Novavax (NVAX 3.54%) fell behind in the original coronavirus vaccine race as rivals Pfizer and Moderna brought their products to market. The biotech launched its vaccine a year-and-a-half later in the U.S. and therefore missed out on the biggest revenue opportunity. As a result, the shares dropped and have failed to truly rebound. This year, they've lost 28%.

But all isn't lost. Coronavirus vaccines still are needed, and the market today is making an important shift. It's no longer a pandemic-style market involving people rushing out to get shots. Instead, it's following the flu vaccine market with the idea that people will get an annual vaccine -- and that should lead to recurrent revenue for vaccine makers including Novavax.

Does this make the struggling biotech a buy?

An opportunity for Novavax

Here's the good news. The U.S. Food and Drug Administration (FDA) recently gave Novavax the OK to launch its updated coronavirus vaccine in time for the fall vaccination season. The FDA approved the Pfizer and Moderna vaccines about three weeks earlier, but supply shortages and insurance glitches mean the companies haven't taken a huge lead -- and this equals opportunity for Novavax.

After all, if the market follows that of the flu, about half of the U.S. population may go for vaccination. And that means all three companies could generate significant revenue.

Novavax's vaccine also may appeal to some who prefer a product relying on a technology that's been around for a while. The company uses the protein subunit method, delivering a copy of the spike protein into the body to trigger an immune response. This method has been used for years in other vaccines such as the one for hepatitis B. Pfizer and Modera were the first to launch mRNA vaccines back in 2020.

So what may be holding Novavax back from an earnings and share performance perspective? The company right now is traveling through challenging times. Novavax's late market entry earlier in the pandemic left it with profit that didn't match up with its significant investment in infrastructure to produce, store, and sell the vaccine. Early this year, the company even questioned its ability to continue business.

A turnaround plan

Then, Novavax launched a turnaround plan, including a 25% reduction in its workforce and an effort to cut costs 50% by next year from last year's level. Meanwhile, it continued to shepherd its updated vaccine through the pipeline and develop a combined flu/coronavirus candidate that could become a winning product down the road. Most people and healthcare providers would prefer one shot to cover two viruses, versus two shots.

But Pfizer and Moderna also are working on combined candidates, representing potential competition. The question is whether Novavax, on its own, will be able to bring its combined candidate all the way through development, considering its financial situation.

The company recently said it planned progressive investments in the program due to its promise. We'll have to wait and see how that turns out and monitor the data. This represents one uncertainty.

Novavax also holds some risk because it depends on its coronavirus program, and the pipeline isn't particularly broad. Outside of the coronavirus vaccine, Novavax has a stand-alone flu vaccine candidate and a malaria candidate in the pipeline.

Of course, Novavax could bring in significant revenue from its coronavirus program or a potential flu shot in the future, but this narrow focus still represents a weak point for the company -- especially since competition is high in the areas of coronavirus and flu.

Your investment strategy

So is Novavax a buy today? The answer depends on your investment strategy and comfort with risk.

If you're looking for a potential recovery story and don't mind some risk, you may want to scoop up a few Novavax shares right now. The stock, which is trading at 0.4x sales, looks cheap -- if Novavax carves out some market share this vaccination season and manages to steadily grow its position and revenue over time. It's a reasonable bet for aggressive investors with diversified portfolios.

But if you're a cautious investor, you're better off staying away from Novavax -- at least until it achieves some cost-cutting goals and investors see how it fares in this Fall's vaccine market. At that point, there may be more visibility into the company's long-term prospects -- a key element to reduce some of the risk weighing on Novavax's shares right now.

Novavax may be a buy for some today, but others may be better off keeping this biotech stock on their watch lists.