Does big pharma dominate the coronavirus vaccine race? It might seem that way. Of the five COVID-19 vaccine candidates in late-stage testing that could be players in the U.S. market, three are being developed or co-developed by huge drugmakers.

But that still leaves a couple of not-so-big companies in the mix. Moderna (NASDAQ:MRNA) and Novavax (NASDAQ:NVAX) are clinical-stage biotechs that just might emerge as tremendous winners in the COVID-19 vaccine market. Here's how they stack up against each other from an investment perspective.

Gloved hands holding two COVID-19 vaccine bottles

Image source: Getty Images.

Coronavirus programs

Moderna definitely enjoys something of a head start over Novavax in this race. While Novavax has a phase 3 clinical study for its experimental COVID-19 vaccine NVX-CoV2373 underway in the U.K., it hasn't begun a pivotal U.S. study yet.

Meanwhile, Moderna has already announced fantastic interim efficacy results from the phase 3 trial of its COVID-19 vaccine candidate, mRNA-1273. Earlier this week, the biotech reported that the vaccine was showing an efficacy of 94.5%. That's a lot higher than what many industry observers had previously been expecting. Moderna plans to file for an emergency use authorization (EUA) for mRNA-1273 within the next few weeks.

Don't count Novavax out, though. The company expects to start a late-stage study of NVX-CoV2373 in the U.S. by the end of November. In August, after Novavax reported early-stage clinical results, some Wall Street analysts asserted that NVX-CoV2373 had the potential to be the best-in-class COVID-19 vaccine.

Moderna appears to have overcome many of the ultra-cold storage requirements associated with messenger RNA (mRNA) vaccines. However, Novavax's protein-based vaccine doesn't have such issues at all. 

Other pipeline candidates

From a wider perspective, Novavax has an edge over Moderna in that it already has another late-stage pipeline candidate that could be on its way to regulatory approval soon. The company announced positive results earlier this year from a late-stage study of its experimental influenza vaccine, NanoFlu. But Novavax must complete a lot of consistency studies to meet the FDA's requirements for manufacturing consistency before it can file for regulatory approval.

The biotech is already exploring the potential for combining NanoFlu with NVX-CoV2373 to make a single-shot flu/COVID-19 vaccine for post-pandemic use. If this effort is successful, it could give Novavax an important competitive advantage over the longer term. 

Moderna doesn't have another late-stage candidate waiting in the wings. However, its pipeline is loaded, with five other antiviral vaccine candidates in clinical testing. The one that's furthest along in the process is the experimental cytomegalovirus (CMV) vaccine mRNA-1647, which is currently being evaluated in a phase 2 study. Moderna's pipeline also includes two cancer vaccine candidates that it's developing in partnership with Merck

It isn't solely focused on vaccines, though. It's working on mRNA therapeutic candidates targeting various types of cancer, Chikungunya virus, and coronary artery disease.

Better coronavirus stock?

Deciding between these two biotech stocks isn't as easy as it might seem. Moderna appears to be less risky to some extent because of the increased likelihood that the FDA will award it an EUA for mRNA-1273. On the other hand, high expectations are already largely baked into its share price.

That's not as much of a problem for Novavax. The biotech's market cap of around $5.5 billion could be a bargain if NVX-CoV2373, NanoFlu, or both make it to market.

My view is that Novavax is likely to be the bigger winner over the next year or so. I'm cautiously optimistic about the prospects for its  COVID-19 vaccine. I also think that the chances of NanoFlu winning approval are pretty good. 

Over the long run, though, I suspect that Moderna will generate greater returns. It appears to be demonstrating with mRNA-1273 that the mRNA approach is both safe and effective. I expect the biotech will roll out multiple mRNA vaccines and therapies over the next decade and beyond. The bottom line, in my view, is that Moderna could have a platform based on its mRNA technology that could fuel its growth for a long time to come.