Novavax stock spikes 20% after company snags $350 million from Canada for unused Covid shots

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Canada's Covid shot settlement is a sign of hope for investors after Novavax raised doubts about its ability to stay in business earlier this year.

The settlement is part of an amended Covid shot purchase agreement between Maryland-based Novavax and the Canadian government that the parties first established in January 2021, the company said Friday in aStock Chart IconIt's unclear how many doses of Novavax's jab – its only commercially available product after 35 years – went unused. Under the amended agreement, Novavax will also provide Canada with fewer doses of its vaccine on a revised delivery schedule.

However, Canada can terminate the contract if Novavax fails to receive regulatory approval for vaccine production at the Canadian government's biomanufacturing facility by Dec. 31, 2024, according to the agreement. The announcement is another sign of hope for investors after the cash-strapped company raised doubts about its ability to stay in business earlier this year.

In May, Novavax adopted a more positive outlook and announced a sweeping cost-cutting plan alongside its. The company said it expects 2023 revenue of between $1.4 billion and $1.6 billion. Novavax's stock price jumped around 30% on that news, but Wall Street hasn't entirely bought into the recovery plan: The company's stock price is still down roughly 15% since the start of the year after shedding more than 90% of its value in 2022.

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