A Novavax Inc. investor sued its senior leaders in Delaware Chancery Court, claiming they gave themselves a series of lucrative equity awards last year when no one else knew the company’s stock was about to shoot up nearly 700% on promising Covid-19 vaccine news.
“Management exploited its relationships with regulators and influential players in the vaccine community to both secure funding and position itself to receive even more funding for Covid-19 research prior to granting spring-loaded awards to company insiders,” according to the complaint made public Thursday.
The stock given to top executives in April and June skyrocketed in value by more than $35 million within a few months, after news that the company would be getting billions in funding through Operation Warp Speed, the U.S. government’s coronavirus vaccine initiative, the lawsuit says.
Novavax’s vaccine, which is still undergoing late-stage clinical trials, is expected to be approved by the Food and Drug Administration as early as May. Three vaccines are currently approved in the U.S.
The partly redacted derivative suit, which targets members of Novavax’s board and senior management, seeks to have the stock awards rescinded. It was originally filed under seal Feb. 26.
Cause of Action: Breach of fiduciary duty; corporate waste; unjust enrichment.
Relief: Damages, rescission of the awards, costs, and fees.
Response: Novavax didn’t immediately have a comment Thursday.
Attorneys: The plaintiff is represented by Ashby & Geddes PA and Levi & Korsinsky LLP.
The case is Golubinski v. Douglas, Del. Ch., No. 2021-0172, complaint unsealed 3/4/21.