Novavax (NASDAQ:NVAX) shares jumped by over 2% in the early session today amid major activist investor action at the biotechnology company.
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A Major Push Amid Share Price Slump
Hedge fund Shah Capital is seeking a board shake-up at Novavax following a major slump in the company’s share price. In the post-COVID-19 period, Novavax’s stock price eroded by nearly 98% over the past three years. Now, Shah Capital, a major shareholder in Novavax, wants to install two new independent directors at the company and a new sales strategy for its COVID-19 vaccine.
According to the Financial Times, the launch of NVAX’s COVID-19 vaccine came just as world governments were scaling back their procurement of COVID-19 vaccines. The late market entry prevented Novavax from making meaningful market share gains. In the aftermath, the company’s market capitalization plunged from over $40 billion at one point to around $600 million at present.
In recent times, Novavax has undertaken a $1.1 billion cost optimization move and slashed nearly 12% of its headcount. The company generated COVID-19 vaccine sales of nearly $25 million in the winter season. In comparison, its vaccine competitors Pfizer (NYSE:PFE) and Moderna (NASDAQ:MRNA) are expected to bring in nearly $12 billion in COVID-19 vaccine sales this year. Shah Capital aims to alter this scenario by proposing two independent board nominees, Suresh Katta and Venkat Peri, both CEOs at other biotechs. Novavax, however, has not yet indicated whether it would comply with Shah Capital’s demands.
What Is the Price Target for NVAX?
Overall, the Street has a Hold consensus rating on Novavax, alongside an average NVAX price target of $9.75. While the price target points to a mega 127.8% potential upside in Novavax shares, the TipRanks Hedge Fund Activity tool indicates a Neutral hedge fund confidence signal in the stock.
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