What happened

Shares of the clinical-stage vaccine maker Novavax (NASDAQ:NVAX) gained 48.4% in 2018, according to data from S&P Global Market Intelligence. It's nearly time to find out if its vaccine works, and for better or worse, investors are increasingly enthusiastic.

So what 

Respiratory syncytial virus (RSV) feels like a cold for most people, but it frequently sends infants and older adults to the hospital or worse. Novavax's lead candidate, ResVax, succeeded in a mid-stage study with 1,600 older adults in 2015, and investors are increasingly hopeful a large pivotal trial with expectant mothers will produce winning data.

Guy in a suit drawing an upward sloping chart with his finger.

Image source: Getty Images.

Despite decades of effort, RSV continues to frustrate drug developers of all sizes. As the first vaccination option for infants, ResVax could begin adding $1 billion annually to Novavax's top line in a few short years. 

Now what

There have been 3,000 infants born to mothers receiving ResVax, and we'll know how they fared versus the placebo group when the company presents the results before the end of the first quarter. 

Before chasing this stock higher, investors need to remember this vaccine failed to prevent older adults from catching RSV in 2016. Novavax blamed an unusually weak RSV season for the last pivotal trial flop. The latest RSV season was a strong one, so the market won't show any mercy if this attempt to salvage the ResVax program fails. 

Novavax recently reported positive data for a new seasonal flu virus, NanoFlu. The company intends to begin a phase 3 study in the fourth quarter that it won't have any cash to pay for if ResVax flops. The company finished September with $127 million in cash and securities after burning through $135.4 million during the first nine months of 2018.

There's a chance Novavax could shoot up in the weeks ahead, but it just isn't worth the risk.

Check out the latest Novavax earnings call transcript.

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.