Believes the two new nominated directors possess the necessary experience to tackle the underperformance of the business which will improve its share price
Shah Capital which owns 6.7% of Novavax, in a letter to the board says that the low share price reflects the board and management's failure to capitalize on Novavax's many significant competitive advantages and TAM opportunities
The letter highlights that the underperformance is self-inflicted and is the result of reactive leadership and outdated and old-fashioned marketing
RALEIGH, N.C., April 15, 2024 (GLOBE NEWSWIRE) -- Shah Capital, which owns approximately 6.7% of the outstanding common stock of Novavax (NASDAQ:NVAX), has today issued the below statement:
"As a long-term strategic investor in Novavax, Shah Capital has been deeply disappointed in its performance and the failure of its leadership to realize shareholder value reflective of Novavax's significant competitive advantages and sizeable market opportunity.
"Over a period of more than a year, Shah Capital has engaged repeatedly with the board and made several suggestions aimed at addressing self-inflicted problems which have undermined the success and sustainability of the company. However, the board has regrettably been unresponsive. Following this subsequent inaction by Novavax, which is now trading at a near record low and is one of the most shorted stocks on the Nasdaq, Shah Capital has been forced to make public its concerns and call for leadership change.
"Recognizing this pressing need for Novavax to offer the investment community a more proactive and innovative strategy, Shah Capital is strongly recommending the appointment to the board of two new independent directors:
- Suresh Katta, founder of Saama and CEO of the company for 25 years
- Venkat Peri, CEO of Quantiva Health a healthcare company that is putting AI and advanced computational sciences at the intersection of medicine, biology, and healthcare economics
"Together these two individuals have the pragmatic knowhow and technology experience to help the board address many of the key issues we have identified as value destroyers for Novavax. These include colossal marketing failures, a non-existent partnership strategy, no clear understanding of technology, questionable regulatory management, and ongoing operating losses and inefficiencies. Together these have contributed to a market capitalization to 2024 expected sales ratio of only 1X, compared to the 10X valuation possessed by its peer Moderna. This demonstrates clearly the lack of investor confidence in the business which has been made worse by the recent massive dilutive share issuance. "It is the view of Shah Capital therefore that Novavax must urgently adopt a more innovative and dynamic sales and marketing strategy. Targeting key Covid segments, such as direct-to-patient outreach for individuals aged 60+ and residents of southern states is crucial, as is effective regulatory stakeholder management, particularly with the FDA. Furthermore, Novavax should turn ...