(Reuters) – Hedge fund Shah Capital on Monday urged Novavax shareholders to vote against the re-election of three directors and proposals related to executive compensation, ramping up its efforts for a board shakeup at the COVID-19 vaccine maker.
Shah Capital, which currently owns a near 7.5% stake in Novavax and is its third-largest shareholder, reiterated that the company was “undervalued and continues to suffer from poor profitability”.
The top shareholder had expressed concerns about mismanagement at the Maryland-based biotech and nominated two of its own candidates for the board last month. It had also urged Novavax to adopt a marketing strategy to target consumers who are hesitant to receive mRNA vaccines.
The hedge fund said in a regulatory filing on Monday that it plans to vote against directors Richard Douglas, Margaret McGlynn and David Mott at Novavax’s upcoming shareholder meeting in June.
“We believe that fresh perspectives are desperately needed in the boardroom to steer Novavax towards sustainable profitable growth,” it said in a statement.
Novavax had raised doubts about its ability to remain in business last year. The biotech missed out on the pandemic windfall enjoyed by mRNA rivals as manufacturing snags and regulatory delays limited its potential to bring its protein-based vaccine to market in a timely manner.
McGlynn and Mott have served on the board of Novavax since 2020 and Douglas since 2010.
Shah Capital also plans to vote against three other proposals, including one that deals with the compensation of some of Novavax’s executives.
Novavax did not immediately respond to a Reuters request for comment.
In April, Shah Capital nominated Suresh Katta, founder and CEO of biotech firm Saama, and Venkat Peri, CEO of Quantiva Health, to Novavax’s eight-member board, saying the duo had the experience required to set the company’s strategic direction.
(Reporting by Bhanvi Satija in Bengaluru; Editing by Shilpi Majumdar)
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