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.
In a letter to the company on Wednesday, hedge fund founder Himanshu Shah said management has failed to implement aggressive cost-cutting measures and urged leadership to reduce costs and opportunistically buy back 10–20 million shares.
Shah Capital, which owns 9% of Novavax and is its second-largest shareholder, has been pushing the biotech’s board to pursue strategic changes, including a potential sale.
The firm wants a like-minded strategic long-term investor to take a 10–20% ownership stake to reshape the company.
In the letter, shared exclusively with Reuters, the investment firm said the partnership with Sanofi has not benefited Novavax.
“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.
CALLS FOR MANAGEMENT CHANGE
The hedge fund-founder 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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