CHICAGO (Reuters) - The U.S. government has awarded Novavax Inc $1.6 billion to cover testing, commercialization and manufacturing of a potential coronavirus vaccine in the United States, with the aim of delivering 100 million doses by January 2021.

Novavax shares jumped 35% in premarket trade.

The award is the biggest yet from “Operation Warp Speed”, the White House program aimed at accelerating access to vaccines and treatments to fight the coronavirus that causes COVID-19.

“What this Warp Speed award does is it pays for production of 100 million doses, which would be delivered starting in the fourth quarter of this year, and may be completed by January or February of next year,” Novavax Chief Executive Stanley Erck told Reuters.

It will also cover the cost of running a large Phase III trial - the final stage of human testing, which could begin as early as October.

The announcement follows a $456 million investment in Johnson & Johnson’s vaccine candidate in March, a $486 million award to Moderna Inc in April, and up to $1.2 billion in support in May for AstraZeneca’s vaccine being developed with Oxford University. The U.S. government also awarded Emergent Biosolutions $628 million to expand domestic manufacturing capacity for a potential coronavirus vaccine and drugs to treat COVID-19.

A safe and effective vaccine is seen as critical to ending a pandemic that has claimed over half a million lives globally, about a quarter of them in the United States.

The Gaithersburg, Maryland-based company is somewhat of a dark horse in the race for a coronavirus vaccine. The company was not on the list of vaccine finalists for Warp Speed reported by the New York Times that included Moderna, AstraZeneca, Pfizer Inc, J&J, and Merck & Co.

In May, Novavax got an additional $388 million in funding for COVID-19 vaccine development from the Coalition for Epidemic Preparedness Innovations (CEPI) after a $4 million investment in March. In June, the U.S. Department of Defense awarded the company $60 million to support manufacturing of 10 million doses of its vaccine in 2020.

‘A BIG SCALE UP’

The company is in the process of transferring its vaccine technology to an unnamed contract manufacturer that has two large manufacturing facilities, the CEO said. That is in addition to the work being done by Emergent Biosolutions, which is making doses to supply the company’s smaller early and midstage clinical trials.

The Novavax vaccine works in conjunction with an adjuvant - a substance that boosts the immune response to help the body build a robust defense against the virus.

Currently, Novavax makes its adjuvant in Sweden. The company is building up U.S. manufacturing capacity for its adjuvant “so that we can make upwards of a billion doses of adjuvant in the United States,” he said.

Novavax did not start human safety trials until late May. One reason for the delay is that the vaccine is grown in insect cells, a process that can take 30 days before company scientists can start purifying it and making it in bulk.

“You lose a month or so there, but I don’t think we’re behind because our data,” he said, referring to animal data showing a strong immune response and high levels of virus-killing antibodies.

Erck said Novavax expects results of its Phase I safety trial within the next week or so. The company aims to start midstage trials in August or September, with Phase III testing starting in October, he added.

By early next year, the company expects to be able to make 50 million doses a month in the United States.

“It’s a big scale up in a few different manufacturing sites in the United States,” Erck said. “What it leaves us with is the capacity of making many more doses in the U.S. in 2021.”

Novavax also has a manufacturing plant in the Czech Republic and hopes to have two other plants in Europe and one in Asia, Erck said. The company is also working with a manufacturer in India. The aim there is to make more than 100 million doses a month, he said.