Since 2021, shares of Novavax (NVAX 3.54%) have absolutely crumbled, falling by a whopping 95%. Even with the price rally in recent days, the stock has still been a disastrous investment over the past few years. The price drop was justified largely because the company's fate was uncertain. There were question marks relating to its growth and a canceled purchase agreement.

The good news is that one of those issues recently reached a positive resolution. Is that enough to make this beaten-down stock worth taking a chance on?

Novavax settles its dispute with Gavi

One of the clouds hanging over Novavax was a dispute with a global vaccine organization called Gavi, the Vaccine Alliance. The issue goes back to 2022 when Novavax terminated a purchase agreement with Gavi after it didn't procure the doses it had previously agreed to buy. Gavi paid $700 million in advance, which it ended up wanting a refund for as the shots weren't needed anymore. But Novavax said the payments were nonrefundable.

After some protracted negotiations, the issue looks to be settled, with Novavax agreeing to pay up to $475 million back to Gavi. The final amount will depend on whether Gavi orders any more shots. For investors, it helps that the total liability for Novavax has been capped, and is less than feared. That's positive news for a company that is bleeding cash and that has raised going concern issues in the past.

The business still faces significant concerns

Having to pay $225 million less to Gavi is good news for Novavax, but that doesn't solve any of the other problems facing the business, like how the company is going to stop bleeding cash and how it can generate revenue outside of its COVID-19 vaccine.

The healthcare company has an uncertain future because, in its pipeline, it's still banking on a combination shot for COVID-19 and influenza that's in phase 2 trials. The danger is that just as with demand for its COVID-19 shot, even if the new combination shot obtains approval, there may not be a huge demand. There are other flu vaccines, and concerns about COVID-19 appear to be diminishing.

Without a blockbuster drug or vaccine to generate significant revenue growth for the business, it's hard to see Novavax's prospects improving in the long run.

The one lever the company can continue to pull in is cost reduction. Earlier this year, Novavax announced it will cut 12% of its workforce to reduce its expenses and minimize its cash burn. Last year it also announced job cuts; the cumulative effect is a reduction of approximately 30% of full-time jobs.

Novavax stock isn't a safer buy on this news

The favorable settlement with Gavi will help conserve some cash for Novavax, but it isn't nearly enough to make the healthcare stock anything but a risky investment. The company's revenue is likely to continue declining. And while it can reduce costs, without a big growth catalyst to help transform the business, this is still a stock that will be too risky for most investors.

Although shares of Novavax have been rising recently due to this news, you may be better off avoiding the stock, as this is likely to remain a volatile investment for the foreseeable future. There are better options for growth investors to consider.