As the coronavirus vaccine race continues, investors are increasingly ditching less prominent drugmakers exhibiting slow progress and/or financial woes; Inovio Pharmaceuticals (NASDAQ:INO) and Sorrento Therapeutics (NASDAQ:SRNE) are down between 8% and 36%, respectively, over the past month. In favor instead are large-cap sector players including Moderna (NASDAQ:MRNA) and AstraZeneca (NASDAQ:AZN), up 8% and 17%, respectively, in the same time frame.

There are some exceptions, however. One small-cap biotech that's been surprisingly resilient, Novavax (NASDAQ:NVAX), is up more than 1,000% since mid-February on its potential to commercialize a coronavirus vaccine.

Returns like that can propel an initial investment of $10,000 into more than $100,000 in less than nine months. At the current rate of return, Novavax could very well become a millionaire-maker stock. Today, let's look at why the company's momentum shows no sign of subsiding. 

Scientist holding a coronavirus vaccine vial.

Image source: Getty Images.

Why buy the stock now? 

A series of developments this month significantly bolstered the bullish case for Novavax. First, Pfizer (NYSE:PFE) and BioNTech (NASDAQ:BNTX) disclosed that their coronavirus vaccine candidate BNT162b2 had achieved at least 90% efficacy in a large-scale phase 3 clinical trials. In these trials, participants whose geographical locations put them at risk of contracting coronavirus are given either the vaccine candidate or a placebo. Next, Russia's experimental coronavirus vaccine, Sputnik V, also proved to be 92% effective at granting patients immunity to SARS-CoV-2 in late-stage studies. Both of these candidates had also produced strong neutralizing antibody responses against the coronavirus when given to volunteers in phase 1/2 trials.

This is important because it validates a key hypothesis behind much of the vaccine development work: that neutralizing antibodies induced from lab-derived vaccines are sufficient to prevent real-world coronavirus infections. That's great news for Novavax's candidate, NVX-CoV2373, which also showed strong results from its phase 1 trials, in which 100% of participants who received the vaccine candidate developed neutralizing antibodies with no serious adverse effects. Phase 3 results for NVX-CoV2373 will likely be out in early 2021.  

Another key point: While BNT162b2 and Sputnik V achieved similar late-stage success rates, the two vaccine candidates work differently -- the former uses messenger RNA that encodes for the SARS-CoV-2's key proteins to trigger the body's immune response, while the latter is a viral vector vaccine, meaning it prompts the production of antibodies using inactive copies of the virus. That's a good sign for Novavax's candidate, which uses a third method -- direct injection of viral proteins -- to solicit the production of antibodies. It seems the biological composition of a vaccine may be irrelevant to its success.  

A massive financial opportunity

Assuming clinical trial success, Novavax expects to produce 2 billion doses of its vaccine candidate by the end of 2021, contingent on clinical trial success. Assuming a price tag of $10 per vaccine, that could potentially mean $20 billion in annual revenue, which is enormous for a company with a market cap of just $5.2 billion.

Novavax has secured preorders for 276 million doses from governments in the U.S., U.K., Canada, and Australia. Unlike Pfizer's vaccine candidate, which requires at storage at ultra-low temperatures (negative 94 degrees Fahrenheit), Novavax's vaccine candidate only requires regular refrigeration conditions of 36 to 46 degrees Fahrenheit for proper temperature control. That would give Novavax's experimental vaccine a huge logistical edge over Pfizer's, despite the former's likely first-to-market advantage. Currently, the World Health Organization estimates that half of all vaccine doses are wasted due to improper temperature control and other problems during transport and delivery. 

So far, Novavax has received more than $1.6 billion of funding from the U.S. government's Operation Warp Speed, as well as $399 million from the Coalition for Epidemic Preparedness, for its vaccine candidate's development. If we see positive phase 3 data from NVX-CoV2373 in early 2021, it might be just the catalyst needed for Novavax to become a real millionaire-maker stock for biotech investors.  

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.