It's hard to believe that more than two years after the onset of COVID-19 in the U.S., we're still seeing vaccines come to market. Of course, we shouldn't expect companies to just stop development midstream because a competitor received approval from the Food and Drug Administration first. On the other hand, it's a demonstration that no matter how far medical treatments and preventatives advance, more are likely to be needed.

Novavax (NVAX -9.65%) intends to do its part in keeping people safe from the coronavirus that causes COVID. But can FDA approval be enough to carry the stock upward?

A masked patient watches wide-eyed as a healthcare provider prepares an injection.

Image source: Getty Images.

Novavax's COVID vaccine and how it works

On July 13 the FDA granted an Emergency Use Authorization (EUA) for the Novavax COVID-19 vaccine, CovoVax, following European Medicines Agency (EMA) approval in December. As a result of the EUA, the U.S. government has placed an order for 3.2 million doses with the company.

The approval opens a vast market for Novavax, though it may be a bit late to the game when you consider that the Moderna and Pfizer-BioNTech vaccines received emergency use authorization back in December 2020.

Over 5.3 billion people have already received a COVID vaccine as of July 11, led by 354 million Pfizer recipients, followed by Moderna at 255 million. One of the problems facing the medical community is that 31% of the global population has not yet received even one dose of a COVID-19 vaccine. In some cases, people reject the idea of receiving a vaccine based on new technology to create an immune response.

This is where Novavax might find success if its protein-based vaccine with familiar technology is well-received. It's important to note that neither vaccine type causes an infection to build an immune response, although the modes by which the respective vaccines help a patient's cells are different.

The mRNA vaccines from Moderna and Pfizer trick the body's cells into creating parts of the virus that can trigger the immune system. Novavax's vaccine contains the spike protein of the coronavirus itself but is formulated as a nanoparticle, which displays the protein to generate an immune response. While both methods seem to work the one used by Novavax is considered tried and true in other vaccines that patients have received. This could be a factor in encouraging those who aren't as comfortable with the current COVID vaccine options to get the Novavax vaccine.

Another advantage of the Novavax vaccine is that it can be stored at refrigerator temperatures, rather than requiring storage in a freezer. This makes the vaccine easier to transport and administer in a more timely manner.

The EU expands the number of potential recipients

Though the vaccine has just received EUA with the FDA in the past week, it's already available in over 40 countries as Nuvaxovid, with a Conditional Marketing Authorization by the EMA for adult use in December 2021. And on July 5 the EMA permitted administering the vaccine to adolescents who are 12 to 17 years old. This will open a new international market for Novavax, which should help boost revenue in 2022 and beyond.

The company is in the process of generating and gathering data to support the use of Covovax for adolescents in the U.S. If that data is positive, and leads to an expansion of use, it should be another boost to the company's top line.

Vaccine side effects aren't the only thing investors need to worry about

But the challenges for investors in Novavax are not over. In addition to getting a late start against its primary competition, Novavax's vaccine has been associated with "a few" cases of anaphylaxis as a side effect, so the EMA has added side-effect warnings for the vaccine that include anaphylaxis, myocarditis, and pericarditis -- each of which can be life-threatening. And because the warning was made by the EMA, it could result in the FDA keeping a stronger magnifying glass on the vaccine as it rolls out in the U.S.

So, will Novavax stock pan out over the long term? The good news for potential long-term investors is that the share price is down 78% since September, its lowest point in two years, providing a possible buy-low opportunity. The bad news is that on word of the anaphylaxis cases, Novavax stock took a 26% beating.

That concern wouldn't be a first for Novavax investors, either. Historically this stock has shown a few spikes, providing some excellent opportunities for short-term gains; but those spikes have been few and far between, resulting in a lackluster performance for long-term investors.

The evolution of new coronavirus variants has added uncertainty about the efficacy of available vaccines, so it may be a bit risky to invest in a company in an uphill battle against established and formidable competition. There are other great pharmaceutical stocks that may offer a better long-term opportunity for investors.