What happened

Shares of Novavax (NASDAQ:NVAX), a clinical-stage small-cap biotech company focused on the development of recombinant nanoparticle vaccines, surged by 25% during the month of November, according to data from S&P Global Market Intelligence. The reasoning for the move appears to be traceable to two catalysts.

So what

Firstly, Novavax wound up reporting its fiscal third-quarter operating results toward the beginning of the month, and there were plenty of figures that encouraged long-term investors. Despite reporting a $44.6 million net loss for the third quarter, or $0.15 a share, this was $0.01 per share narrower than expected, and down considerably from the $66.3 million ($0.24 per share) it had lost in the year-ago period. Research and development costs tumbled 21%, while revenue surged 158% to $8.9 million under, which is derived from an existing $89 million grant. Since Novavax has no approved products, it relies on its cash on hand to keep the lights on. Smaller quarterly losses mean less in the way of cash burn, easing tensions a bit for skittish investors.

A doctor administering a flu vaccine to an elderly patient.

Image source: Getty Images.

The other catalyst, which was touted in the company's third-quarter operating press release, but has been ongoing for some time, is the expectation of a topline readout in its phase 1/2 clinical trial involving NanoFlu before the end of the year. For those who may not recall, in August, Novavax announced that NanoFlu produced superior results in preclinical trials involving ferrets with regard to hemagglutinin antigen (HA) inhibition (HA is found on the surface of the flu virus) relative to Sanofi's (NASDAQ:SNY) Fluzone and Fluzone HD. As a reminder, Fluzone is the top-selling influenza vaccine by a mile. Therefore there's a lot of excitement that Novavax might have a winner on its hands.

Now what

However, we have been here before with Novavax, and it didn't end well. At one time the company's RSV F vaccine for respiratory syncytial virus (RSV) in older adults was expected to become the company's ticket to long-term profits. What it wound up doing was failing miserably in phase 3 clinical studies, cratering the stock's valuation. Though Novavax is once again proceeding with a new RSF V study in older patients, it's NanoFlu that has the full and undivided attention of investors.

If the company can successfully deliver topline data before the end of the year, and it's just as encouraging as it was in preclinical studies (ferrets have similar immune reactions to humans with regard to the flu), there's a decent chance that Novavax could begin enrolling for a pivotal-stage trial before the end of 2018. Remember, we're talking about a company that's relying on its cash on hand to keep the lights on, therefore a potentially accelerated approval timeline would be great news.

For the time being though, considering its history of failing to deliver, I'm in the wait-and-see camp.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.