Activist investor Shah Capital has announced its intention to vote against the re-election of Novavax’s board members and its executive compensation plan at the biotech’s forthcoming annual meeting, escalating pressure on the vaccine maker for strategic changes, according to a. Report by Reuters.
The report cites a letter from the hedge fund’s founder Himanshu Shah as calling on Novavax to reduce operational costs and consider repurchasing 10–20 million shares. The fund, which holds a 9% stake in the company and is Novavax’s second-largest shareholder, has also suggested bringing in a long-term strategic investor with a 10–20% stake to help reshape the firm.
Novavax, in a statement, emphasised its ongoing investment in research and development while continuing to implement cost-saving measures. The company highlighted partnerships with Pfizer and progress toward collaboration with Sanofi, despite delays in Sanofi’s late-stage results for the COVID/influenza combination vaccine, a market estimated at over $5 billion.
Shah criticised the current management, calling for a 30% reduction in senior leadership and a board downsizing from eight to five members. While he previously hinted at a potential proxy fight if progress stalled, Shah clarified he is not pursuing one at present, citing the entrenched board structure.
“The leadership’s strategic approach lacks conviction,” Shah said, pointing to debt management issues and urging proxy advisory firms ISS and Glass Lewis to reconsider their recommendations in favour of the board.
Shares of Novavax rose 4% to $8.32 following the announcement.
