• Novavax (NVAX) lost the COVID vaccine race to Moderna and Pfizer.
• Profits are only now starting to roll in.
• NVAX stock looks fairly-valued.

Novavax (NASDAQ:NVAX) is finally making money from Covid-19, but no one cares about NVAX stock anymore.

A profit of about $200 million, $3.30 per share, is expected when it reports first quarter earnings on May 30. Taiwan has ordered 2 million doses of its vaccine. Switzerland has given it conditional approval.

The trouble is, Wall Street is a buy on the rumor, sell on the news place. Novavax stock is down 58% since the start of the year. It opened Apr. 13 at almost $59 with a market cap of $4.4 billion on 2021 revenue of $1.146 billion.

That’s about right.

The BioTech Bust

As I have written about other stocks lately, the boom-and-bust biotech cycle has hit another bust. Novavax’s valuation of about 4 times revenue stacks up nicely against Moderna (NASDAQ:MRNA), the Covid-19 race winner, which is worth $64 billion on 2021 revenue of $18 billion.

When the investment window closes on biotech, cash is king. Novavax reported it had $1.5 billion of it at the end of December. But it lost $1.74 billion during 2021 as it worked to develop, test, and get approvals for its shot, which unlike the Moderna vaccine, doesn’t require cold storage.

There is hope that Novavax may find success as a booster shot, but I doubt it. Even people outside the U.S. want the “name brand” vaccine, meaning Moderna or Pfizer (NYSE:PFE), which also produced a mRNA-based vaccine with BioNTech (NASDAQ:BNTX). When Cyprus made 14,000 doses of the Novavax vaccine available recently, just 86 were taken in the first month.

Investors also want to see cash. BioNtech’s valuation of $41.7 billion is supported by $2 billion of cash and $12 billion in 2021 profit.

What Happens Now

Some analysts are shocked by Novavax’ recent stock performance. Since Novavax is a protein-based vaccine produced in a traditional way, it should be perfect for those who are vaccine-hesitant, they argue. But vaccine hesitancy isn’t only because of how a vaccine is produced. It is an anti-scientific impulse that resists reasoning.

Novavax still has a pipeline of other vaccines. There’s its flu vaccine, dubbed Nanoflu, listed as being in Phase 3 trial. There’s a vaccine for Respiratory Syncytial Virus (RSV), also in Phase 3 trial. But Moderna says it will have a combination vaccine next year that covers both these conditions, as well as the latest Covid-19 strain. Which are you going to take?

Novavax’s claim-to-fame, beyond being a traditional virus maker, was that it has an adjuvant called Matrix-M that can cover more people with less product. But adjuvants themselves are controversial. Matrix-M was a great idea when vaccines were in short supply. They’re not now.

Now that the Covid-19 pandemic is easing, or the virus is at least becoming endemic so that people live with it, critics are having their day. In the case of Novavax, the company is charged with taking cash from groups anxious to vaccinate the developing world, while only sending its vaccine to those who might pay.

The Bottom Line on NVAX Stock

Panic can only last so long before attention moves to other things. In the case of Covid-19, the panic is more or less over even if the pandemic is not.

Novavax is now making money from its vaccine. But it doesn’t have enough cash to justify a higher valuation. Even if it continues its current earnings pace and earns $10 per share this year, the resulting price to earnings ratio of 6 would be in line with that of rival Moderna.

I would rather own Moderna because it has more cash and a bigger pipeline of potential drugs. It also has a unique system for drug discovery, which Novavax lacks. I recently got back into Moderna and I’m showing a loss on that investment. I’m not anxious to repeat the experience with Novavax.

On the date of publication, Dana Blankenhorn held a long position in MRNA. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.