The pandemic isn't over -- much as we might wish it were. An ongoing surge in coronavirus cases is pouring cold water on these hopes. We recently got a stark reminder that the disease spares nobody after Jill Biden, the wife of U.S. President Joe Biden, tested positive for COVID-19.

Many of those biotechs on the front lines of the fight against the coronavirus seem to be coming back to life after their shares got hammered over the past year or more. One of them is Novavax (NVAX -0.16%), one of the few companies with an approved or authorized COVID-19 vaccine in circulation in the U.S.

Novavax's shares are up by 21% in the past month alone, but should investors be rushing to invest in this company?

NVAX Chart

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Looking at Novavax's prospects

The market does not like uncertainty. But the adjective "uncertain" describes Novavax's prospects in the COVID-19 market. Here are just some of the questions on which the company's ability to generate revenue and earnings depends. How contagious will newer variants of the coronavirus be? How large will the coronavirus vaccine market be from here on out? Will governments at some point again buy vaccine doses in bulk the way they did in the early pandemic years? What percentage of the market can Novavax grab? 

These questions are difficult to answer because cases of COVID-19 will likely continue to fluctuate. And while that means there are times when Novavax's sales -- and stock price -- will jump as cases are going up, it also means that once things cool down, the company won't perform nearly as well. This isn't a recipe for delivering consistently solid returns over the long run, so unless Novavax has something else in development, it might not be worth the trouble, at least not for those investors focused on the long game. 

The company could become more attractive if it can develop other vaccines that can drive solid and consistent top-line growth regardless of what's going on with COVID. That's what Moderna -- one of Novavax's competitors in the coronavirus vaccine market -- seems close to doing. Moderna has no other products on the market, but the biotech has delivered solid clinical wins in the past two years and is inching closer to launching several non-COVID products. How does Novavax fare? 

Novavax has a malaria vaccine candidate in phase 2 studies, while its combined COVID/flu vaccine is undergoing a phase 1/2 clinical trial. These candidates are, at best, a couple of years away from approval, assuming they ace every clinical and regulatory obstacle in their way in the meantime, which is by no means certain. Further, Novavax's financial situation hardly inspires confidence. Earlier this year, its management expressed doubt as to its ability to remain in business through the entire year.

The company has made moves to improve things, including efforts to reduce expenses and costs. In the first six months of the year, Novavax's revenue of $505.4 million declined by about 43% year over year. Novavax did improve on the bottom line, with a loss per share of $2.69 through June 30, compared to the net loss per share of $3.97 reported in the comparable period of the previous fiscal year. It ended the second quarter with $518 million in cash, equivalents, and restricted cash, less than half what it had as of the end of 2022.

Novavax expects total revenue between $1.3 billion and $1.5 billion for 2023, compared to $2 billion last year. The good news, though, is that the biotech will survive through the year. 

Not worth the trouble 

Despite Novavax's surge on the stock market over the past month, the company's shares are down by nearly 90% in the past three years. As of this writing, the biotech's market capitalization is just under $1 billion. Perhaps some investors think that if Novavax can continue to generate the kinds of sales it did in 2022, its stock is currently undervalued and could continue to rise.

That may or may not happen, but it's even less certain that the company can perform well beyond this period given that it isn't anywhere close to launching new products on the market and its cash balance isn't particularly impressive. That's why investors should seek out other biotech stocks as this one is highly unlikely to be a winner over the long run.