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By Sneha S Ok and Sriparna Roy
(Reuters) -Shah Capital, Novavax’s second-largest shareholder, is urgent the biotech’s board to pursue strategic modifications, together with a possible sale, and warned it may launch a proxy combat if no progress is made within the subsequent 4 months.
In a second letter to Novavax’s board in lower than a month, shared solely with Reuters on Wednesday, Shah Capital stated it has turn out to be “more and more disenchanted” with the corporate’s weak COVID-19 vaccine gross sales.
“If I do not see modifications occurring, and if the corporate would not observe by within the subsequent 4 months, then I feel that’s undoubtedly a possible for a proxy combat,” hedge fund founder Himanshu Shah stated in an interview.
The fund stated it nonetheless believes in Novavax’s science and has elevated its stake to about 8.3%, up from 7.2% in October.
Nevertheless, it stated it stays “at a whole loss” over the disappointing gross sales of Novavax’s protein-based COVID-19 vaccine and is annoyed 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 yr, following Novavax’s licensing cope with Sanofi.
“It’s cheap to query whether or not Novavax and its companion are exhibiting a profound lack of competence or deliberately underperforming,” the letter stated.
Novavax’s vaccine offered about 120,000 doses as of October 31, through the 2025-26 season that began in August, versus 14.5 million doses offered in the identical interval by two rivals, leaving Novavax’s market share at about 0.8%, the letter stated.
“Regardless of sturdy underlying science and evident market want, the disconnect between potential and execution is hanging,” the hedge fund stated in its letter.
Earlier this month, Novavax pushed again its profitability goal by a yr to 2028.
Novavax has a excessive price base, must be operationally worthwhile subsequent yr and ought to run extra complete trials, Shah stated.
Shah values the corporate at $5 billion to $10 billion. Novavax’s market capitalization is about $1.21 billion, in accordance with LSEG information.
The fund urged the board to right away type a committee to judge a sale and rent a certified funding financial institution.
Shah has beforehand named Sanofi, Merck, GSK and AstraZeneca as potential consumers, however stated he has not contacted them.
(Reporting by Sneha S Ok and Sriparna Roy in Bengaluru; Enhancing by Tasim Zahid)
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