Dive Brief:
- Shah Capital is renewing its fight to revamp the leadership of Novavax, saying the current board has overseen a “destruction of shareholder value.”
- In a letter Wednesday, managing partner Himanshu Shah said Novavax’s management team and board should be reduced and advocated for the election of new directors that can turn the company into “an equity success story.” He said he’s not starting a proxy fight because he knows his firm will be in the minority “against an entrenched eight-member board.”
- Shah Capital, which owns 9% of Novavax’s stock, will vote against the re-election of board nominees and the executive compensation package at the upcoming annual meeting. And Shah made an appeal to proxy advisory firms ISS and Glass Lewis to review his firm’s research and conclusions on Novavax before making their own recommendations.
Dive Insight:
As in past campaigns against Novavax’s leadership, Shah zeroed in on missed opportunities. The company’s COVID-19 vaccine offers best-in-class potential as a non-mRNA shot and its underwhelming sales are “unfathomable and frankly unacceptable,” Shah said.
The vaccine, Nuvaxovid, won Food and Drug Administration clearance well after the Pfizer-BioNTech and Moderna mRNA inoculations were entrenched in the market. It uses a more traditional approach that’s expected to hold appeal for people who were hesitant about mRNA — a technology that has been repeatedly attacked by health officials in the second Trump administration.
But Novavax was never able to catch up in the COVID-19 market, which saw sales drop dramatically with the end of the pandemic. And shares of the Maryland biotech, which soared above $270 in September 2021, cratered in 2022 and have remained largely flat since. Early Wednesday, the stock traded at just over $8 per share.
Shah said the company has made misstep after misstep in financial maneuvering, cost cutting and research spending. The loss of shareholder value is “a direct result of chronic operational shortcomings and failures on fiduciary duty,” he said.
Novavax got a lifeline in 2024 when it signed a partnership with vaccine powerhouse Sanofi. Last year, the company won a full FDA approval for Nuvaxovid. But the Sanofi linkup has failed to provide benefits so far and the companies aren’t aiming high enough for their vaccine, Shah said. The target U.S. market share for Nuvaxovid this year should be more than 30%, not less than 10%, he said.
Shah is advocating a 30% cut in the Novavax management team and a reduction of the board from eight to five members, especially as the company moves more into a partnering model with Sanofi and a recent deal with Pfizer. “There is no justification for a top-heavy roster of senior executives and/or an eight-member board to manage a largely passive stream of royalty and partnership revenues,” he wrote.
Shah has unsuccessfully tried to push out board members before and in October 2025 advocated for a sale of the company. In the latest letter, Shah said his firm would like to see a “like-minded strategic long-term investor” take as much as a 20% ownership position “to reshape Novavax entirely.”
