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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 adjustments, together with a possible sale, and warned it may launch a proxy battle 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 mentioned it has grow to be “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 observe by means of within the subsequent 4 months, then I feel that’s undoubtedly a possible for a proxy battle,” 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.
Nonetheless, it mentioned it stays “at an entire 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 mentioned.
Novavax’s vaccine offered about 120,000 doses as of October 31, throughout 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 mentioned.
“Regardless of sturdy underlying science and evident market want, the disconnect between potential and execution is putting,” the hedge fund mentioned in its letter.
Earlier this month, Novavax pushed again its profitability goal by a yr to 2028.
Novavax has a excessive value base, must be operationally worthwhile subsequent yr 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 keeping with LSEG knowledge.
The fund urged the board to instantly kind 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 mentioned he has not contacted them.
(Reporting by Sneha S Ok and Sriparna Roy in Bengaluru; Enhancing by Tasim Zahid)
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