By Sneha S Okay and Sriparna Roy
(Reuters) -Shah Capital, Novavax’s second-largest shareholder, is urgent the biotech’s board to pursue strategic adjustments, together with a possible sale, and warned it may launch a proxy struggle if no progress is made within the subsequent 4 months.
In a second letter to Novavax’s board in lower than a month, shared completely with Reuters on Wednesday, Shah Capital mentioned it has change into “more and more disenchanted” with the corporate’s weak COVID-19 vaccine gross sales.
“If I do not see adjustments occurring, and if the corporate would not comply with via within the subsequent 4 months, then I believe that’s positively a possible for a proxy struggle,” hedge fund founder Himanshu Shah mentioned in an interview.
The fund mentioned it nonetheless believes in Novavax’s science and has elevated its stake to about 8.3%, up from 7.2% in October.
Nevertheless, it mentioned it stays “at a whole loss” over the disappointing gross sales of Novavax’s protein-based COVID-19 vaccine and is pissed off by its negligible market share.
DISCONNECT BETWEEN POTENTIAL AND EXECUTION
This marks one other push from the activist investor for change after it withdrew a marketing campaign towards three board administrators final 12 months, following Novavax’s licensing cope with Sanofi.
“It’s cheap to query whether or not Novavax and its associate are exhibiting a profound lack of competence or deliberately underperforming,” the letter mentioned.
Novavax’s vaccine bought about 120,000 doses as of October 31, in the course of the 2025-26 season that began in August, versus 14.5 million doses bought in the identical interval by two rivals, leaving Novavax’s market share at about 0.8%, the letter mentioned.
“Regardless of robust underlying science and evident market want, the disconnect between potential and execution is hanging,” the hedge fund mentioned in its letter.
Earlier this month, Novavax pushed again its profitability goal by a 12 months to 2028.
Novavax has a excessive price base, must be operationally worthwhile subsequent 12 months and ought to run extra complete trials, Shah mentioned.
Shah values the corporate at $5 billion to $10 billion. Novavax’s market capitalization is about $1.21 billion, in line with LSEG information.
The fund urged the board to instantly type a committee to judge a sale and rent a professional funding financial institution.
Shah has beforehand named Sanofi, Merck, GSK and AstraZeneca as potential consumers, however mentioned he has not contacted them.
(Reporting by Sneha S Okay and Sriparna Roy in Bengaluru; Enhancing by Tasim Zahid)