Shares of Novavax (NVAX) soared after the company said on Tuesday morning that it has received $1.6B in funding from the federal government's accelerated COVID-19 vaccine development program. The company has been selected to participate in Operation Warp Speed, which aims to begin delivering millions of doses of a safe, effective vaccine for COVID-19 in 2021.

The company said the funds will be used to complete late-stage clinical development of its vaccine candidate called NVX-CoV2373, including a Phase 3 trial, and to scale up manufacturing. The company is aiming to deliver 100 million doses of the vaccine, as early as late 2020, it said. The agreement will fund the late-stage clinical studies necessary to determine the safety and efficacy of NVX-CoV2373, including a pivotal Phase 3 clinical trial with up to 30,000 subjects beginning in the fall of 2020. A Phase 1/2 clinical trial of NVX-CoV2373 in 130 healthy participants 18 to 59 years of age was launched in Australia in May, Novovax said, adding that preliminary immunogenicity and safety results are expected at the end of July, and the Phase 2 portion to assess immunity, safety, and COVID-19 disease reduction is expected to begin after that.

The Phase 1/2 trial is being supported by up to $388M in funding from the Oslo-based Coalition for Epidemic Preparedness Innovations Novovax President and CEO Stanley Erck said in a statement that "The pandemic has caused an unprecedented public health crisis, making it more important than ever that industry, government and funding entities join forces to defeat the novel coronavirus together. We are honored to partner with Operation Warp Speed to move our vaccine candidate forward with extraordinary urgency in the quest to provide vital protection to our nation's population."

In pre-market trading, Novovax has surged $28.56, or 36%, to $108 per share.