By Sneha S K and Sriparna Roy
April 8 (Reuters) – Activist investor Shah Capital plans to vote against the re-election of board nominees and the executive compensation package at Novavax’s upcoming annual meeting, renewing pressure for changes at the vaccine maker.
Hedge fund founder Himanshu Shah in a letter on Wednesday, shared exclusively with Reuters, urged leadership to reduce costs and opportunistically buy back 10–20 million shares.
Novavax said in an emailed statement to Reuters it continues to make targeted investments in R&D while continuing to significantly reduce costs. It has also partnered with Pfizer and has continued to make progress on a partnership with Sanofi, it added.
Shares of the vaccine maker were up 4% to $8.32.
Shah Capital, Novavax’s second-largest shareholder with a 9% stake, has been pushing the biotech’s board to pursue strategic changes, including a potential sale. The hedge fund on Wednesday said it wants a like-minded strategic long-term investor to take a 10–20% ownership stake to reshape the company.
“We are both surprised and frustrated” by Sanofi’s continued delay in launching late-stage results for the COVID/influenza combo vaccine, a market worth more than $5 billion, Shah said.
Novavax said it maintains a “constructive dialogue” with shareholders and welcomes collaborative input.
CALLS FOR MANAGEMENT CHANGE
The firm called for the current senior management team to be reduced by 30% while shrinking the board to five members from eight.
“My letter is an indictment of the leadership,” Shah told Reuters in an interview.
In November, Shah told Reuters he could launch a proxy fight if no progress was made over the next four months.
On Wednesday, Shah said he is not instigating a proxy fight “as it will be in the minority against an entrenched eight-member board.”
“There is a strategic lack of conviction here. They should be retiring debt, not adding to convertible debt. Credibility is lost,” Shah added.
The firm urged ISS and Glass Lewis to review their “In Favor” proxy recommendations.
(Reporting by Sneha S K; Editing by Tasim Zahid)
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