Drug makers Novavax Inc. and VaxInnate Inc. have won contracts worth a combined $215 million to develop flu vaccines for the U.S. Department of Health and Human Services.
The news sent shares of Novavax up 68 cents, or nearly 26 percent, to $3.19 in after-hours trading.
The goal of the contracts is to make seasonal flu vaccines available more quickly to battle outbreaks and pandemics. Many drug makers have backed out of the vaccine market because of thin profit margins. In the wake of the swine flu pandemic, the World Health Organization has said health authorities need to ramp up the speed and volume of production during the next global outbreak.
"The 2009 H1N1 pandemic demonstrated the need for technologies that can provide vaccines more rapidly," HHS Secretary Kathleen Sebelius said in a statement Monday. "These next-generation flu vaccines hold the potential to be even more effective and to make the first and last doses of vaccine available sooner than existing flu vaccines by weeks and months which can save more lives during a pandemic as well as during seasonal flu outbreaks."
Rockville, Md.-based Novavax Inc. won a contract worth $97 million over three years, with an option to extend the contract for two years for a total value of $179.1 million. Cranbury, N.J.-based VaxInnate Inc. received a three-year contract worth $117.9 million, also with the option to extend it another two years, for a total value of $196.6 million.
Novavax will develop new technology to make vaccines using insect cells. VaxInnate will develop technology that combines influenza and bacteria proteins to stimulate strong immune response against the flu.