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Better COVID Stock: Moderna vs. Novavax

By Adria Cimino – Oct 6, 2021 at 6:00AM

Key Points

  • Moderna expects $20 billion in coronavirus vaccine revenue this year.
  • Novavax aims to complete an authorization request for its vaccine candidate in the fourth quarter.
  • Both companies are working on combined flu/COVID vaccine candidates.

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One is a market leader. The other has a big catalyst ahead.

Moderna (MRNA -3.98%) and Novavax (NVAX -4.68%) have shaken up the vaccine world over the past year. Moderna became one of the first to launch a coronavirus vaccine. Novavax may soon enter the market with its vaccine candidate. Shares of both companies soared in 2020. Moderna rose 434% and Novavax surged more than 2,700%. But the story isn't over. Gains have continued this year.

Now, you might be wondering, If I want to invest in just one coronavirus player right now, which one of these hot stocks should I choose? Let's take a look at both companies -- and consider your investing style.

Person looking at tablet.

Image source: Getty Images.

A coronavirus vaccine leader

I'll start with Moderna. The biotech shares leadership in the coronavirus vaccine market with rival Pfizer and Pfizer's partner BioNTech. Moderna's vaccine has fully vaccinated 68 million Americans so far. The U.S. has ordered a total of 500 million doses from the company to be delivered through the first quarter of next year. Moderna has also won deals this year and into the future with countries around the world.

Moderna's vaccine brought the company to profitability after only one quarter on the market. And that profit totaled more than $1 billion. Moderna expects $20 billion in vaccine revenue this year. For next year, advance purchase agreements and options already total $20 billion too. And the biotech has even signed supply deals through 2024.

Ahead, we can expect broadened use of the vaccine. Moderna has requested emergency authorization for use in teens. A trial in children is ongoing -- but if all goes smoothly, authorization in this group may happen in the coming months.

Moderna isn't stopping with today's vaccine. The company recently requested emergency authorization of a booster. And down the road, Moderna plans to launch a next-generation vaccine and a combined COVID/flu vaccine.

An alternative to mRNA vaccines

Now, let's consider Novavax. The biotech's vaccine isn't a messenger RNA (mRNA) vaccine like Moderna's. It doesn't use mRNA to instruct the body's cells to produce copies of the COVID spike protein. Instead, Novavax creates coronavirus spike protein copies in the lab, transforms them into nanoparticles, and adds an adjuvant to boost the body's immune response. Today's mRNA vaccines perform well. So, it's positive that Novavax uses different technology. This means it can carve out market share among those who are looking for an alternative to mRNA vaccines.

Novavax's clinical trial data are positive. But manufacturing details -- such as raw materials shortages -- have held up the company's request for authorization. Part of the submission involves showing the ability to produce vaccine at a large scale. Novavax aims to complete its authorization request in the U.S. in the fourth quarter.

Like Moderna, Novavax also is working on a combined COVID/flu vaccine. But Novavax surely has the upper hand here. That's because Novavax already has a flu vaccine candidate that has met all primary endpoints in phase 3 trials. Novavax has combined that candidate with its COVID candidate. The company launched a phase 1/2 trial a few weeks ago. Moderna hasn't brought a flu candidate all the way through trials. So, it's possible Novavax could be first to market with this combination if all goes smoothly.

Your investing style

Now, let's take a look at your investing style. I always favor long-term investing. And if you do too, Moderna may be a safer option. Here's why. First of all, Moderna is already profitable and has a billion-dollar product on the market. Importantly, the company has 37 potential products in the pipeline. And 22 of them are already in clinical trials.

Another blockbuster product may be on the horizon. Moderna plans to launch a phase 3 trial of its cytomegalovirus (CMV) vaccine candidate this year. So, whether COVID vaccine sales stay strong or wane, Moderna still offers many potential revenue drivers down the road. And this should lead to share performance.

Novavax might satisfy investors looking for gains in the near term. That's because the company has a major catalyst coming up. If Novavax meets its goal to request authorization at the end of the year, and if it wins a regulatory nod, the shares could soar.

Down the road, potential authorization of Novavax's flu candidate and the combined COVID/flu candidate may offer additional catalysts. Overall, I'm positive about Novavax's prospects.

Still, Novavax's pipeline isn't as hefty as that of Moderna. Beyond COVID and flu, Novavax has candidates in the pipeline for four other viruses. And that's why, for the long term, I would choose Moderna if I could buy only one of these dynamic vaccine stocks right now.

Adria Cimino has no position in any of the stocks mentioned. The Motley Fool recommends Moderna Inc. The Motley Fool has a disclosure policy.

Stocks Mentioned

Moderna Stock Quote
Moderna
MRNA
$177.35 (-3.98%) $-7.35
Pfizer Stock Quote
Pfizer
PFE
$51.72 (-0.12%) $0.06
Novavax Stock Quote
Novavax
NVAX
$16.51 (-4.68%) $0.81
BioNTech Se Stock Quote
BioNTech Se
BNTX
$170.30 (-0.88%) $-1.51

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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