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 its
Matrix-M adjuvant franchise’s inactive pipeline candidates (such as
Flu, RSV, and H5N1) into active opportunities through outside
capital infusion. Lastly, efficient and effective spending is
necessary for operational profitability in 2024 and beyond.
“Possessing interests aligned with all Novavax shareholders,
Shah Capital is invested in the long-term success of the company
and believes that, despite the issues outlined above, its Matrix-M
adjuvant vaccine franchise has an extremely bright future. This
potential is well supported by compelling data from the Center for
Disease Control (CDC) which supports its effectiveness as an
early-season vaccine, especially when compared to mRNA peers. In
addition, the untapped market of approximately 100 million US
citizens averse to mRNA vaccines presents a significant
opportunity. It is unfathomable that given the sheer size of
Novavax’s unique market opportunity that the present team was only
able to achieve ~200,000 jabs nationwide in Fall 2023 season. This
failure was not due to lack of demand, but instead was a function
of marketing missteps, rollout issues and delays that simply would
not happen with a sharper more focused team. Novavax can have over
50% covid market share this fall season if they play their cards
right.
“It is for these reasons outlined above that Shah Capital is
calling for an end to the historic mismanagement of this business.
We are confident that the appointment of these two highly
experienced individuals to the board will be a crucial first step
to moving beyond what has been an ineffective and old-fashioned
strategic approach in favor of one that can finally begin
maximizing value for Novavax’s shareholders.” Also, given the
Board’s inability to execute, inflexible nature and unwillingness
to adapt, there may very well need to be even more shareholder
representation beyond the two seats that we are recommending, and
we are open to exploring this concept further.
Director Candidate Bios:
Suresh Katta:
Suresh founded Saama Technologies in 1997 with a
vision to provide unattainable insights from raw data across
disparate sources using game-changing analytics solutions for
Fortune companies. Over the last 25 years, he served as Saama’s
CEO, leveraging AI to reshape businesses across different
verticals, including Life Sciences, Insurance, CPG, and
High-Tech.
In June 2022, Suresh was elevated to Chairman
Emeritus of Saama’s Board, following his leadership in stewarding
Saama’s partnership with Pfizer to develop the world’s first
COVID-19 vaccine in less than one year. In 2021, he architected a
bold new strategic growth investment of approximately $500M for
Saama with global investment firm Carlyle and a unique consortium
of the corporate venture arms of major pharmaceutical companies,
including Pfizer, Merck, Amgen, and McKesson.
Before founding Saama, Suresh had an early
career at Silvar-Lisco, a chip software company, and Silicon
Graphics, a 3D workstation company.
As one of the world’s most inspiring data &
analytics (D&A) innovators, Suresh served on the Board of
Directors of the Association of Clinical Research Organizations
(ACRO), advocating for safe, ethical clinical trials that protect
patients and ensure high-quality results. In recognition of his
contributions, Suresh was named PM360’s ELITE Entrepreneur and one
of PharmaVOICE’s 100 Most Inspirational Leaders. He frequently
contributes to industry publications and is a sought-after featured
speaker for industry conferences and panels. Prior to founding
Saama, Suresh successfully launched two startups.
Suresh also serves as a board member at the
Stimson Center, one of the top think tanks headquartered in
Washington, DC, known for its leadership on critical global issues.
In addition, Suresh is associated with various charitable programs
that provide educational assistance for the less fortunate. Suresh
serves as a board member at OneCellDx, an early cancer diagnostics
company working at the intersection of breakthrough sciences and
AI. Suresh also serves on the board of Ceremorphic, an
ultra-low-power supercomputing AI chip company.
Suresh received honorary doctorates from MIT ADT
University and DY Patil Universities in India for his contributions
to uplifting humanity during the crisis. He earned his M.S. in
Computer Engineering from the University of Southwest Louisiana and
his B.S. in Electronics Engineering from the University of
Bangalore, India.
Venkat Peri:
Venkat (aka, PV) is the CEO of Quantiva Health,
a cutting-edge Healthcare company that is putting AI and advanced
computational sciences at the intersection of medicine, biology,
and healthcare economics. Quantiva Health’s solutions have been
proven, patented, and piloted with real-life healthcare data and
have delivered path-breaking accuracy in detecting the presence,
severity, and progression of diseases. Quantiva Health’s approach
and solutions are solving some of the most challenging impediments
of healthcare including precision targeting and interventions;
optimizing resource allocation; spotting and managing the cohorts
with rising risks to save hundreds of millions for payers and
providers including Medicaid and Medicare. Over the past 2 years,
Quantiva Health has built a robust pipeline of solutions for
maternal and infant health; sepsis; vision anomalies; hepatic risks
and CKD.
Prior to starting Quantiva Health, PV spent more
than 3 decades in management consulting and product development and
served in global leadership roles as a Senior Partner at PwC,
Deloitte, and IBM delivering more than $1B in revenues across
financial services, healthcare, business analytics &
optimization, and risk assurance and analytics. In addition to his
P&L responsibilities, PV had served as a personal advisor to
CXOs, Boards and Governments leveraging his deep understanding of
technology and AI to shape their perspectives to harness
technology, AI, and global talent for value creation.
As a practitioner, PV did seminal work in areas
of - personalized targeting and pricing for a diverse range of
products from medicines to loans to policy premiums; restructuring
NPAs post the sub-prime crisis; tax reforms for enhanced revenue
collection and reducing defaults; terrorism surveillance to spot
bad actors in society.
PV is a compelling speaker and conducts
case-based simulations for graduate students in engineering and
business at a few leading universities globally. PV holds a
master’s degree in public administration from the London School of
Economics and Political Science and a master’s degree in computer
science and applications from the National Institute of Technology,
Rourkela, India.
About Shah Capital:
Shah Capital is a global investment firm
employing a focused investment philosophy with an emphasis on
turnarounds and special situations.
Contacts:
Citigate Dewe RogersonCaroline Merrell Christen
Thomson |
caroline.merrell@citigatedewerogerson.comchristen.thomson@citigatedewerogerson.com |
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