Moderna (MRNA 1.58%) ranks as one of the most talked-about biotechs around. Its rapid progress in developing a coronavirus vaccine candidate catapulted the company into the national spotlight earlier this year. Moderna now stands as one of only a handful of drugmakers with experimental coronavirus vaccines in late-stage testing. 

But there's another coronavirus vaccine stock that investors should really be watching right now. Forget Moderna. Here's why you'll want to keep your eyes on Novavax (NVAX 2.31%).

Scientist holding a vial labeled COVID-19 vaccine.

Image source: Getty Images.

Novavax's Cinderella story

Novavax exited 2019 banged up quite a bit. The biotech stock plunged nearly 90% last year after announcing its second flop for respiratory syncytial virus (RSV) vaccine candidate ResVax in a late-stage study. 

However, the company hoped that another pipeline candidate could help it rise from the ashes. In January of 2019, Novavax reported encouraging results from a phase 2 study evaluating nanoparticle-based influenza vaccine NanoFlu. The biotech initiated a phase 3 study of NanoFlu last October.

That late-stage study went about as well as Novavax could have dreamed. In March 2020, the company reported overwhelmingly positive results in a head-to-head matchup between NanoFlu and Sanofi's successful flu vaccine Fluzone Quadrivalent.

Novavax plans to pursue an accelerated approval path from the Food and Drug Administration for NanoFlu. CEO Stan Erck said in the company's first-quarter conference call in May that Novavax believes its vaccine will be "a game-changer for the prevention of influenza."

An even bigger potential game-changer, though, could be Novavax's COVID-19 vaccine candidate, NVX‑CoV2373. The biotech announced positive results from the phase 1 portion of a phase 1/2 study of the experimental vaccine on Aug. 4, 2020. Those results were so good that some analysts view NVX‑CoV2373 as potentially best in class.

Tale of the tape

Moderna stock has certainly been a big winner so far this year. However, it doesn't hold a candle to Novavax. The biotech stock is up a whopping 3,600%. That's an astounding increase and more than 14 times greater than Moderna's year-to-date gain.

NVAX Chart

NVAX data by YCharts

Novavax's performance has been so impressive that the above chart hides the fact that its shares rose nearly as much by the end of March as Moderna's shares have gained as of now. Much of investors' excitement in the first quarter stemmed from the optimism about NanoFlu. Novavax didn't begin its phase 1 testing of NVX‑CoV2373 until late May.

However, there's no question that Novavax's COVID-19 vaccine candidate has fueled the stock's meteoric rise over the last three months. Every positive development along the way related to the company's coronavirus program served as an additional catalyst driving its share price higher.

One key advantage over Moderna

Moderna enjoys a clear head start over Novavax in terms of clinical progress for their respective COVID-19 vaccine candidates. Novavax started a phase 2b clinical trial of NVX‑CoV2373 earlier this week, while Moderna initiated a late-stage study of mRNA-1273 on July 27.

Thanks to its recent $1.5 billion supply agreement with the U.S. government, Moderna has also pulled ahead of Novavax in the amount of funding secured for its coronavirus program. Novavax has lined up more than $2 billion for NVX‑CoV2373, while Moderna has raised commitments for funding of up to nearly $2.5 billion.

However, Novavax has one key advantage over Moderna that investors should especially appreciate. Even after the huge gain so far this year, Novavax's market cap stands at around $9 billion. Moderna's market cap is nearly three times greater.

Both Moderna and Novavax should be big winners if their COVID-19 vaccines are successful. But Novavax also claims promising potential for NanoFlu, and its stock's valuation is much more attractive than Moderna's. I don't expect Novavax will stand in Moderna's shadow for much longer.