The COVID-19 outbreak continues to get worse. More than 70 countries have now seen confirmed cases of the disease. In the U.S., more than a dozen states have had confirmed cases of COVID-19, and more than 10 people have died from it. While many still believe the outbreak is manageable, others are increasingly worried that it will turn into a full-blown pandemic. Amid this frenzy, several biotech companies are looking to develop a vaccine for the SARS-CoV-2 virus, which is the virus that causes the illness COVID-19.

Obviously, the company that manages to develop a vaccine for this potentially deadly virus successfully could reap immense financial benefits. Novavax (NASDAQ:NVAX) -- a clinical-stage vaccine company headquartered in Maryland -- is currently perceived as one of the leaders in the race to come up with a vaccine for the SARS-CoV-2 virus. But despite its attempt to prevent a global pandemic, Novavax remains a risky play.

Hand holding test tube of blood labeled Coronavirus testing

Image source: Getty Images.

Where Novavax stands in the race to develop a vaccine for COVID-19

On Feb. 26, Novavax announced that it was making progress in its attempt to develop a vaccine for COVID-19. More precisely, the company said it was "assessing multiple nanoparticle vaccine candidates in animal models prior to identifying an optimal candidate for human testing." Novavax was able to develop a vaccine rapidly because it had prior experience dealing with other strands of coronavirus, according to its CEO Stanley C. Erck.

Novavax said it was planning on starting the testing phase for its potential vaccine in the spring. Shares of Novavax soared on the news that the company was relatively close to starting clinical trials, indicating that investors had high hopes for the vaccine. 

The field is crowded

Of course, Novavax is by no means the only company looking to develop a vaccine (or a treatment) for COVID-19, nor is it the frontrunner in this race. That title arguably goes to Gilead Sciences (NASDAQ:GILD) whose product -- remdesivir -- was crowned as the most promising potential treatment for COVID-19 by officials at the World Health Organization (WHO). On Feb. 26, Gilead Sciences announced it had initiated two phase 3 clinical studies to investigate the efficacy of remdesivir as a potential treatment for COVID-19.

Elsewhere, Moderna (NASDAQ:MRNA) made quick work of developing a vaccine for COVID-19, and the company announced on Feb. 24 that its potential vaccine for the disease -- mRNA-1273 -- had been shipped to the National Institute of Allergy and Infectious Diseases (NIAID) to start a phase 1 study.

Other companies are also looking to develop vaccines for COVID-19, and investors looking to place their bets on whichever company is the most likely to come out a winner are going back and forth between all of these companies, rendering their stocks volatile. On March 3, shares of Moderna and Novavax sank on the news that Inovio Pharmaceuticals (NASDAQ:INO) was looking to begin clinical trials for its potential vaccine for COVID-19 in April.

Novavax's pipeline

Other than its attempts to find a vaccine for COVID-19, Novavax boasts several interesting products in its pipeline. Most notably, the company recently submitted a potential vaccine for the flu -- dubbed NanoFlu -- to the U.S. Food and Drug Administration (FDA) for review. NanoFlu was developed primarily for adults over the age of 65. The FDA granted NanoFlu the "fast track" designation, which expedites the review process for drugs that fill an "unmet medical need."

Novavax's pipeline also boasts other potential vaccines for the flu, as well as a potential vaccine for Ebola.

A risky play

There are two major reasons why investing in Novavax at this point is risky. First, even assuming that the company manages to develop a vaccine for COVID-19 successfully, it probably won't be the first -- or even the only -- company to accomplish such a feat. Other biotech companies are further ahead in their attempts to prevent a COVID-19 pandemic, and betting that Novavax will come out a winner in this race is wishful thinking, at best. Sure, it could happen, but it isn't likely given what we know so far.

Second, Novavax currently has no approved products on the market, and while its NanoFlu vaccine seems promising -- and will likely receive the green light from the FDA -- this success would hardly make the company's prospects particularly enticing. While investors should keep on monitoring Novavax, there are far more promising biotech stocks to consider buying.