So what

Novavax's shares crumbled in September after its lead vaccine candidate for respiratory syncytial virus (RSV) flamed out in a late-stage study assessing its effectiveness in elderly patients. The big issue is that this single indication could have generated billion in sales for the vaccine maker, and most analysts pretty much assumed it would hit the mark in its pivotal trial for older adults based on its encouraging mid-stage results. After this closely watched RSV vaccine candidate totally whiffed in its late-stage trial, however, Novavax was forced to rethink its overall clinical and business strategy -- as evinced by this substantial cut to its workforce.

Now what

Per management's comments yesterday, the company plans to pivot to its RSV vaccine efforts in infants via maternal immunization and double down on its far less advanced Zika virus vaccine candidate to create shareholder value moving forward.

The good news is that Novavax does have the cash runway to execute this plan without having to resort to eye-popping secondary offerings in the near term. After all, the company exited the third quarter with a noteworthy $300.3 million in cash and cash equivalents, and its restructuring efforts should dramatically lower its cash-burn rate in the next few quarters.

The downside, though, is that Novavax's high-value RSV vaccine candidate now looks like an extreme long shot, despite some impressive results in smaller, mid-stage studies. Investors probably shouldn't buy this speculative biotech stock unless they're comfortable with particularly high levels of risk.