A major shareholder of Novavax Inc. (NASDAQ:NVAX), Shah Capital, on Wednesday said it will vote against the company's board nominees and executive compensation at the 2026 annual meeting. They cited prolonged shareholder value destruction and weak operational execution.

The investor, which holds roughly 9% of the company, argued that leadership has failed to translate Novavax's vaccine platform into meaningful commercial success.

Shah Capital, in a letter on Wednesday, highlighted disappointing uptake of Nuvaxovid, projecting only about $22 million in 2025 revenue, or roughly 1% market share, despite what it described as strong efficacy and safety.

Sanofi Partnership And Pipeline Delays

Shah Capital also expressed frustration with delays tied to Novavax's partnership with Sanofi SA (NASDAQ:SNY), particularly around the Phase 3 launch of a COVID-influenza combination vaccine.

In June 2025, Novavax shared results of the initial cohort of its COVID-19-Influenza Combination (CIC) and standalone trivalent hemagglutinin nanoparticle seasonal influenza (tNIV) Phase 3 trial.

Both standalone flu and CIC vaccine candidates induced robust immune responses to the vaccine strains (2.4-5.7-fold over baseline).

The investor on Wednesday noted that the program targets a multibillion-dollar market but has yet to advance despite promising clinical data.

Additionally, it questioned why Novavax's broader pipeline — including combination vaccines and other programs — has not translated into stronger investor confidence, pointing to elevated short interest even with partnerships involving Sanofi and Pfizer Inc. (NYSE:PFE).

Cost Structure And Capital Allocation Concerns

The hedge fund criticized what it called insufficient cost discipline, arguing that Novavax maintains an overly large executive team and board relative to its current royalty-driven business model.

It also flagged continued high R&D and SG&A spending, despite prior investments exceeding $1 billion over recent years.

Shah Capital further raised concerns about capital allocation, including a convertible bond extension in 2025 and what it described as excessive cash retention while the stock underperforms.

It urged the company to retire outstanding debt and consider share buybacks to restore credibility.

The investor proposed a series of governance changes, including reducing board size and cutting senior management roles by about 30%. It also called for a sharper focus on profitability, targeting significantly lower operating expenses by 2027.

Novavax Long-Term Value Still In Question

Despite acknowledging Novavax's scientific capabilities, Shah Capital noted that the stock has declined sharply over the past three and five years.

While it stopped short of launching a proxy fight, the firm urged broader shareholder dissent to push for strategic and governance reforms.

Shah Capital highlighted a strategic long-term investor taking a 10-20% ownership position to reshape Novavax entirely.

NVAX Price Action: Novavax shares were up 3.57% at $8.26 at the time of publication on Wednesday, according to Benzinga Pro data.

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