After a brutal three-year period that saw its shares collapse by 99%, any remaining longtime shareholders of Novavax (NVAX 3.54%) are doubtlessly eager for the biotech to finally step out of the shadows of its first "success" and launch its next winner, even if it means waiting as long as 10 years.

Alas, that might not be enough time for this company to find its next big thing. In fact, it might not survive half that long. Here's why.

Will it even be around?

There is a strong possibility that Novavax won't even be in business in 2034. On Jan. 31, management announced another round of layoffs, slashing 12% of its workforce in the aftermath of cutting 25% of its employees in May 2023. Management has already told shareholders that the biotech's survival is in serious question.

Despite trailing 12-month (TTM) sales of its Nuvaxovid coronavirus vaccine bringing in more than $1 billion, it's still nowhere near being profitable, and it's burning plenty of cash each quarter. Right now, it has $651 million in cash, equivalents, and short-term investments, and its TTM cash burn was $727 million.

The issue is that Nuvaxovid didn't get approved until long after competing vaccines were already commercialized and had time to establish their market shares. Then, as the pandemic's intensity was perceived to decrease, the COVID-19 vaccine gold rush era ended. Now, there is little demand for doses and the few people who do already have strong preferences when they go to get their boosters, assuming they go at all. There probably won't be any disruption of that trend over the next 10 years, so if Novavax is going to survive, it'll need to develop and sell new or dramatically improved products.

Assuming Novavax survives the near term, it is unclear exactly which products it will be selling or what vaccines or other biotechnologies it will be developing. Today, its pipeline features no early-stage programs at all, and only two in phase 2 trials. One of those two is a seasonal influenza jab, and the other is a combination vaccine for both coronavirus and influenza.

Both of those programs could yield medicines that generate some recurring revenue over the long-term if they are commercialized, and they might even sell enough to sustain the company in a reduced form. But there is a scenario in which it could perform a bit better.

Under the best possible conditions, ongoing research into its coronavirus vaccine's performance characteristics would show that it is capable of arresting viral transmission, thereby fully protecting people from infection. That'd be a major advantage, as the vaccines made by Pfizer, Moderna, and other manufacturers can't fully prevent people from developing symptoms and infecting others. Based on the research available today, that outcome is plausible, though still unproven. It's also possible that an updated version of the product could be developed intentionally to have the desired attributes.

Uncovering or developing other positive and unique capabilities, like perhaps the shot's ability to guard against the possibility of infected people developing "long COVID" or other chronic post-infection problems, would be another bonus. And when bundled into the same shot with an effective flu vaccine, the more complete protection offered by Novavax's jab could make it an obvious winner for people looking to stay healthy, driving recurring revenue and securing a decent market share. Today's shareholders would likely not be rich 10 years from now if this best-case scenario occurs, and they might not beat the market, but they might see some moderate returns over time.

Novavax shareholders are looking for the exits

Without much to offer from its pipeline beyond seasonal updates to its coronavirus vaccine and opportunities for convenient combination vaccines, it's difficult to see how the Novavax of 2034 might be significantly bigger than the Novavax of today. If it's going to survive, it'll certainly need to become profitable at a minimum.

If it navigates its near-term financial challenges, the highest probability outcome is that it will continue to limp along through the rest of the decade and beyond. In case it was not clear from the above, it's not a great idea to buy shares of this business today. Even if it survives, it does not have a pathway to thriving in the long term. Regardless of where it'll be in the 2030s, that probably means investors should consider selling this biotech stock.