The recent run of good fortune for vaccine maker Novavax (NASDAQ:NVAX) continues. Following the major licensing deal with Sanofi (NASDAQ:SNY), Shah Capital has withdrawn its proxy campaign against the re-election of the company’s directors at its annual meeting.
The Proxy Fight
Back in April, hedge fund Shah Capital had sought a board shake-up at Novavax. As a top shareholder, Shah Capital aimed to install two new independent directors at the company.
And the Deal that Changed the Equation
However, Novavax’s recent licensing deal with Sanofi changed the equation. The $1.2 billion licensing deal includes Novavax co-commercializing its COVID-19 vaccine and developing COVID-19-Influenza combination vaccines with Sanofi. The deal also includes an upfront payment of $500 million and double-digit royalties on vaccine sales. Importantly, the deal helped Novavax remove doubts about its ability to remain a going concern.
As a result, Novavax’s share price has shot up by around 278% over the past month. The favorable turn of events also prompted Shah Capital’s recent actions. The hedge fund noted that NVAX’s SNY deal is a step in the right direction. At the same time, Shah Capital clarified that it will continue to monitor Novavax’s moves. It believes that further value could be unlocked at Novavax and the company could benefit from additional shareholder representation on its board.
Is Novavax a Buy, Sell, or a Hold?
Overall, the Street has a Moderate Buy consensus rating on Novavax, alongside an average NVAX price target of $13. At the same time, a beta of 2.29 indicates that the stock can be prone to gyrations wider than the broader market.
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