(Reuters) – Novavax Inc said on Monday it would raise fresh capital through a $200 million preferred stock offering as it races to develop a vaccine for the new coronavirus, sending its shares up 10.5%.

The private placement to investment fund RA Capital Management was priced at par with Novavax’s Friday closing price.

The stock deal is in addition to a $60 million funding from the U.S. Department of Defense to fund the manufacturing of the company’s experimental COVID-19 vaccine.

Maryland-based Novavax began testing its coronavirus vaccine candidate in humans in May, with a target of producing over a billion doses of its vaccine candidate next year.

The company had $244.7 million in cash and cash equivalents as of March 31.

Novavax shares were trading at $50.34.

(Reporting by Shivani Singh in Bengaluru; Editing by Shounak Dasgupta)