Novavax (NVAX 13.68%) is one of my favorite stocks. Sometimes you'll hear the advice, "Don't fall in love with your stocks." I used to believe that, but now I think it's fine to love your stocks. Did I love Novavax when it went up 3,000% for me in 2020? Yes, I did.

Did I get mad when the company had to slash its estimates a couple of weeks ago? No, I wailed in pain: You broke my heart, Novavax! For a while there I didn't want to talk to you or look at you.

But overall Novavax has been a great stock for my family. I'm happy to be an investor. And I think the company's future will be just fine. Here's the Novavax story, as I've experienced it.

A healthcare worker in full personal protective equipment injects a drug into a miniature globe.

Image source: Getty Images.

Novavax at $4 a share was a great buy

In December 2019, Novavax was a scary stock. The company had suffered a phase 3 failure in its trial of a vaccine to prevent respiratory syncytial virus (RSV) in pregnant subjects. Investors fled, and the shorts were pouncing. The biotech had to do a 20-for-1 reverse split just to keep its shares listed on the Nasdaq. And the price kept falling, driving Novavax into micro-cap land.

There was one ray of hope: The company had an influenza vaccine that was flying through clinical trials. The Food and Drug Administration (and investors in biotech stocks know that the FDA is incredibly important) was unhappy with the existing flu vaccines on the market and had hopes that Novavax's vaccine candidate would be an improvement.

In its trials, Novavax's vaccine, NanoFlu, was compared with the market-leading vaccines from Sanofi (SNY -0.51%). And NanoFlu beat the top flu vaccine in the world in animal trials, in phase 1, and phase 2.

At this point, Novavax was a tiny micro-cap. I had visions in my head of a possible 10-bagger. I was excited, but also scared. I made two small investments, at $6 and at $4. If the phase 3 news was bad, I would probably lose it all. But if the phase 3 results were positive, I was expecting a big return. So I liked the risk-reward ratio.

That's when a black-swan event happened -- COVID-19 struck the world. COVID vaccine stocks went higher. And Novavax shot up higher than most. On the strength of its COVID vaccine, the biotech stock ran up 3,000% in 2020, to $128 per share. It was the No. 1 stock in the market that year. And after Novavax reported positive phase 3 data in its COVID-19 trial in 2021, the stock hit $330 per share, about a 60-bagger based on my original purchases. That all happened in under two years.

It was a wild ride all the way up to $330

If you looked at my family's portfolio in March 2020, you'd have seen all of our stocks bleeding out, except for Novavax. The stock market was crashing all around us, but my tiny biotech was going up by double digits every day. All the rules for biotech investing were out the window because of COVID-19, a disease that was shutting down the world.

When Novavax announced that it was pursuing a COVID vaccine, the stock skyrocketed. When the company said it had found a vaccine candidate in the lab, the stock spiked higher yet again. When the company reported positive animal data, the stock exploded higher. And it hadn't even started testing the drug in humans yet.

That's when Novavax started getting big checks. In May 2020, Novavax got a windfall from a charity founded by Bill and Melinda Gates: the Coalition for Epidemic Preparedness Innovations. The scientists at CEPI looked at Novavax's molecule and its early data and decided to send the company $384 million. A month or two after that, the public-private partnership Operation Warp Speed preordered 100 million doses of the company's vaccines and paid $1.6 billion for them.

In February 2021, Novavax reported excellent phase 3 data from its COVID-19 vaccine. Right after that, the stock hit $330 per share. And yet the biotech still had zero drugs on the market.

It was all downhill from there

What killed Novavax stock was the decision, in the company's dark days, to sell its manufacturing facility. Management really had no choice. In 2019 it was desperate for cash and trying to move some employees off the payroll. The lack of a manufacturing facility would prove to be a major vulnerability for the company in 2021: Novavax had to contract with third-party manufacturers around the world to produce its vaccine. And the size of the orders was massive -- a couple of billion doses.

In retrospect, it might have been better for Novavax to have partnered with a big pharma like Merck or GSK; that's what BioNTech did when it partnered with Pfizer. But Novavax elected to stay independent, and so the company reported delay after delay in 2021, all because of manufacturing issues.

Finally, at the end of the year, Novavax started getting emergency use authorizations around the world. (The U.S. would take another six months.)

Now we're in the middle of 2022, and Novavax has dropped to $40. I've still got a 7-bagger in the stock over three years, so I can't complain too loudly. I took profits at $85 and $125 and $330. Do I wish in retrospect that I had sold all my shares at $330? Well, yes -- if I was a time-traveler, I'd be a billionaire.

One thing I try to remind myself of is that I want COVID-19 to disappear. COVID killed a friend of mine, and I want us all to be immune to this awful disease. Novavax, at its heart, is a defensive stock. If either COVID or the flu dissipates in the near future, this stock would be hit hard -- and I hope that's what happens.

But in reality, we know that flu viruses mutate, and the coronavirus strains that cause COVID mutate. So we'll likely be vaccinating against those threats for years to come. And you never know -- a new virus could appear at any time.

So I'm keeping my Novavax shares. The stock's been good to me, and the company's science is top-of-the-line.