200M Stock Offering to Fund COVID-19 Vaccine

American vaccine development company Novavax announced on Monday that it would raise fresh capital through a $200 million preferred stock offering.

The move is to help the company rush to develop a vaccine for the new coronavirus.

Shares of Novavax were up 10.5% on the news.

The private placement to investment fund RA Capital Management was priced at par with Novavax’s Friday closing price. The stock deal is in addition to a $60 million funding from the U.S. Department of Defense to fund the manufacturing of the company’s experimental COVID-19 vaccine.

Novavax began testing its coronavirus vaccine candidate in humans in May, with a target of producing over a billion doses of its vaccine candidate next year.

CEO Stanley Erck said that the biotech’s management team believes the support from RA Capital “signals a high level of confidence in the significant progress of our COVID-19 and influenza vaccine programs.”

“We are extremely pleased to receive this tremendous support from RA Capital, which we believe signals a high level of confidence in the significant progress of our COVID-19 and influenza vaccine programs,” said Erck.

“This additional infusion of capital supplements our strong cash position and the significant funding from CEPI and the U.S. Department of Defense, providing us with the capacity to execute on our critical priority of providing a vaccine against the COVID-19 pandemic as quickly as possible, and to progress NanoFlu to BLA filing.”

“The global vaccine effort is searching for candidates that are capable of both generating the highest neutralizing antibody titers and large-scale production. We are excited to increase our investment in Novavax, which along with resources from CEPI and the U.S. Department of Defense, will support Novavax in its important work developing an effective, scalable vaccine for SARS-CoV-2,” said Peter Kolchinsky, Ph.D., Managing Partner at RA Capital Management.

Disclaimer: We have no position in Novavax, Inc. (Nasdaq:NVAX) and have not been compensated for this article.