Shares of Novavax, Inc. NVAX were up 6.2% on Monday after the company announced that it has initiated a phase IIb study to evaluate the efficacy of its COVID-19 vaccine candidate NVX-CoV2373 in South Africa. The mid-stage study is being conducted in collaboration with Professor Shabir Madhi, who is leading the clinical analysis and Wits University.

The study is being supported by a $15-million grant from the Bill & Melinda Gates Foundation. Notably, the Coalition for Epidemic Preparedness Innovations (CEPI) is funding the manufacturing of NVX-CoV2373 doses for the above-mentioned clinical study.

Novavax’s stock has skyrocketed 3807.8% so far this year compared with the industry’s increase of 2.6%.

The placebo-controlled phase IIb study will have two cohorts wherein one will evaluate the efficacy, safety and immunogenicity in around 2,665 healthy adults while the second will be conducted in approximately 240 medically stable, HIV-positive adult patients.

Upon its potential approval in South Africa, the COVID-19 vaccine will be made available in the country through Novavax’s collaboration with the Serum Institute of India. In August, Novavax entered into a license agreement with Serum Institute of India Private Limited for the development and commercialization of NVX-CoV2373 in low- and middle-income countries (LMIC) apart from India.

We note that NVX-CoV2373 includes Novavax’s proprietary Matrix-M adjuvant to improve immune responses and stimulate high levels of neutralizing antibodies. The company initiated a phase I/II study on the candidate in May. In August, it released encouraging results on the first human trial of its COVID-19 vaccine candidate. The clinical trial data showed that the vaccine was generally well-tolerated and elicited robust antibody responses, numerically superior to what was seen in human convalescent sera (antibodies derived from blood donated by people who recovered from the illness).

Novavax submitted the above study outcomes to the FDA and an independent safety monitoring committee. The company plans to begin the phase II portion of this study in the United States and Australia shortly.

We remind investors that Novavax received a total of worth $2-billion funding, roughly divided into the U.S. Department of Defense’s aid of $60 million, the CEPI’s $388 million donation and the U.S. government’s OWS grant of $1.6 billion for developing NVX-CoV2373.

Significantly, all the above entities are financing several biotechs and large pharma companies including AstraZeneca AZN, Sanofi SNY, Moderna MRNA, Inovio Pharmaceuticals and many universities to accelerate the development of vaccines against COVID-19.

Meanwhile, last week, Novavax signed a Heads of Terms (Term Sheet) with the Government of the United Kingdom, which is looking to purchase 60 million doses of its COVID-19 vaccine candidate NVX-CoV2373. The company will also collaborate with the UK government for a phase III study, which will evaluate the efficacy of the vaccine in the country’s population. The study will commence in the third quarter of 2020.

Zacks Rank

Novavax currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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