By Sneha SK and Sriparna Roy
(Reuters) -Shah Capital, Novavax’s second-largest shareholder, is pressing the biotech’s board to make strategic changes, including a possible sale, and warned it could launch a proxy fight if no progress is made in the next four months.
In a second letter to Novavax’s board in less than a month, shared exclusively with Reuters on Wednesday, Shah Capital said it was “increasingly disappointed” with the company’s weak sales of COVID-19 vaccines.
“If I don’t see changes coming, and if the company doesn’t deliver in the next four months, then I think there’s definitely a possibility of a proxy fight,” hedge fund founder Himanshu Shah said in an interview.
The fund said it still believes in Novavax’s science and has increased its stake to about 8.3%, up from 7.2% in October.
However, he said he remains “completely lost” over disappointing sales of Novavax’s protein-based COVID-19 vaccine and is frustrated by its paltry market share.
DISCONNECT BETWEEN POTENTIAL AND EXECUTION
This marks another push by the activist investor for change after it withdrew a campaign against three board directors last year following Novavax’s licensing deal with Sanofi.
“It is reasonable to question whether Novavax and its partner are showing a profound lack of competence or whether they are intentionally underperforming,” the letter said.
Novavax’s vaccine sold about 120,000 doses as of Oct. 31, during the 2025-26 season that began in August, compared with 14.5 million doses sold in the same period by two competitors, leaving Novavax’s market share at about 0.8%, according to the letter.
“Despite the strong scientific foundation and evident market need, the disconnect between potential and execution is striking,” the hedge fund said in its letter.
Earlier this month, Novavax pushed back its profitability target by one year to 2028.
Novavax has a high cost base, needs to be operationally profitable next year and “should do more comprehensive testing,” Shah said.
Shah values the company at between $5 billion and $10 billion. Novavax’s market capitalization is approximately $1.21 billion, according to LSEG data.
The fund urged the board to immediately form a committee to evaluate a sale and hire a qualified investment bank.
Shah previously named Sanofi, Merck, GSK and AstraZeneca as “potential buyers” but said he had not contacted them.
(Reporting by Sneha SK and Sriparna Roy in Bengaluru; Editing by Tasim Zahid)