(Reuters) -Hedge fund Shah Capital said on Monday it would withdraw its campaign against the re-election of three directors to Novavax’s board after the COVID-19 vaccine maker struck a licensing deal with Sanofi.
Under an agreement signed on May 10, the French drugmaker will acquire a 4.9% stake in Novavax for $70 million at a high valuation.
It includes an upfront cash payment of $500 million and future payments subject to certain milestones, as well as royalties.
Novavax, which has struggled to bring its protein-based vaccine to market in a timely manner, also removed a warning from February last year that raised doubts about the company’s survival after the deal.
Shah Capital had also opposed proposals regarding executive compensation.
The fund, which owns about 7.8% stake in Novavax, reiterated that the Sanofi deal was a “long-awaited step in the right direction.”
Novavax said it was “completely focused” on generating long-term value for all its shareholders.
“We appreciate Shah Capital ending its campaign, which is the right decision for shareholders and the company,” the company said in a statement.
Still, Shah Capital said Monday it continued to believe Novavax would benefit from the addition of a shareholder representative to its board.
“We will continue to monitor the business closely… as we believe there is significant value to be unlocked at Novavax,” the company said.
Shares of the Maryland-based biotech company rose about 1% to $13.1 in premarket trading and have nearly tripled so far this year.
According to LSEG data, the stock’s short interest was 32% of publicly available shares as of April 30.
(Reporting by Bhanvi Satija in Bengaluru; Editing by Shilpi Majumdar and Sriraj Kalluvila)
