Shah Capital Management, Inc. (together with its affiliates, “Shah
Capital,” “we” or “our”) collectively beneficially owns
approximately 7.5% of the outstanding common stock of Novavax, Inc.
(NASDAQ: NVAX) (“Novavax” or the “Company”), making it
a
top three and largest non-index stockholder, today issued
the below statement to stockholders regarding its intended efforts
at the 2024 Annual Meeting of Stockholders scheduled for Thursday,
June 13, 2024, 8:30 a.m. Eastern Time (the “Annual Meeting”):
Fellow Novavax Stockholders:
Novavax’s upcoming Annual Meeting presents an
opportunity to send a strong and clear message to
the Company’s board of directors (the “Board”) and management –
that stockholders cannot afford the status quo and the time for
meaningful Board refreshment is now!
Shah Capital recognizes the critical importance
of effective board oversight and stewardship. Unfortunately, we
have lost faith that the current directors have the ability or
willingness to adapt to market pressures and take the steps we
believe are necessary to address its continuing dismal performance.
As a result, Shah Capital today filed a preliminary proxy statement
to solicit stockholders to vote AGAINST the
re-election of Richard H. Douglas,
Margaret G. McGlynn, and David
Mott, each of the Company’s Class II Directors up for
election at the Annual Meeting. In our view, the Company’s current
management has failed to implement effective strategies to turn the
business around despite its rapidly shrinking share price,
necessitating material and immediate board refreshment. Novavax
remains today one of the most shorted stocks on NASDAQ.
The decision to launch this campaign follows our repeated
attempts to constructively engage with the Board. We
strongly believe in the value of Novavax’s deep IP portfolio and
Matrix-M adjuvant platform and that there is a vast and currently
untapped market for non-mRNA protein vaccines. We have
offered several suggestions to the Board aimed at addressing
Novavax’s apparently self-inflicted problems, which we believe have
significantly undermined its growth and success. The Board
regrettably has been unresponsive to our suggestions. Shah Capital
has, therefore, decided to make its concerns public and has today
announced its intention to vote AGAINST the re-election of
Mr. Douglas, Ms. McGlynn and Mr. Mott at the Annual Meeting and
urges Novavax stockholders to do the same.Shah Capital
further believes that the maintenance and expansion of the
Company’s generous compensation programs for its executive
management and directors, given the Company’s continuing poor
performance and recent massive stockholder dilution is
inappropriate. Therefore, Shah Capital is also calling on all
Novavax stockholders, as they assess the Company’s future direction
and leadership, to vote AGAINST three of the Company’s
other proposals to be considered at the Annual Meeting,
which include an advisory vote to approve the compensation of
Novavax’s named executive officers and amendments to certain of
it’s compensation plans.We believe that fresh perspectives are
desperately needed in the boardroom to steer Novavax towards
sustainable profitable growth. Our campaign provides stockholders
with an opportunity to send a clear message to the Company that
material change is needed now for the benefit of all stockholders.
As a committed long-term investor in Novavax, we have closely
monitored the Company’s performance and governance practices
and are Deeply Concerned by the Company’s Shocking
Destruction of Stockholder Value and the Market’s Apparent Lack of
Faith in the Direction of the Company.
We reiterate our position that Novavax must
urgently adopt a more innovative and dynamic sales and marketing
strategy. Specifically, that the Company should target key Covid
segments in its marketing, such as direct-to-patient outreach for
individuals aged 60+ and residents of southern states, as well as
develop more effective regulatory stakeholder management,
particularly with the FDA. Furthermore, we contend that Novavax
should turn its Matrix-M adjuvant franchise’s inactive pipeline
candidates (such as Flu, RSV, and H5N1) into active opportunities
through an infusion of outside capital and potential strategic
partnerships. Lastly, we believe efficient and effective spending
is necessary for operational profitability at Novavax in 2024 and
beyond.
We urge you to stand with us and vote
AGAINST the re-election of Mr. Douglas, Ms.
McGlynn and Mr. Mott and AGAINST certain of the
Company’s other proposals at the Annual Meeting. By voting
AGAINST each of the directors eligible for
re-election, you will send a strong message to the Board that you
are dissatisfied with the status quo and believe urgent change is
needed.
Under the Company’s policies, each of the
directors up for election at the Annual Meeting have already
tendered an irrevocable contingent resignation to the Company’s
secretary. Such resignations will become effective, only if (i)
such director fails to receive the requisite majority vote in an
uncontested election and (ii) accepted by the Board. In our view,
if our campaign results in any director failing to receive a
majority of the votes cast for his or her election, then we
believe it would clearly be inappropriate for any such director to
continue to serve on the Board and we would call on the
Board to promptly accept his or her resignation.
We urge you to make your voice heard
with your “AGAINST VOTE.” Your action can help
initiate the changes at Novavax that we believe are required to put
Novavax on a path towards success and sustained profitable
growth.
Sincerely,
Shah Capital Management, Inc.
About Shah Capital:
Shah Capital is a global investment firm
employing a focused investment philosophy with an emphasis on
turnarounds and special situations.
Media Contacts:
Citigate Dewe RogersonShah
Capital team |
shah@citigatedewerogerson.com |
Investors:
InvestorCom LLC19 Old Kings Highway S. – Suite 130Darien, CT
06820Toll Free (877) 972-0090Banks and Brokers call collect (203)
972-9300shah@investor-com.com
CERTAIN INFORMATION CONCERNING THE
PARTICIPANTS
Shah Capital Management, Inc., a North Carolina
corporation (“Shah Capital Management”), together with the other
participants in its solicitation (collectively, “Shah Capital”),
have filed a preliminary proxy statement and accompanying
GOLD proxy card with the Securities and Exchange
Commission (“SEC”) to be used to solicit votes
AGAINST the election of Richard H. Douglas,
Margaret G. McGlynn and David Mott to the Board of Directors of
Novavax, Inc., a Delaware corporation (the “Company”) at the
Company’s 2024 annual meeting of stockholders (the “Annual
Meeting”) and AGAINST the approval of certain of
the Company’s other proposals to be considered by stockholders at
the Annual Meeting.
SHAH CAPITAL STRONGLY ADVISES ALL STOCKHOLDERS
OF THE COMPANY TO READ THE PROXY STATEMENT AND OTHER PROXY
MATERIALS AS THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION. SUCH PROXY MATERIALS WILL BE AVAILABLE AT NO
CHARGE ON THE SEC'S WEBSITE AT HTTP://WWW.SEC.GOV. IN ADDITION, THE
PARTICIPANTS IN THIS PROXY SOLICITATION WILL PROVIDE COPIES OF THE
PROXY STATEMENT WITHOUT CHARGE, WHEN AVAILABLE, UPON REQUEST.
REQUESTS FOR COPIES SHOULD BE DIRECTED TO THE PARTICIPANTS’ PROXY
SOLICITOR.
The participants in the proxy solicitation are
anticipated to be Shah Capital Management, Shah Capital Opportunity
Fund LP (“Shah Opportunity”) and Himanshu H. Shah.
As of the date hereof, Shah Capital Management
directly beneficially owns 9,750,000 shares of Common Stock, par
value $0.01 per share of the Company (the “Common Stock”). As the
investment manager of Shah Opportunity and certain separately
managed accounts (the “Shah Managed Accounts”), Shah Capital
Management may be deemed to beneficially own 10,415,794 shares of
Common Stock beneficially owned in the aggregate by Shah
Opportunity and held in the Shah Managed Accounts.1 As of the date
hereof, Mr. Shah directly beneficially owns 65,382 shares of
Common Stock, which are held in an account separately managed by
Shah Capital Management for his benefit (the “Mr. Shah Managed
Account”). As the President and Chief Investment Officer of
Shah Capital Management, Mr. Shah may be deemed to beneficially own
the 10,415,794 shares of Common Stock beneficially owned in the
aggregate by Shah Opportunity and held in the Shah Managed
Accounts, which in addition to the 65,382 shares of Common Stock he
beneficially owns directly, constitutes an aggregate of 10,481,176
shares of Common Stock that Mr. Shah may be deemed to beneficially
own.
1 The Shah Managed Accounts excludes the Mr. Shah Managed
Account (as defined below).
Novavax (NASDAQ:NVAX)
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