Novavax Faces Pressure from Second-Largest Shareholder Shah Capital
In a recent development, Shah Capital, the second-largest shareholder of Novavax, is urging the biotech company’s board to consider strategic changes, potentially including a sale. The firm has warned that if no progress is made within the next four months, they may launch a proxy fight to push for these changes.
Shah Capital, in a second letter to Novavax’s board, expressed disappointment with the company’s weak sales of its COVID-19 vaccine. The hedge fund founder, Himanshu Shah, stated in an interview that if significant changes are not implemented within the specified timeframe, a proxy fight is a definite possibility.
Despite their concerns, Shah Capital reiterated their belief in Novavax’s scientific capabilities by increasing their stake in the company to approximately 8.3%. However, they remain baffled by the underwhelming sales performance of Novavax’s protein-based COVID-19 vaccine and its minimal market share.
The activist investor highlighted the significant gap between Novavax’s potential and its actual performance. This latest push for change comes after Shah Capital withdrew a campaign against three board directors last year following Novavax’s licensing deal with Sanofi.
Novavax’s vaccine reportedly sold only 120,000 doses during the 2025-26 season, compared to 14.5 million doses sold by its competitors. This disparity has left Novavax with a market share of just 0.8%, a fact that has further fueled Shah Capital’s concerns.
The fund stressed the necessity for Novavax to achieve operational profitability next year, given its high cost base and the need for more extensive trials. Shah Capital values the company at $5 billion to $10 billion, significantly higher than its current market capitalization of $1.21 billion.
Shah Capital urged Novavax’s board to establish a committee to assess the possibility of a sale and engage a reputable investment bank for guidance. While Shah has identified potential buyers like Sanofi, Merck, GSK, and AstraZeneca, no formal contact has been made with them.
In conclusion, the pressure from Shah Capital underscores the urgent need for Novavax to address its operational challenges and unlock its full potential. The company must carefully consider the recommendations put forth by its second-largest shareholder to ensure long-term success and shareholder value.
(Reporting by Sneha S K and Sriparna Roy in Bengaluru; Editing by Tasim Zahid)
