Novavax (NASDAQ:NVAX) stock has dropped to a 52-week low amid fears that the Food and Drug Administration will tighten up vaccine distribution policies. A meeting will be held today in which it will be discussed how vaccine makers could articulate their products to circumstances. The FDA is seeking a more proactive solution from vaccine manufacturers that caters to the requirements of specific variants, rather than broad-based protection. According to slides posted ahead of the meeting, there’s a 20% likelihood that an “omicron-like” variant could strike this year, requiring a retooling of vaccine booster shots. A more carefully articulated plan would raise the barriers to entry for vaccine makers and subsequently adjust the risk-return profile of Novavax stock.

I find it difficult to comprehend how Novavax will be able to compete with the likes of Pfizer (NYSE:PFE), Johnson & Johnson (NYSE:JNJ), and Moderna (NASDAQ:MRNA). Its protein-based vaccine is effective but holds a less impressive profile than vaccines from the market’s frontrunners. 

With higher research & development costs to simply keep vaccines up to date with new varients and the FDA concerned about readiness should another omicron varient surge, I can’t see Novavax keeping up with the big guys.

Let me contextualize my argument by looking at a few critical data points. The company’s EBITDA margin has decreased by 1.46x during the past year, while its cash on hand has also decreased by 26.98% during the same period, suggesting that its spending power is eroding significantly. Furthermore, NVAX’s business model heavily relies on the covid-19 vaccine program as a means of future income. I thus see this as a very risky asset as it doesn’t hold a diversified portfolio of products like Pfizer and Johnson & Johnson.

Stock market participants clearly haven’t shown much interest in NVAX stock lately as its trading below its 10-, 50-, 100-, and 200-day moving averages. Momentum patterns require a catalyst to reverse, and I just don’t see that happening for Novavax anytime soon.

On the date of publication, Steve Booyens did not hold any position (either directly or indirectly) in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.