Novavax stock surged over 17% in pre-market trading Monday after the U.S. Food and Drug Administration finally granted long-anticipated approval for its COVID-19 vaccine, Nuvaxovid—though with usage limitations.

The FDA's authorization restricts the vaccine's use to adults over 65 and individuals aged 12 and up who are at heightened risk of severe illness, reflecting cautious optimism from health authorities.

Analysts at Leerink Partners said the decision aligns with expectations and wasn’t more restrictive than anticipated by the CDC’s vaccine advisory group, ACIP.

This approval marks a pivotal moment for Novavax, whose protein-based vaccine differs from the mRNA technology used by dominant players like Pfizer and Moderna. Regulatory delays and production issues had previously sidelined the company during the pandemic’s vaccine boom.

Adding to public skepticism, U.S. Health and Human Services Secretary Robert F. Kennedy Jr., a well-known vaccine critic, publicly questioned the vaccine's effectiveness in a recent CBS interview

Despite the challenges, the FDA’s endorsement has triggered a $175 million milestone payment from Sanofi under a licensing agreement struck for 2024. Novavax plans to begin commercial distribution of the vaccine in the U.S. this fall, in collaboration with Sanofi—pending updated strain recommendations

However, Novavax and its peers will need further FDA clearance to tailor their vaccines to the latest COVID-19 variants. This will be a key topic in an upcoming FDA advisory meeting later this week.

Even with today’s rally, Novavax shares remain down 16.3% year-to-date.