Early in the coronavirus vaccine race, Novavax (NVAX -0.43%) seemed to have secured the third spot behind rivals Moderna (MRNA -0.74%) and Pfizer. The U.S. Food and Drug Administration (FDA) authorized the Moderna and Pfizer vaccines in December. And it looked like Novavax would submit its U.S. authorization request in the first half of this year.

But Novavax fell behind as materials shortages hurt its manufacturing ramp up. Now, the company expects to file for authorization in the fourth quarter.

But there's an important area where Novavax has stepped ahead of its bigger rivals. And this particular area actually may be worth billions of dollars in revenue in the years to come. Let's take a closer look at what Novavax is doing now that may lead to victory down the road.

A healthcare worker draws up a vaccine while a patient waits in the background.

Image source: Getty Images.

A new clinical trial

This week, Novavax said it began a phase 1/2 clinical trial of a combination flu/coronavirus vaccine candidate. The company is testing the potential product in 640 adults ages 50 through 70.

The investigational vaccine will be given in two doses, 56 days apart. Researchers will study safety and immune response. Novavax expects to generate results in the first half of next year.

Clearly, such a product would appeal to the masses. It would be a lot more convenient to go for one vaccine series annually that covers both viruses than to go for two separate series.

Novavax isn't alone in targeting a combined vaccine. Moderna is developing one, too. In July, the company started a phase 1/2 trial of a seasonal flu candidate. Moderna said this candidate would be "an important component" of an eventual combination vaccine.

Then, just this week, Moderna announced it's working on a single-dose vaccine combining a COVID-19 booster and a flu booster. That program hasn't yet entered clinical trials.

In a Pfizer earnings call back in May, CEO Albert Bourla said the company is looking into opportunities to combine its coronavirus vaccine with other vaccines. But he didn't offer further details.

In the race to develop a combined vaccine, Novavax is ahead. But it's not only because the company is the first to launch a clinical trial; it's because the two key products that make up this combined vaccine candidate already have been through extensive testing. Novavax's candidate involves a combination of its coronavirus vaccine and flu vaccine candidates.

The coronavirus candidate showed efficacy of more than 90% against mild, moderate, and severe disease. And it "demonstrated" 100% efficacy against moderate and severe disease. That's in a phase 3 trial conducted in the U.S. and Mexico.

NanoFlu -- the flu candidate -- met all primary endpoints in a phase 3 clinical trial in the spring of 2020. This means it produced an immune response that wasn't inferior to an already approved flu vaccine. It also beat secondary goals by producing higher immune responses to various flu strains than the approved vaccine. Novavax tested the candidate in adults ages 65 and older.

Something Moderna and Pfizer don't have

Novavax is heading into trials with two major components in this combined vaccine, where each has shown it's safe and efficacious. That's a big plus and something Moderna and Pfizer don't have.

If all goes smoothly for Novavax, the company could be the first to bring a combined product to market. When will that happen? Novavax said back in May that it would expect a 2025 launch. Moderna and Pfizer haven't given a timeline for a potential combined product.

Of course, we don't know the pricing of any future combined vaccines. But let's look at how much Moderna and Pfizer are making on their coronavirus vaccines this year as a guide. Pfizer and partner BioNTech expect more than $33 billion in revenue, and Moderna expects about $20 billion. Together, that's more than $50 billion.

It's clear that a combined vaccine would represent a billion-dollar market -- and possibly for more than one player. But the first to market may end up with the biggest share. We've seen that with Pfizer and the coronavirus vaccine. The FDA authorized Pfizer's vaccine about a week ahead of Moderna's.

This year, Novavax hasn't kept up with either of the big vaccine makers. But Novavax may have a second chance to stand out and lead the way in the long term. This potential product -- the combined vaccine -- could be a game changer.