Novavax (NASDAQ:NVAX) is a small-cap biotech company that has been at the forefront of the development of a vaccine for COVID-19. The company's shares are up by a whopping 500% since the beginning of the year, easily outpacing the return of the S&P 500, which is down by 11.5% year to date.

Investors are hopeful that Novavax will make a fortune off its potential vaccine for COVID-19. However, as several other biotech companies are looking to develop vaccines or treatments for COVID-19, betting that Novavax will win that race is a bit speculative at this point. Still, there is another potential catalyst for Novavax on the way, and this arguably makes the company worth a second look. 

Novavax's NanoFlu vaccine could be a significant growth driver 

Novavax focuses on the development of vaccines for infectious diseases. The company does not currently have any products on the market, but one of its lead pipeline candidates is a potential flu vaccine called NanoFlu, which is being developed specifically for adults over the age of 65.

Of course, there are other vaccines for the flu on the market, but Novavax argues that its NanoFlu has a chance to be more effective than some of the current market leaders. For instance, in a clinical trial pitting NanoFlu against Sanofi's (NASDAQ:SNY) flu vaccine Fluzone HD -- which is currently the leading flu vaccine for older adults on the market -- NanoFlu "demonstrated significantly stronger and broader immune responses" against various strains of the flu.

Nurse holding test tube with blood for Coronavirus testing.

Image Source: Getty Images.

Novavax recently reported positive results from a phase 3 clinical trial that tested the safety and immunogenicity (the ability to trigger an immune response in the body) of NanoFlu, and the company is now planning to submit a Biologics License Application (BLA) to the U.S. Food and Drug Administration (FDA) for its potential flu vaccine.

Novavax will seek the accelerated approval designation for NanoFlu; this expedites the FDA's approval process and is typically reserved for products that address an "unmet medical need." If all goes well for Novavax, the NanoFlu vaccine could be approved relatively soon.

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

Novavax, which had prior experience dealing with other strands of coronaviruses, was able to identify an antibody that could be effective against the SARS-CoV-2 virus that causes COVID-19.

According to the company, this vaccine candidate, called NVX-CoV2373, demonstrated high immunogenicity in preclinical trials. Novavax also claimed that NVX-CoV2373 generated effective antibodies against SARS-CoV-2 in preclinical trials. The company is planning to start human clinical trials in mid-May. With that said, Novavax is currently trailing several companies in this race. According to the World Health Organization (WHO), there are about 70 COVID-19 vaccines currently in development, and three of them have already started clinical trials.  

One of these is INO-4800, which is being developed by Inovio Pharmaceuticals (NASDAQ:INO). Inovio kicked off a phase 1 clinical trial for INO-4800 in early April. This trial will include up to 40 healthy adult volunteers who will each receive two doses of the vaccine. The trial will test the safety and immunogenicity of INO-4800. 

With Novavax currently trailing some of its peers in this hunt, investors shouldn't bank on the company making a fortune from its potential COVID-19 vaccine. 

Should you buy? 

Novavax's potential vaccine for the flu looks promising, and its efforts to develop a vaccine for COVID-19 are commendable. But the company's performance year-to-date is unsustainable in the long run.

Novavax's share price will likely decrease significantly -- that is, of course, unless the company manages to beat its peers to the punch and successfully develop a COVID-19 vaccine before any of them, which seems unlikely at this point.

In short, while Novavax may worth considering for investors willing to take a little risk, it'd be best to wait for a much more attractive entry point before even thinking about purchasing shares of this biotech stock