Key Points

  • This biotech company stands out with its plan for post-pandemic prevention.
  • It could lead when it comes to production capacity and logistics.
  • Management expects to report interim phase 3 data for its coronavirus vaccine candidate early next year.

Our experts issued a rare "Double Down" Buy alert on this one stock... Learn more.


Right now, Robinhood investors making bets on the coronavirus vaccine race are favoring shares of two of the apparent leaders: Moderna (NASDAQ:MRNA) and Pfizer (NYSE:PFE). They're among the Top 100 most commonly held investments in the portfolios of those using the online trading platform.

Robinhood investors are known for their tendency to seek out stocks with the potential for big movements -- and coronavirus stocks often deliver. Just this week, Moderna and Pfizer each gained more than 7% in one trading session after the latter reported positive interim efficacy results from the phase 3 trial of its COVID-19 vaccine candidate.

But there's a name with big potential that is missing from Robinhood's Top 100 list: Novavax (NASDAQ:NVAX). Sure, the company lags behind Moderna and Pfizer from a timeline perspective. But there are other factors that put it in a strong position to become a market leader if its phase 3 clinical trial results are positive.

A young investor looks at his computer and considers stocks to buy.

Image source: Getty Images.

As with Moderna's and Pfizer's candidates, the initial data on Novavax's potential vaccine was encouraging. In its phase 1 study, participants ages 18 through 59 produced neutralizing antibody levels 4 to 6 times higher than those found in recovered coronavirus patients. Neutralizing antibodies are important because their role is to block infection. Novavax hasn't yet reported data on older age groups, but we should have more information on vaccine performance in a broader age range soon -- the company expects interim data from its U.K. phase 3 trial, which included participants as old as 84, in the early part of the first quarter (which ends in May). Since we still are waiting for information about how its candidate fares in the elderly cohort, we can say that from an early data perspective, Novavax's results are almost on par with those of its rivals whose programs are further advanced.

A plan for the future

There are three areas where Novavax stands out when compared to rivals, though. The first has to do with its plan for the future.

Novavax aims to capitalize on its expertise in flu prevention to explore a combined flu/COVID-19 vaccine. The company's NanoFlu vaccine candidate met its primary endpoints in a pivotal trial this year, so the next step on that front will be to submit applications to regulators for approval. But the company has already created a team to study the combination of NanoFlu with its coronavirus vaccine candidate.

Any potential dual vaccine of this type would be for use after the pandemic. Considering the depth of the current health crisis, it's likely countries and populations will want to keep up their efforts to protect themselves well into the future. So developing a product designed to help prevent further outbreaks after the pandemic is brought under control is smart. It's also smart to aim for a combination vaccine. After all, who likes shots? Combining two in one would be popular. It also could streamline transport and storage, resulting in lower costs.

More than 2 billion doses

Another area where Novavax shines is production capacity. Considering the size of the demand for a vaccine, every dose that can be manufactured will be welcome. But those companies that are able to make their vaccines in the largest quantities certainly will have the potential to capture more of the available market. Novavax expects to have sufficient capacity online by the middle of 2021 to produce more than 2 billion vaccine doses annually. By comparison, Pfizer aims to produce 1.3 billion doses as of the end of next year. And Moderna's goal is to be able to deliver between 500 million and 1 billion next year.

And finally, Novavax may benefit from a logistics factor. Its vaccine can be stored at between about 35 and 46 degrees Fahrenheit. That's common fall or winter weather for many of us, and it means that the vaccine would be transportable in standard refrigerated vehicles and could be stored in normal refrigerators. Moderna's vaccine requires a temperature of minus 4 degrees Fahrenheit, while Pfizer's needs to be shipped at the ultra-cold temperature of minus 94 degrees Fahrenheit. Those requirements will make storage and transport significantly more challenging.

So, yes, Pfizer and Moderna are in the lead from a timeline perspective. Both of their candidates could meet the FDA requirements that would allow the companies to apply for emergency use authorization (EUA) later this month. If the U.S. Food and Drug Administration offers one or both companies an EUA, they  -- and their shareholders -- will benefit. But Novavax's strengths could still make it a big long-term winner in the COVID-19 vaccine race. That's why Robinhood investors and other aggressive investors should consider adding Novavax stock to their portfolios now.

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.