One of the hottest stocks this week is Novavax (NVAX), which is up 120% at the time of writing, but it had gained as much as 131%at its peak.  

The share price is at $9.90, previously at $4.50 before the jump. What caused this stock to spike this week?

On Friday, the biotechnology company said that it would be partnering with Sanofi, a French drugmaker to manufacture a Covid vaccine. They would work together to make the vaccine commercially available. The vaccine would be split into combination shots that would help fight the flu and the coronavirus.

The agreement states that Novavax will receive $500 million for its initial payment and then another $700 million to develop the vaccine (or as much of that amount as is needed).  

The partnership could include other drugs as well that Novavax would develop under Sanofi’s funding. The agreement even extends to a potential $200 million in addition for reaching specific milestones.

Will This Stock Still Climb?

Novavax was faced with closure just recently. In February 2023, the company said it might have to shut down because of a lack of funding for its drug development efforts. Now, those concerns are gone and the company can focus on what it does best.

With secured funding Novavax should be able to continue operating, but their success will hinge on whether they can develop the drugs they have committed to.

The company may be posting more announcements about its work as it starts to prepare drugs for the market. Those announcements could help spur stock growth in the future, but investors may have to wait months for those developments.

There is great potential for growth with this stock, but it could take a while for that to happen, and we urge caution when investing in Novavax at this time. There may not be this kind of growth again, but it could prove to be a solid stock for the coming years.