In May 2024, Shah Capital, a North Carolina hedge fund, withdrew from his proxy fight against Novavax board when vaccine maker announced a billion-dollar deal with Sanofi. At the time, Shah Capital signaled that stepping back “does not mean our commitment is over.”
Indeed, less than two years later, the activist investment company continues to pose a problem. Earlier this month, Himanshu Shah, founder of the eponymous company Shah Capital, drew a letter signaling deep dissatisfaction with the Gaithersburg, Maryland, company’s financial performance.
“As a large, long-term 9% shareholder, we write to formally inform you of our intention to vote AGAINST the re-election of the 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 deficiencies and breaches of fiduciary duty,” read Shah’s letter, dated April 8.
The letter highlighted several failures, including the following:
- Novavax’s partnership with Sanofi for 2024 is not yet fruitful – in fact, Shah said last year’s meager sales of Nuvaxovid, the mRNA-free Covid vaccine, of $22 million, which Sanofi took over after the 2024 deal, are “unfathomable” and “unacceptable.”
- The company failed to control its costs and issued a pessimistic revenue outlook for 2026.
- Novavax suffers from low institutional credibility, leading many investors to hold short positions in its shares, despite the company’s partnerships with Pfizer and Sanofi.
But is the criticism fair?
After all, Novavax — whose stock price has fallen to less than $10 from a 2021 high of around $290 — is not the only Covid vaccine maker to have struggled with declining demand for its product. Moderna, which became a household name during the pandemic for its mRNA vaccine, saw its stock price fall from $450 in 2021 to around $20 by the end of 2025, although the stock price has since doubled to over $50. BioNTech, which collaborated with Pfizer on its mRNA Covid vaccine, saw its share price fall from $389 in 2021 to almost $80 in 2025, before regaining some strength – today it trades at over $100. Although the stock prices of the latter two companies are far from their pandemic-induced highs, no activist investors are attacking Moderna or BioNTech — at least not publicly.
A Wall Street analyst who has a “buy” rating on Novavax’s stock acknowledged that Shah’s criticisms are not without merit, even if he doesn’t entirely agree with all the critiques.
“You saw the Moderna stock price, you saw BioNTech,” Mayank Mamtani, senior vice president and head of the healthcare group at B. Riley Securities, said in an interview last week. “But again, Moderna and BioNTech have pivoted. They are now pipelines to oncology. And we have a very actionable catalyst for both of those companies. And that’s not the case – I think that’s where the disconnect with Novavax is.”
He added that Novavax has good partnerships with Pfizer and Sanofi, but there isn’t much visibility into how things are progressing in those areas. Sanofi has licensed Matrix-M technology from Novavax and is developing the Covid-19-Influenza-Combination (CIC) vaccine. Mamtani said Sanofi had publicly stated that the CIC vaccine would be one of the company’s three main products that could in the future help offset sales of its blockbuster drug Dupixent when the expected loss of exclusivity occurs. Novavax is expected to receive royalties from the sale of this vaccine once clinical trials are completed and the product is released with the FDA’s blessing.
“But [Sanofi has] we have not announced that we will move to phase 3 and provide data next year, [or] we’re going to file,” he said. “So that’s what we’re waiting for. This is the great catalyst.
In fact, in his April 9 research note, Mamtani highlighted that once Sanofi contributes to the design and execution of the Phase 3 study, Novavax will be able to collect a $125 million milestone payment per their agreement. But when Sanofi forces the market to provide this information, it is that company’s prerogative – which, as Mamtani pointed out, is “largely independent of Novavax’s governance situation.”
Despite this, does he agree with Shah’s call for changes to the board? In his letter, Shah recommended Novavax array size be reduced from eight to five members. He also called for the election of “new members emphasizing pragmatic entrepreneurial experience” to turn around Novavax’s financial situation.
“I think governance can improve,” Mamtani said.
He would not comment on individual directors, but suggested that new blood was needed. In his letter, Shah went so far as to say that the current valuation of Novavax’s stock “shows that its executives are seeking mandates and not shareholder value.” Now, to be fair to Novavax, the company added two members to its board in 2025, although one director, Richard Douglas, has been on the board for more than a quarter century.
While tacitly agreeing with Shah on board composition, Mamtani, who has an $18 price target for Novavax shares, disagrees with Shah on cost cutting.
“I’ll be honest, Himanshu is pushing them to cut costs, but they will lose good talent… especially when they are trying to give a good image to the pharmaceutical industry by showing them that they are a stable company,” Mamtani said, pointing to relationships with partners like Sanofi and Pfizer. “The fundamental DNA of the company is damaged and it becomes a dysfunctional organization. »
But ultimately, he thinks Novavax’s stock price will rise, although it will be slower than Shah would like to see. For now, Mamtani is reassured by the recent Consolidation of R&D leadership under the leadership of Dr. Robert Walker this will reduce costs.
Photo: champc, Getty Images