Novavax critic Shah Capital ends its activism campaign

Shah Capital has ended its attempts to exert influence over vaccine developer Novavax, bringing more than years of activism and pressure on management to an end.

The change in policy – reported by Reuters – comes after the hedge fund restructured into a family office (Himanshu Shah Family Office LLC) and withdrew its registration as an investment advisor.

Shah Capital has been a thorn in the side of Novavax since 2024, when it first sought a change in leadership at the Gaithersburg, Maryland-based company after taking a 6.7% stake. That followed a difficult period for Novavax in which, like other companies developing COVID-19 vaccines, it faced a steep decline in demand for its Nuvaxovid/Covovax shot.

The product was delayed on its way to market so missed out on the bonanza that drove multibillion-dollar sales of mRNA shots from Pfizer/BioNTech and Moderna during the pandemic, and struggled to build sales momentum as the impetus for COVID-19 vaccination waned.

Shah Capital tried to get handpicked investors appointed to Novavax's board, lobbied against the re-election of other directors and executive pay packages, and claimed that the company was being hamstrung by an overly conservative board and management that was clinging to "failed strategies."

Other criticisms included that Novavax was failing to take advantage of hesitancy about mRNA technologies with its vaccine, which is based on conventional protein-based technology, and not making the most of its Matrix-M vaccine adjuvant technology.

Shah Capital's founder, Himanshu Shah, had been pushing for Novavax to be taken over by a larger pharma group.

Criticism by the hedge fund was toned down after Novavax announced a $1.2 billion partnership with Sanofi, in which the big pharma group licensed joint commercial rights to Novavax's COVID-19 vaccine for $500 million upfront and said it will work with the biotech on the development of combined flu/COVID shots – and take a non-exclusive license to Matrix-M.

However, in April this year, Shah Capital fired another broadside at Novavax, reiterating many of its former gripes as well as delays to the combined flu/COVID shot programme, and sought support from shareholders.

In its second-quarter results update, Novavax said the flu/COVID shot is being prepared for a phase 3 trials programme that could make it "among the first movers in the combination vaccine segment."

It is also in line for a $75 million payment from Sanofi next year, related to a manufacturing technology transfer for Nuvaxovid, and intends to start trials of a vaccine candidate for Clostridium difficile in 2027.