In the early days of the COVID-19 pandemic, Novavax (NVAX -5.62%) took center stage. The biotech company became one of the first to enter clinical trials with a coronavirus vaccine candidate. And investors bet on victory, driving the shares up more than 2,700% in 2020.

Since then, though, troubles have multiplied -- and the stock has plummeted. Novavax's vaccine launched a year after those of the company's rivals, meaning Novavax missed out on the biggest revenue opportunity. And this weighed on the company's financial situation.

This week, though, the company announced a new major move in its cost-cutting plan -- and the stock took off. Is the worst over for this embattled vaccine maker?

Arriving a year later than rivals

First, here's a quick summary of what's happened so far. Novavax brought its vaccine candidate to market a year after rivals in most countries -- and a year and a half late in the U.S. That meant the company wasn't able to sell its product when demand was at its highest.

As a result, Novavax's pandemic revenue came in much lower than that of rival Moderna. Both companies depend on only one product for revenue: the coronavirus vaccine.

NVAX Revenue (Annual) Chart

NVAX Revenue (Annual) data by YCharts

Today, the pandemic isn't totally over. But as we head toward a post-pandemic situation, vaccine demand is on the decline. Companies still may bring in recurrent revenue as people go for annual boosters. But the opportunity isn't as big as in earlier pandemic days -- and first entrants Moderna and Pfizer dominate the market.

All of this has limited Novavax's earnings potential for the vaccine. To keep afloat, earlier this year Novavax announced it would slow down its spending. And in the company's first-quarter earnings report this week, it offered details.

What's Novavax's new major move? The biotech plans on cutting 25% of its workforce. Novavax will also downsize in the areas of facilities and infrastructure. The idea is to better match costs with the size of the post-pandemic vaccine market. The cost-cutting efforts should reduce research and development expenses and selling, general, and administrative expenses 40% to 50% next year compared to 2022.

These plans help fulfill the company's goals of reducing spending, managing cash flow, and revamping structure to align with demand.

$800 million in potential vaccine purchases

Novavax also said it signed $800 million in potential advance purchase agreements internationally for vaccines this year. And the company cut current outstanding liabilities in the quarter by $541 million. This left Novavax with $637 million in cash at the end of the quarter.

The company went on to further reduce liabilities last month by $140 million. Novavax also said the steps it's taking now should help it continue operating for the coming 12 months.

Of course, some of Novavax's efforts will come at a cost in the near term. For example, the company predicts it will record a restructuring charge of $10 million to $15 million, mainly in the second quarter. This will be related to employee severance packages.

And Novavax must find support to help it bring its combined coronavirus/flu vaccine candidate through the development process. The company announced positive data from a phase 2 trial. Once more data are available, Novavax said it would consider options such as strategic collaborations or financing alternatives.

Meanwhile, Novavax is preparing to update its vaccine according to regulators' requirements in time for the fall vaccination season. If all goes smoothly, the company aims to reach as much as $1.24 billion in product sales this year. This is an important element in the plan to keep going with operations.

Addressing the problems

Now, let's get back to our question: Is the worst over for Novavax? It's clear Novavax has laid out its problems and is addressing them. That's positive. It's unlikely that new, unrelated issues will emerge at this point.

But Novavax is still in a very high-risk chapter of its story. All or most of the company's plans must fall into place for it to survive -- and eventually thrive. A combined vaccine could be a major product down the road. And if Novavax finds a way to advance that program, the company's shares could soar.

It's also possible that Novavax may reach some stumbling blocks -- or worse. And that could be devastating for Novavax shares.

All of this means Novavax remains a risky stock right now. Aggressive investors may consider buying a few shares to bet on this potential recovery story. But most investors are better off watching from the sidelines.