May 20 (Reuters) - Hedge fund Shah Capital said on

Monday that it was withdrawing its campaign against the

re-election of three directors on Novavax's ( NVAX ) board, days

after the COVID-19 vaccine maker struck a licensing deal with

French drugmaker Sanofi.

Shah Capital, which owns an about 7.8% stake in Novavax ( NVAX ),

said that the agreement with Sanofi was a "long-awaited step in

the right direction".

Under the deal, the French drugmaker plans to take a 4.9%

stake in Novavax ( NVAX ) for $70 million. It also entitles Novavax ( NVAX ) to an

upfront cash payment of $500 million and future payments

contingent on certain milestones as well as royalties.

Earlier this month, the hedge fund had urged shareholders of

the Maryland-based biotech to vote against the re-election of

three directors and opposed proposals related to executive

compensation.

Shah Capital said on Monday that it continues to believe

Novavax ( NVAX ) would benefit from the addition of a stockholder

representative on its board.

Novavax ( NVAX ) did not immediately respond to a Reuters request for

comment.