You have to be brave to make 2,900% in a year.

Novavax (NASDAQ:NVAX) started off 2020 in a deep, dark hole. That's because 2019 was a horrible year for the company. When the biotech reported disappointing results from its phase 3 trial for ResVax, a vaccine for respiratory syncytial virus (RSV) in babies, the market whacked the stock. Shares traded for pennies. Novavax's valuation fell so hard, the company had to do a 1-for-20 reverse split in order to keep trading on the Nasdaq Stock Market. By Dec. 31, 2019, the stock had fallen to $4 a share.

What a difference a year makes!

Dollars raining on a businessman holding an umbrella and smiling

Image source: Getty Images

At the beginning of the year, Novavax's hopes were riding on NanoFlu, a vaccine for influenza. Success! Not only did it report fantastic data from its phase 3 flu trial, but simultaneously the small biotech emerged as one of the leaders in the race to vaccinate the world against a new threat, COVID-19.

The small biotech received almost $2 billion in funding from government and nonprofit sources. And then Novavax reported positive data from an early trial for its COVID-19 vaccine. This development sent shares soaring incredibly high.

NVAX Chart

NVAX data by YCharts.

Now it's December 2020. Investors are waiting on phase 3 trial results from the coronavirus vaccine. Positive data will send Novavax shares soaring even higher, while any bad news will crash the stock.

And yet long-term shareholders can actually relax. Novavax is now flush with cash, and Food and Drug Administration approval for its flu vaccine is highly likely. So investors have a nice safety net if the coronavirus vaccine disappoints, while the potential upside is incredible.   

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.