Shah Capital renews pressure on Novavax board, saying the biotech’s underperformance calls for a strategic sale to unlock value.
Raleigh, N.C., –based hedge fund Shah Capital has urged Novavax’s board to explore a potential sale of the biotech company, citing what it called a third consecutive year of disappointing performance for its COVID-19 vaccine.
In a letter to the board, Shah Capital, Novavax’s second-largest shareholder, argued that the company’s strengths would “have far greater potential in the hands of a large, capable pharma entity,” reiterating its call for a strategic sale.
The story was first reported by Reuters.
Himanshu Shah, founder and chief investment officer of Shah Capital, told the news agency that Novavax could achieve a valuation of “at least $5 billion” given the commercial prospects of its vaccines. He added that the “political picture” and scientific evidence were working in the company’s favor.
The company holds a 7.2% ownership stake in Novavax, which is based in Gaithersburg, MD.
Novavax currently has a market value of roughly $1.35 billion, according to LSEG data.
READ: Activism and Alpha: Himanshu Shah’s blueprint for long-term success at Shah Capital (October 14, 2024)
Shah Capital’s recent push marks its second effort to influence the company’s direction. Last year, the fund paused its campaign opposing the re-election of three Novavax board members after the biotech finalized a licensing agreement with Sanofi.
“The problem has been the sales,” Shah told Reuters.

In his letter, Shah attributed Novavax’s protein-based COVID-19 vaccine, Nuvaxovid, capturing just 2% of the market last season to a string of critical marketing missteps. And as of October 2, Novavax had only administered roughly 7,000 doses of its vaccine, compared with nearly 6 million shots distributed by mRNA competitors Pfizer and Moderna, which Shah described as deeply disappointing.
Shah argued that with the right marketing strategy, Novavax’s market share could reach 40%, given what he described as its superior science.
Shah identified Sanofi, Merck, GSK, and AstraZeneca as potential buyers for Novavax, while clarifying that he has not engaged directly with any of these companies.
Novavax’s protein-based vaccine received FDA approval in May, though its use was restricted to older adults and at-risk individuals aged 12 and above similar to its competitors’ vaccines.
Himanshu Shah founded Shah Capital in 2005, and the fund recently marked its 20th anniversary. Over the past two decades, Shah Capital has earned a name as an activist investor.
Shah Capital, with $800 million of assets employs a valuation-driven strategy, focusing on identifying undervalued companies and advocating for strategic changes to unlock shareholder value.
In an interview with The American Bazaar, Shah, who serves as the chief investment officer of Shah Capital, shared insights into his approach as an activist investor. He explained that public activism can serve as a tool to unlock a company’s true value, particularly when boards and management resist constructive dialogue despite significant underperformance.
Still, Shah Capital, as a long-term shareholder, generally favors a more collaborative approach: what Shah calls “Suggestivism”, engaging in thoughtful discussions with management to add value through their deep understanding of both the sector and capital markets. Public activism is only pursued as a last resort, given the time and resources it demands from all parties involved.

