New cases of the coronavirus disease COVID-19 are cropping up all around the world. With thousands of deaths from the disease, drugmakers both big and small are scrambling to develop an effective vaccine.

Moderna (MRNA 0.89%) and Novavax (NVAX -0.95%) stand out as two of the leaders in this race to develop a COVID-19 vaccine. Which of these two coronavirus-focused biotech stocks is the better pick for investors? Here's how Moderna and Novavax stack up against each other. 

Coronavirus vaccine bottles

Image source: Getty Images.

The case for Moderna

Moderna announced on Feb. 24 that its experimental COVID-19 vaccine, mRNA-1273, was available for clinical trials in humans. The National Institute of Allergy and Infectious Diseases (NIAID) already has the first batch of the vaccine, which was produced very rapidly and was funded by the Coalition for Epidemic Preparedness Innovations (CEPI). The phase 1 clinical study of Moderna's COVID-19 vaccine is expected to begin in April.

There are several reasons to be cautiously optimistic about the chances for Moderna's COVID-19 vaccine. The biotech specializes in mRNA vaccines that can mimic natural infections. This enables the vaccines to spur a stronger immune response. Moderna's mRNA-1273 vaccine uses a prefusion stabilized spike (S) protein, an approach that has been used in vaccines for two other coronaviruses, Middle Eastern Respiratory Syndrome (MERS) and Severe Acute Respiratory Syndrome (SARS).

But Moderna's coronavirus program isn't the main attraction for the biotech stock. Moderna's lead candidate is mRNA-1647, an experimental vaccine for the cytomegalovirus (CMV). The company is evaluating the vaccine in a phase 2 clinical study with the first interim results expected in the third quarter of 2020. 

Moderna also claims two other phase 2 programs. It's partnered with Merck on cancer vaccine mRNA-4157 and with AstraZeneca on AZD8601, a regenerative therapeutic targeting coronary artery disease myocardial ischemia.

In addition, Moderna's pipeline includes 12 other clinical programs and nine candidates in preclinical testing. While the company has partnered with Merck and AstraZeneca on a few of these candidates, it owns worldwide rights to most of them. 

The case for Novavax

Novavax is just a little behind Moderna with its COVID-19 vaccine. The biotech announced last week that it's evaluating several nanoparticle-based vaccines and should begin phase 1 testing for the most promising one of them by May or June.

Like Moderna, Novavax is developing a vaccine candidate that is derived from the coronavirus S protein. Unlike Moderna, Novavax plans to use its proprietary Matrix-M adjuvant that the company has used with other experimental vaccines to boost immune responses.

Novavax's most promising pipeline candidate right now, though, is its nanoparticle-based influenza vaccine NanoFlu. The company is evaluating NanoFlu in a phase 3 clinical study and expects to report initial results from this study later this month. Previous clinical studies of the vaccine have demonstrated the potential for NanoFlu to be more effective than current flu vaccines on the market.

The biotech also claims another late-stage candidate, ResVax. Novavax reported disappointing results last year from a phase 3 study of the experimental respiratory syncytial virus (RSV) vaccine in maternal immunization to prevent RSV lower respiratory tract infection (LRTI) in infants. However, those results indicated promise for the vaccine in reducing severe RSV hypoxemia (low concentration of oxygen in the blood) in infants as well as reducing hospitalizations linked to RSV LRTI.  

Novavax's pipeline also includes an experimental Ebola vaccine that had positive results in a phase 1 study. If the late-stage study of NanoFlu is successful, it could bode well for the company's combination influenza/RSV vaccine that hasn't advanced to clinical testing yet.

Better pick

There's no guarantee that Moderna or Novavax will be successful with their respective coronavirus vaccine candidates. Other companies are also developing their own experimental vaccines. My recommendation is to evaluate the companies' overall prospects instead of only looking at the potential for their COVID-19 vaccines.

Moderna definitely has a more robust pipeline than Novavax does. Does that make it the better pick? I don't think so. My view is that Novavax has the edge because it's so close to wrapping up its late-stage testing of NanoFlu. The flu vaccine could flop, of course, but based on previous studies I think it has a good shot at going on to win regulatory approval.

Both of these stocks are very speculative, though. Most investors would probably be best staying away altogether. Only the most aggressive investors should consider buying shares of Novavax (or Moderna) -- and then only in small quantities.