Top Novavax Shareholder Demands Company’s Sale

Novavax’s Covid-19 vaccine is highly effective, but the stock is down more than 30% over the past 12 months. (Carsten Koall/Getty Images)

Key Points

• Novavax, despite having the only approved non-mRNA Covid-19 vaccine in the U.S., has seen its stock decline over 30% in the past 12 months.
• Shah Capital, Novavax’s second-largest shareholder, is urging the company’s board to pursue a sale due to disappointing vaccine sales.
• Novavax’s Covid-19 vaccine sales were $1.6 billion in 2022, significantly less than Moderna’s $18.4 billion in the same period.

It should be a great time to be the vaccine maker Novavax . As the Trump administration and its public health appointees have turned firmly against messenger RNA-based vaccines, Novavax still sells the only approved non-mRNA Covid-19 shot in the U.S.

What is more, that shot is very good. A recent study confirmed that Novavax’s Covid-19 vaccine caused fewer and less severe reactions than Pfizer’s , and earlier trials have found it to be roughly 90% effective at preventing Covid-19.

Yet all is not well for the vaccine maker. The stock is down more than 29.7% over the past 12 months, and there is no sign that sales of its Covid-19 shot are trending any better this fall than they were last year, when the vaccine was a nonentity in the race with Moderna and Pfizer.

Now, the biotech’s second-largest shareholder is calling for a big drugmaker to put Novavax out of its misery.

In a fiery letter to Novavax’s board issued on Tuesday, Himanshu Shah, managing partner and chief investment officer at Shah Capital, slammed Novavax management, and said the company should sell itself.

“The science of Novavax is really good,” Shah told Barron’s on Tuesday. “They should have thirty, forty, fifty percent market share.”

Shah wrote in his letter that as of early October, makers of mRNA-based Covid-19 vaccines had already had roughly 6 million doses of their updated shots administered this fall. For Novavax’s Nuvaxovid, he said, the number was only around 7,000.

Sales thus far this fall have been “pathetic,” Shah told Barron’s.

“Shah Capital finds it unfathomable why Nuvaxovid’s market share once again is non-existent given the scientific superiority… and positive regulatory tailwinds,” Shah wrote in his Tuesday letter to the Novavax board. He wrote that the board should sell the company, and that its intellectual property and science will be worth more “in the hands of a large capable pharma entity.”

Novavax’s market value is $1.4 billion, but Shah told Barron’s he thinks that the company is “worth at least $5 billion, if not a little more, today.”

Novavax shares were up 3% on Tuesday. In a statement, Novavax said that it is “committed to creating long-term value,” and that the board “firmly believes that continuing to execute our corporate strategy is the best path forward, while remaining open to other credible pathways that would maximize shareholder value.”

The company didn’t respond to a request for comment about sales of this fall’s Covid-19 shots.

Shah Capital is Novavax’s largest shareholder after Vanguard, which operates a number of index funds that hold the stock. Shah has proposed changes at Novavax before: Last year, he threatened a proxy fight, proposing his own candidates for Novavax’s board before eventually reaching an agreement with management.

Novavax has been a long-term source of frustration for investors. The company reported strong efficacy data early in the Covid-19 pandemic, and appeared to be a serious threat to the leading shots from Moderna and Pfizer. Novavax shares climbed more than 7,000% from the start of 2020 through the biotech market’s peak in early February of 2021.

The stock topped out at more than $315, before crashing. It hasn’t closed above $21 since 2022, and closed Monday at $8.62.

Some of the problems dragging on the stock have been the same facing other Covid-19 vaccine makers. Demand for Covid-19 vaccines dried up much faster than expected, leaving companies such as Moderna with excess manufacturing capacity and shrinking revenue.

For Novavax, though, there were deeper issues. The rollout of its shots was slow and troubled, dogged by manufacturing issues and other problems. While Moderna exited the pandemic with an enormous windfall from vaccine sales in 2021 and 2022, Novavax largely missed out.

Sales of Novavax’s Covid-19 vaccine were just $1.6 billion in 2022, a year in which Moderna reported $18.4 billion in Covid-19 vaccine revenue. Only 70,000 doses of its vaccines were administered in the U.S. by early 2023.

In 2024, Novavax’s revenue was just $190 million. In May of that year, Novavax announced a deal aimed at shoring up its financial situation.

Sanofi , the French drugmaker, agreed to work with Novavax on selling its Covid-19 vaccine. Sanofi now books sales of the shot, and is preparing to take on manufacturing. “It was a good deal for the company and the shareholder,” Shah acknowledged.

Now, though, he says sales thus far this fall show more must be done. He is also critical of a debt refinancing the company undertook in August. He says that the combination influenza/Covid-19 shot the company is developing could be very valuable, and that there is significant demand for a non-mRNA Covid-19 shot.

“Novavax shareholders deserve meaningful urgent action to reverse Novavax’ trajectory as one of the worst-performing pharma/biotech stocks of the past decade,” he wrote in his letter.

Write to Josh Nathan-Kazis at josh.nathan-kazis@barrons.com