Novavax stock rises after major shareholder urges company sale

Investing.com -- Novavax Inc (NASDAQ:NVAX) stock gained 2% Tuesday after Shah Capital, the company’s second-largest shareholder, sent a letter to the board urging an immediate strategic review for a potential sale of the company.

Shah Capital, which owns 7.2% of Novavax with 11.8 million shares, expressed frustration with what it called "persistent underperformance" and "tremendous lack of accountability" from the company’s leadership. The shareholder pointed to multiple execution failures, including regulatory delays, supply issues, and marketing missteps that have resulted in minimal market share for Novavax’s COVID-19 vaccine despite claimed scientific advantages over mRNA alternatives.

In its letter, Shah Capital highlighted that Novavax has captured only about 2% of the COVID-19 vaccine market in 2024 despite what it described as "greater efficacy, tolerability and durability than peers." The shareholder also criticized the company’s recent $225 million convertible bond refinancing in August 2025 as "extremely expensive" and questioned its necessity given the company’s approximately $900 million cash position as of June 30.

The letter pointed to Novavax’s stock performance, noting it has fallen 95% over the past decade, making it "one of the worst-performing pharma/biotech stocks" during that period. Shah Capital attributed this decline to "repeated strategic missteps" and "terrible execution on sales and marketing" rather than broader market or industry factors.

Shah Capital specifically recommended that Novavax pursue a sale to a "large capable pharma entity" that could better leverage the company’s COVID/Flu combination vaccine, pipeline assets, and Matrix-M adjuvant technology. The shareholder argued that Novavax’s intellectual property and scientific capabilities would have "far greater upside potential" under new ownership.

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