In May 2024, Shah Capital, a hedge fund in North Carolina, withdrew from its proxy fight against Novavax’s board of directors when the vaccine maker announced a billion-dollar deal with Sanofi. At the time, Shah Capital signaled that backing down “does not mean our engagement is at an end.”
Sure enough, less than two years later, the activist investment firm continues to be a headache. Earlier this month, Himanshu Shah, founder of the eponymous Shah Capital, fired off a letter signaling deep dissatisfaction with the Gaithersburg, Maryland company’s financial performance.
“As a large and long-term 9% shareholder, we are writing to formally notify you of our intent to vote AGAINST the re-election of board nominees and AGAINST the executive compensation package at the upcoming 2026 Annual Meeting. Your tenure has overseen a DESTRUCTION of shareholder value — a direct result of chronic operational shortcomings and failures on fiduciary duty,” Shah’s letter, dated April 8, read.
The letter highlighted several failures including the following:
- Novavax’s 2024 Sanofi partnership is not yet fruitful — in fact, Shah said that last year’s meager $22 million sales of Nuvaxovid, the non-mRNA Covid vaccine, which Sanofi took over after the 2024 agreement, is “unfathomable” and “unacceptable.”
- The company has not controlled costs and issued a pessimistic 2026 revenue outlook.
- Novavax suffers from low institutional credibility leading many investors to hold short positions on its stock, despite the company’s partnerships with Pfizer and Sanofi.
But is the criticism fair?
After all, Novavax — whose stock price has plummeted to under $10 from a high of about $290 in 2021 — is not the only Covid vaccine maker that has wrestled with lower demand for its product. Moderna, which became a household name during the pandemic for its mRNA vaccine, saw its stock price swoon from a whopping $450 in 2021 to the mid-$20 range in late 2025, though the share price has since doubled to more than $50. BioNTech, which collaborated with Pfizer on their Covid mRNA vaccine, saw its stock price drop from $389 in 2021 to nearly $80 in 2025, before regaining some steam — it trades over $100 today. Despite the latter two company’s stock price is far off from their pandemic-prompted highs, no activist investor is attacking Moderna or BioNTech — at least not publicly.
One Wall Street analyst who has a “buy” rating on Novavax’s stock conceded that Shah’s criticisms are not unfounded though he didn’t fully agree with all the criticisms.
“You’ve seen Moderna’s stock price, you’ve seen BioNTech,” said Mayank Mamtani, senior vice president and group head of healthcare at B. Riley Securities in an interview last week. “But again, Moderna and BioNTech have pivoted. Now they’re pipelines to oncology. And we have a very actionable catalyst for both those companies. And that is not the case — I think that is where the disconnect is with Novavax.”
He added that Novavax has good partnerships with Pfizer and Sanofi but there isn’t great visibility with how things are progressing there. Sanofi has licensed Novavax’s Matrix-M technology and is developing the Covid-19-Influenza-Combination (CIC) vaccine. Mamtani said that Sanofi has publicly said that the the CIC vaccine will be one of the company’s top three products that could in the future help to offset sales of its blockbuster drug Dupixent when the expected loss of exclusivity occurs. Novavax stands to get royalties from the sale of this vaccine once clinical trials are done and the product is commercialized with FDA’s blessing.
“But [Sanofi has] not made any such announcements that we’re going to Phase 3 and we are going to provide data next year, [or] we’re going to file,” he said. “So that’s what we are waiting for. That’s the big catalyst.”
In fact, in his April 9 research note, Mamtani stressed that once Sanofi provides input on Phase 3 study design and execution, Novavax will be able to earn a $125 million milestone payment as per their agreement. But when Sanofi obliges the market with this information is that company’s prerogative — which, as Mamtani noted, is “largely independent of Novavax’s governance situation.”
This notwithstanding, does he agree with Shah’s call for changes to the board? In his letter, Shah recommended Novavax’s board size be reduced to five members from eight. He also urged the election of “new members with emphasis on pragmatic entrepreneurial experience” to turn around the financial fortunes of Novavax.
“I think the governance can improve,” Mamtani said.
He wouldn’t comment on individual directors but implied fresh blood was needed. In his letter, Shah went so far as to say that Novavax’s current equity valuation “shows that its leadership is pursuing tenures and not shareholder value.” Now, to be fair to Novavax, the company did add two members to its board in 2025, though one director, Richard Douglas, has held a board seat for more than a quarter of a century.
While tacitly agreeing with Shah on the make-up of the board, Mamtani, who has a price target of $18 for Novavax’s stock, disagrees with Shah on cost-cutting.
“I’ll be fair, Himanshu is pushing them to cut costs, but they’ll lose good talent … especially when they’re trying to portray a good image to Pharma that they’re a stable company,” Mamtani declared, noting the relationships with partners like Sanofi and Pfizer. “The core DNA of the company is damaged, and it becomes a dysfunctional organization.”
But ultimately, he does believe Novavax’s stock price will go up, even if slower than what Shah would like to see. For the time being, Mamtani is reassured by the recent R&D leadership consolidation under Dr. Robert Walker that will reduce costs.
Photo: champc, Getty Images
