(Reuters) – Hedge fund Shah Capital on Monday urged Novavax shareholders to vote against the re-election of three directors and proposals related to executive pay, intensifying its push for a shake-up of the vaccine maker’s board against COVID-19.
Shah Capital, which currently owns nearly 7.5% of Novavax’s capital and is the third largest shareholder, reiterated that the company is “undervalued and continues to suffer from low profitability.”
The largest shareholder had expressed concerns about mismanagement at the Maryland-based biotech company and named two of its own nominees to the board last month. He had also urged Novavax to adopt a marketing strategy aimed at targeting consumers who are hesitant to receive mRNA vaccines.
The hedge fund said in a regulatory filing Monday that it plans to vote against directors Richard Douglas, Margaret McGlynn and David Mott at Novavax’s next shareholder meeting in June.
“We believe new perspectives are desperately needed on the board to guide Novavax towards sustainable and profitable growth,” he said in a statement.
Novavax had raised doubts about its ability to stay in business last year. The biotech has missed out on the pandemic bonanza enjoyed by its mRNA-based rivals as manufacturing issues and regulatory delays have limited its potential to bring its protein-based vaccine to market in a timely manner.
McGlynn and Mott have served on the board of directors of Novavax since 2020 and of Douglas since 2010.
Shah Capital also plans to vote against three other proposals, including one that concerns compensation for certain Novavax executives.
Novavax did not immediately respond to a Reuters request for comment.
In April, Shah Capital named Suresh Katta, founder and CEO of biotech company Saama, and Venkat Peri, CEO of Quantiva Health, to Novavax’s eight-member board, saying the duo had the experience necessary to define the strategic direction of the company.
(Reporting by Bhanvi Satija in Bangalore; Editing by Shilpi Majumdar)
