*

Shah Capital frustrated with Novavax's ( NVAX ) weak COVID-19

vaccine

sales

*

Hedge fund increases stake to 8.3%, urges sale to large

pharma

*

Novavax's ( NVAX ) COVID vaccine sales lag behind competitors

(Updates November 12 story to include company's response in

paragraph 5)

By Sneha S K and Sriparna Roy

Nov 13 (Reuters) - Shah Capital, Novavax's ( NVAX )

second-largest shareholder, is pressing the biotech's board to

pursue strategic changes, including a potential sale, and warned

it could launch a proxy fight if no progress is made in the next

four months.

In a second letter to Novavax's ( NVAX ) board in less than a month,

shared exclusively with Reuters on Wednesday, Shah Capital said

it has become "increasingly disenchanted" with the company's

weak COVID-19 vaccine sales.

"If I don't see changes happening, and if the company

doesn't follow through in the next four months, then I think

that is definitely a potential for a proxy fight," the hedge

fund's founder Himanshu Shah said in an interview.

Shah Capital said it still believes in Novavax's ( NVAX ) science and

has increased its stake to about 8.3%, up from 7.2% in October.

"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," Novavax ( NVAX ) said in a statement.

DISCONNECT BETWEEN POTENTIAL AND EXECUTION

The activist investor has pushed for change again after it

withdrew a campaign against three board directors last year,

following Novavax's ( NVAX ) licensing deal with Sanofi.

Shah Capital said it remains "at a complete loss" over the

disappointing sales of Novavax's ( NVAX ) protein-based COVID-19 vaccine

and is frustrated by its negligible market share.

"It is reasonable to question whether Novavax ( NVAX ) and its

partner are exhibiting a profound lack of competence or

intentionally underperforming," the hedge fund said in its

letter.

Novavax's ( NVAX ) vaccine sold about 120,000 doses as of October 31,

during the 2025-26 season that started in August, versus 14.5

million doses sold in the same period by two competitors,

leaving Novavax's ( NVAX ) market share at about 0.8%, the letter said.

"Despite strong underlying science and evident market need,

the disconnect between potential and execution is striking," the

letter said.

Earlier this month, Novavax ( NVAX ) pushed back its profitability

target by a year to 2028.

Novavax ( NVAX ) has a high cost base, needs to be operationally

profitable next year and should run more comprehensive trials,

Shah said.

Shah values the company at $5 billion to $10 billion.

Novavax's ( NVAX ) market capitalization is about $1.21 billion,

according to data compiled by LSEG.

The fund urged the board to immediately form a committee to

evaluate a sale and hire a qualified investment bank.

Shah has previously named Sanofi, Merck, GSK

and AstraZeneca ( AZN ) as potential buyers, but said he has not

contacted them.