In late February, as the coronavirus spread around the world, Dr. Richard Hatchett, head of an international nonprofit that gives money to vaccine developers, got on an important call to discuss vaccine candidates after his plane touched down at London’s Heathrow Airport.

Executives from the Bill & Melinda Gates Foundation, which helped found and finance the nonprofit, were on the line, enthusiastic about Novavax, a small biotech company they thought had the potential to develop a vaccine against the virus — fast.

Although the company, based in Gaithersburg, Maryland, had never brought a vaccine to market in its 33-year history, these experts were optimistic about its technology, which uses moth cells to pump out crucial molecules at a much faster rate than typical vaccines — a major advantage in a pandemic.

Hatchett’s organization, the Coalition for Epidemic Preparedness Innovations, would go on to invest $388 million in the company’s coronavirus vaccine. With that powerful backing, Novavax made an aggressive push to the U.S. government. The company’s effort paid off last week when Operation Warp Speed, the Trump administration’s effort to hurry coronavirus vaccines to the market, gave Novavax $1.6 billion, the largest award to date. The company’s stock surged 30%.

It was a dramatic turnaround for a little-known company that, just one year earlier, had been on the verge of collapse. One of its leading vaccine candidates — to prevent a deadly virus in infants — had failed for the second time in three years. The company’s stock was trading so low that it risked being removed from the Nasdaq. Looking for cash, it sold its manufacturing facilities. Word spread around the small world of Maryland biotech that Novavax might be closing soon.

Novavax’s good fortune may appear puzzling, given its track record and the air of secrecy surrounding Operation Warp Speed. But for those in the insular biotech world where connections matter, it is far less surprising. In the face of a deadly pandemic that is devastating the economy, the government is placing huge bets on vaccines and treatments that could enable a return to some semblance of normal life.


The Trump administration has said it wants to invest in a variety of vaccine technologies, and Novavax — which uses coronavirus proteins to provoke an immune response — offers an approach that is distinct from those of other companies that have already received major federal backing. Its method’s potential to quickly manufacture millions of doses was also attractive to the federal government and Hatchett’s organization. The success this spring of a clinical trial of Novavax’s flu vaccine boosted confidence in the company.

“When the need is great, you have to be willing to take financial risks,” said Hatchett.

But skeptics see Novavax as a classic example of a second-tier player that has survived by limping from crisis to crisis, boosting its stock by promising vaccines for new outbreaks, yet never delivering. In its three decades in business, with a mix of public and private investment, it has developed experimental vaccines for viruses like the ones that cause severe acute respiratory syndrome (or SARS), Middle East respiratory syndrome (or MERS) and Ebola that never made it past early safety studies. It’s telling, critics say, that even as it has received growing amounts of government and philanthropic support, the company’s coronavirus vaccine effort has not attracted any deals with major drugmakers.

“The market wants to believe in fairy tales,” said David Maris, managing partner of Phalanx Investment Partners and a longtime analyst covering the pharmaceutical industry. He said investors wanted to believe that — like Cinderella — the companies that couldn’t go to the ball would eventually win the prince.

“It sometimes happens,” he said. “Usually it doesn’t.”

So far, the federal government has promised nearly $4 billion to six vaccine projects, but many aspects of the deals are confidential. The Trump administration has only released heavily redacted copies of its contracts with these companies.

When asked this week why Novavax has received more than anyone else, a Trump administration official said that smaller companies needed more federal investment in manufacturing compared to large pharmaceutical firms, which have an established track record for mass-producing vaccines. The $1.6 billion comes from the Department of Health and Human Services and the Defense Department and will be used to help develop and manufacture Novavax’s vaccine.


In pursuing its contracts, Novavax drew on influential ties it had cultivated in the federal government and close-knit global health community, according to interviews with current and former company executives, federal and global health officials, vaccine experts and investment analysts.

The Biomedical Advanced Research and Development Authority, or BARDA, which makes deals with drug manufacturers during public health emergencies and is one of the federal agencies carrying out Operation Warp Speed, has been headed by two former Novavax executives. One of them would later complain that the company crossed ethical lines when it approached him about receiving funding this spring.

Novavax also tapped into a long-standing relationship with the Gates Foundation, which had previously provided it with funding and is one of the most powerful global players in the vaccine world.

John Trizzino, Novavax’s chief business and financial officer, said the company did nothing inappropriate but acknowledged that it used its connections to help win the deals. “This doesn’t happen by itself,” he said. “This happens through years and years of working within the industry, building solid relationships, having worked with many of these partners.”

If Novavax does succeed, it will represent a major success story for a company that has struggled for years. Founded in 1987, the company has operated on the outskirts of the industry, far from the biotech hubs of Boston and San Diego. Although vaccines have been its main focus, Novavax has over the years dabbled in other businesses, like prenatal vitamins and estrogen lotion.

In 2016, the company suffered a major setback when its late-stage clinical trial to treat respiratory syncytial virus, or RSV, in older people failed, and the company laid off one-third of its staff.


A review in 2017 from an employee on the website Glassdoor summed up the atmosphere. “Bowling on Fridays, unlimited sick days,” the person wrote under “pros.” Under “cons,” the person wrote, “The management rushed clinical trials for RSV, clinical trials failed, and layoffs insued [sic].”

But Novavax was able to pursue a second clinical trial of the RSV vaccine with assistance from the Gates Foundation, which granted the company up to $89 million. That study tested whether giving the vaccine to pregnant women would pass the immunity to their newborns, who can become very sick from the virus.

But that trial failed too, and the company again found itself in a financial crisis. It initiated a reverse stock split to lift its share price and avoid delisting from the Nasdaq, and it sold its manufacturing facilities to another company, Catalent, for $18 million. The deal included 100 workers, or about one-third of its workforce at the time.

Trizzino said it was all part of the business.

“It’s biotech, and biotech can be a bit of a roller-coaster ride,” he said. “We’re innovators, and we’re looking for opportunities that other companies haven’t developed.”

He said working with the Gates Foundation on the RSV vaccine cemented that relationship. “They became very familiar with our technology,” Trizzino said. “So when coronavirus reared its head, they were supportive.”

The foundation declined to discuss details of vaccine candidates, but in a statement, Emilio Emini, its HIV program director, said, “We see promise in a range of COVID-19 vaccine candidates, including Novavax’s approach.”


Like dozens of other companies, Novavax began working on a coronavirus vaccine in January, when the virus’s genome was first made public, using the same technology as it had for its RSV and flu vaccines.

It makes vaccines by turning moth cells into tiny factories that pump out proteins of the coronavirus — a quicker way to make large quantities than using cells from hamsters and other mammals.

“I like the company. I like the technology,” said Dr. Luciana Borio, who oversaw public health preparedness for the National Security Council under President Donald Trump and was the acting chief scientist at the Food and Drug Administration under President Barack Obama. French drugmaker Sanofi is developing a coronavirus vaccine that uses an insect technology similar to Novavax’s, but has not entered clinical trials.

By February, Hatchett’s nonprofit, CEPI, was flooded with proposals for vaccine development efforts. Eager to move quickly, the organization evaluated candidates based on whether the vaccines could be developed rapidly and manufactured in large enough quantities to be distributed across the world.

Like the Gates Foundation, Hatchett was already familiar with Novavax’s work. He had worked at BARDA when the agency awarded a $179 million contract to Novavax in 2011 to develop its flu vaccine, which could allow for a rapid national response to a pandemic flu.

When looking for investments in coronavirus vaccines, “they were a natural consideration,” Hatchett said.


CEPI will not release any of its contracts. Hatchett said its funding decisions are based on independent external reviews, a scientific advisory committee and financial vetting by accounting firm KPMG.

He said his organization took note in March when, weeks after it awarded Novavax its initial $4 million contract, the company announced that its flu vaccine had succeeded in a late-stage clinical trial — its first major success and an important validation of its underlying vaccine technology.

“We were very relieved when that positive result came back,” Hatchett said. In May, his organization ramped up its support with an additional deal awarding Novavax up to $384 million.

For Novavax, the contracts with CEPI proved crucial. Until then, the company had been aggressively seeking funding from BARDA, without much luck.

In April, eager to pitch the company’s vaccine, Novavax’s chief executive asked to speak with Rick Bright, the former director of BARDA, who served as head of vaccine research at Novavax from 2006 to 2008, according to a whistleblower complaint that Bright later filed.

Bright said in the complaint that he declined the meeting with the chief executive, Stanley Erck, because discussing the vaccine while the company’s application was being considered would violate federal law, given that it could influence what is supposed to be a purely scientific review.


But three days later, the company pursued a meeting instead with Bright’s boss, Dr. Robert Kadlec, HHS’ assistant secretary for preparedness and response. Kadlec initially wrote that he was “looking forward” to the meeting, according to emails obtained by The New York Times, but an HHS spokeswoman said that he did not meet with the company.

Bright was removed from his BARDA post in April and filed the complaint after he said he had been protesting “cronyism” and contract abuse for years.

Novavax’s contact with HHS raised alarms with Steven Schooner, a law professor at George Washington University Law School who is an expert in federal procurement.

“When you’re dealing with something as important as a vaccine for a pandemic, you want that review to be made on the scientific merits, not based on who knew who or who is willing to pay a bribe or who applied leverage during the evaluation process,” he said.

Trizzino said the company did nothing wrong. “We did what we thought was prudent and reasonable under the circumstances of a pandemic and the need to move very quickly,” he said.

When the conversation with BARDA never materialized, the company shifted its attention to the Defense Department.


With the second CEPI contract in hand, Novavax was finally able to “get more and more traction,” Trizzino said.

In June, the department awarded the company $60 million. “And ultimately, Operation Warp Speed took over from there,” he said.

“They have shown very encouraging and promising results,” said Robin Robinson, who was the head of Novavax’s vaccine division until 2004, when he left to become the head of BARDA’s influenza division and then its director.

Robinson helped develop an earlier version of the company’s vaccine technology and consulted for Novavax on their flu vaccine. “I do expect the vaccine to be one of the ones in the winner’s circle next year.”

With two major contracts, Novavax must now balance two powerful — and potentially competing — investors. The company’s vaccine is now in safety trials, and results are expected this month. It plans to begin so-called phase three efficacy trials by the fall and could release data by the end of the year. If the vaccine is successful, the company has promised to supply the United States with 100 million doses — or enough to immunize at least 50 million U.S. residents. And through its deal with CEPI, it has pledged an unspecified number of doses to low-income countries.

Novavax has said that it can accomplish both by simultaneously manufacturing the vaccine in the United States, Europe and Asia. The company used an outside manufacturer, Maryland-based Emergent BioSolutions, to make initial doses for the clinical trials but said that they had not yet selected a company to do large-scale manufacturing in the United States. It recently acquired a factory in the Czech Republic and will hire other manufacturers to supply the rest of the world. With those new factory workers, the company said it now employs about 360 people.


“It’s very well coordinated, and we know what we’re doing,” Trizzino said.

But because vaccine development is so unpredictable, and with these deals largely unfolding in private, it’s impossible to know how far the company will get.

“The U.S. darling of the moment is Novavax,” said Kate Elder, a senior vaccines policy adviser for Doctors Without Borders. “But I see this as just a further diversification of the U.S.’ risky bets with public money and little transparency.”