Most stocks move higher when there's good news. And then there's Novavax (NVAX -4.11%).

Last week, the U.S. Food and Drug Administration (FDA) at long last granted Emergency Use Authorization (EUA) to Novavax's COVID-19 vaccine. Instead of rising, though, Novavax's shares plunged 27%. 

There are several reasons behind this surprising sell-off, some of which have nothing to do with the FDA's EUA decision. But shareholders who have stuck with Novavax through a lot of drama are understandably quite frustrated.

Despite going in the wrong direction lately, it's still possible for Novavax to be a monster comeback stock. Here are the two things the company must do to make it happen.

1. Win authorization for its omicron booster

Novavax's U.S. EUA was certainly a positive step for the company. However, it only allows Novavax's COVID-19 vaccine to be used in the primary vaccination of adults ages 18 and up.

Around 77% of American adults have already been fully vaccinated. Sure, some of them who have resisted vaccination so far might be more open to receiving Novavax's vaccine. Unlike the other messenger RNA (mRNA) and DNA vaccines on the market, Novavax's COVID-19 vaccine uses a protein sub-unit approach that has been used in several other vaccines through the years.

But Novavax should have a much bigger opportunity in the booster market. The company needs to follow up its EUA for a primary two-dose series with authorization for its booster targeting the coronavirus omicron variant.

The good news is that Novavax expects to have its omicron booster ready in the fourth quarter of 2022. It's possible that the company's omicron booster could have an edge over mRNA boosters, considering that Novavax's original vaccine appears to be surprisingly effective at generating immune responses against the omicron variant.

2. Achieve success with its combo vaccine

Some experts predict that COVID-19 will transition from pandemic to endemic, with a market similar to what we have now with flu vaccines. If so, there should be tremendous potential for combination vaccines that provide protection against COVID-19 and influenza. Over the long term, the companies that achieve success with combo vaccines will likely be the biggest winners in the COVID-19 market. 

Moderna (MRNA -3.80%) has already advanced a flu vaccine candidate into late-stage testing. The company has plans to test a combination of this candidate with its COVID-19 vaccine in clinical studies as well. Pfizer (PFE -1.01%) and BioNTech (BNTX -1.37%) have similar plans but lag behind Moderna, with a mRNA flu vaccine candidate in phase 1 testing.

Novavax appears to be in the lead. It already reported positive results from a late-stage study of flu vaccine candidate NanoFlu in early 2020. The company announced positive initial data from a phase 1/2 study of its combo COVID-19/flu vaccine candidate in April 2022. 

Will this be enough?

Skeptics might wonder if checking off these two boxes will be enough for Novavax stock to really take off. I think that it will be.

To be sure, Novavax has overpromised and underdelivered in the past. The company needs to live up to its projections of having an omicron booster ready before the end of this year. It also needs to avoid miscues with the development of the combo COVID-19/flu vaccine.

Many investors are clearly betting against this happening, considering that Novavax's shares trade at barely over two times expected earnings. But Novavax has a legitimate opportunity to become a major player in the global vaccine market. This beaten-down vaccine stock just might be able to give long-suffering shareholders the comeback story they've eagerly anticipated.