After Novavax (NASDAQ:NVAX) stock jumped at the beginning of June I don’t think that most investors should buy the shares.

Moreover, I urge the owners of the stock to reduce their holdings of it, as I do not think that the shares’ risk-reward ratio is particularly favorable at this point.

Nonetheless, I do still think that Novavax has a good chance of ultimately selling hundreds of millions of doses of its vaccine and that NVAX stock is a decent pick for a certain type of investor.

Whether you’re that type of investor or not has to to with a lot of different factors (and almost certainly the will to accept a lower price for NVAX.

The Baltimore Sun reported that a key Texas plant owned by Novavax’s manufacturing partner, Fujifilm (OTC:FUJTY), suffered delays earlier this year as it was receiving Novavax’s technology.

In March the FDA checked the site and found it to be overcrowded and unorganized. The regulatory body worried the operator wasn’t following proper cleaning procedures and raised questions about why there was a backlog of batches.

Fujifilm committed to fixing the problems in April and May, but the Texas site has not been able to produce as many vaccines as had been expected.

A Novavax spokesman said that the problems in Texas had not delayed its rollout of the vaccine. Adding that its plant in North Carolina is responsible for producing the doses that the company expects to initially supply to the U.S. government.

Meanwhile, Novavax has also faced challenges with acquiring enough raw materials to manufacture the vaccine. The company had initially said that it would seek FDA approval earlier this year delayed that goal.

Last month, The Sun, after speaking with Novavax executives, stated that “Novavax does not plan to file for regulatory authorizations until late July at the earliest.”

As of this writing, the FDA is still waiting for files from Novavax.

An Alternative to mRNA Shots

Despite its supply-chain issues and delays, Novavax has a lot going for it. For one thing, its vaccine has consistently been effective against the coronavirus in trials.

In its initial trials, Novavax’s shot demonstrated 100% protection against moderate and severe disease, and 90.4% efficacy overall. In a subsequent trial, the vaccine was nearly 90% effective in the UK overall at a time when the Alpha variation was circulating in that nation.

It appears that the shot has not been tested against the Delta variant. However, Motley Fool contributor Keith Speights, who has been a consultant and manager in the healthcare sector, thinks that the vaccine could prove to be highly effective against the delta variant.

Indeed, the fact that it appears to be effective against the Alpha variant suggests that its efficacy against Delta could also be strong, and the company has deals with multiple countries as well as with COVAX, the organization that’s going to supply coronavirus vaccines to multiple countries in the world.

For example, an organization called Gavi, the Vaccine Alliance agreed in May to buy 350 million doses on behalf of COVAX, Australia has ordered 512 million doses, and the U.S. has ordered $1.6 billion of the company’s vaccine.

Research firm GlobalData predicted several months ago that Novavax’s vaccine would generate $1.8 billion of sales this year and $33.3 billion in total through 2027.

“While the U.S. might not see much uptake, this vaccine is a much-needed weapon to end the pandemic battle on a global level,” the firm stated.

The NVAX Difference

Unlike Ocugen (NASDAQ:OCGN) and its partner, Bharat Biotech, Novavax has definitely worked very closely with the U.S. government and appears to have met all of the FDA’s criteria.

As a result, I believe that the FDA will approve Novavax’s vaccine and decline to approve Covaxin, the shot that Ocugen is marketing. The FDA approval, in turn, will spur many other nations to approve and accept Novavax’s shot.

Moreover Novavax, unlike Ocugen, already has multiple, lucrative deals for its jab.

Novavax can market its vaccine to any country it wants, while  Ocugen can only obtain revenue from the U.S. and Canada. In both of the latter nations, the majority of eligible citizens have been vaccinated already.

Many owners of OCGN stock have complained about what they see as the shortcomings of the mRNA shot and have said that the U.S. needs an alternative to the mRNA vaccines. I understand their concerns.

But I believe that America has chosen Novavax’s shot, which is based on much older, better-tested technology than the mRNA jabs, to be a key alternative to the latter shots. Conversely, as shown by its rejection of Ocugen’s Emergency Use Authorization for Covaxin, the FDA is not interested in that vaccine.

The Bottom Line on NVAX Stock

An analyst who’s bullish on Novavax’s shot expects the jab to generate $33 billion over the next seven years. That works out to an average of $4.7 billion per year, while NVAX stock is trading at a market capitalization of $13.75 billion.

I’m not willing to pay three times the sales estimate of a bullish analyst for NVAX stock at this time. That’s mainly because I think that, although Novavax could meet that estimate by selling its vaccine to many nations around the world, I would not be surprised manufacturing problems prevent it from hitting its goals.

But for investors who are very skeptical about the mRNA vaccines and are looking for an “anti-mRNA” stock, I see NVAX stock as a decent name to buy.

If world opinion does turn against the mRNA shots, I expect Novavax to be a major beneficiary of such a development.

On the date of publication, Larry Ramer held a short position in OCGN. 

Larry has conducted research and written articles on U.S. stocks for 14 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Among his highly successful contrarian picks have been solar stocks, Roku, and Snap. You can reach him on StockTwits at @larryramer. Larry began writing columns for InvestorPlace in 2015.