What happened

Shares of Novavax, Inc. (NASDAQ:NVAX) are soaring today, up 14.2% as of 11:21 a.m. EDT, following the biotech's announcement of its second-quarter results after the market closed on Wednesday. Novavax's financial numbers weren't the cause of investors' celebration, though. Instead, the major news related to the company's updates on its ResVax and NanoFlu vaccine programs.

Novavax announced that 4,636 pregnant women were enrolled in its phase 3 clinical study of ResVax as of May 2018, with at least 3,000 of the women receiving ResVax. The company also said that the U.S. Food and Drug Administration (FDA) would allow the efficacy analysis of ResVax planned for the first quarter of 2019 to be used to support a future Biologics License Application (BLA). In addition, Novavax stated that the FDA agreed that an accelerated approval pathway for seasonal influenza vaccines could be available for its experimental nanoparticle-based flu vaccine, NanoFlu. 

Female healthcare professional holding syringe and vaccine bottle

Image source: Getty Images.

So what

Novavax's ResVax update was the most important catalyst for the stock on Thursday. ResVax is the biotech's experimental respiratory syncytial virus (RSV) vaccine. Novavax is evaluating the vaccine in a phase 3 clinical study for protecting infants from RSV via maternal immunization. 

Reaching at least 3,000 patients receiving ResVax in the study was a big deal for Novavax. It means that the company has met the FDA's threshold for safety. That milestone paved the way for the FDA's agreement that the efficacy analysis to be conducted in Q1 of 2019 can be used as the basis for a regulatory submission. 

This is great news for Novavax. The company originally expected the 2019 Q1 efficacy analysis would be an interim analysis but now it will be the final analysis. As a result, the biotech should be on track to file for FDA approval of ResVax in the first quarter of 2020 if all goes well. Novavax plans to submit for approval in Europe around the same time.

Novavax might also be able to file for approval for NanoFlu in 2020, assuming there aren't any showstoppers in clinical testing. The company expects to announce results from a phase 2 study in Q1 of 2019 and potentially begin a pivotal phase 3 study in the second half of next year.

The FDA's agreement that the accelerated approval pathway for seasonal influenza vaccines could be available for NanoFlu means that Novavax's phase 3 study will only have to compare immunogenicity for its vaccine against an already approved flu vaccine. That should be great for the company because comparisons between NanoFlu and other flu vaccines have been very positive so far.  

Now what

Novavax's pipeline updates were encouraging. However, there's still a long way to go -- especially for NanoFlu. While ResVax is farther along in the development process, the vaccine has already disappointed in an earlier phase 3 study for immunization of older adults.

There's also the possibility that Novavax will have to raise more cash via a dilution-causing stock offering. The company reported $178.2 million in cash, cash equivalents, marketable securities, and restricted cash at the end of the second quarter, but that's probably only enough to fund operations into the second half of 2019.

Still, I think Novavax stock presents an intriguing opportunity for aggressive investors. There's a lot of risk with this stock, but I like the biotech's risk-reward profile.

Keith Speights has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.