((Automated translation by Reuters, please see disclaimer https://bit.ly/rtrsauto))
(Added Novavax statement to paragraphs 7 and 8, updated actions)
Hedge fund Shah Capital said on Monday it would withdraw its campaign against the re-election of three directors to the board of Novavax NVAX.O , after the COVID-19 vaccine maker reached a licensing deal with Sanofi SASY. PA.
Under the agreement signed on May 10, the French drugmaker will take a 4.9% stake in Novavax for $70 million, at a high valuation.
The deal includes an upfront payment of $500 million and future payments based on certain milestones, as well as royalties.
Novavax, which has struggled to bring its protein-based vaccine to market on time, also removed a warning notice from February last year that raised doubts about whether its activities after the transaction.
Shah Capital also opposed the proposals relating to executive remuneration.
The fund, which holds a roughly 7.8% stake in Novavax, reiterated that the deal with Sanofi was a “long overdue step in the right direction.”
Novavax said it was “completely focused” on creating long-term value for all its shareholders.
“We appreciate that Shah Capital is ending its campaign, which is the right decision for shareholders and the company,” it said in a statement.
Nonetheless, Shah Capital said Monday that it continues to believe Novavax would benefit from the addition of a shareholder representative to its board of directors.
“We will continue to monitor the company closely… as we believe significant additional value can be unlocked at Novavax,” Shah Capital said.
Shares of the Maryland-based biotech company rose about 1% to $13.1 in pre-market trading and have nearly tripled since the start of the year.
Short interest in the stock stood at 32% of publicly available shares as of April 30, according to LSEG data.