Activist-Driven Growth Potential in Novavax and UniFirst

Activist investors are accelerating their push for change, with campaign activity in biotech jumping 61% year-over-year in the first half of 2025. According to analysis, these campaigns are deploying $30 billion in cash parked within Nasdaq Biotech Index companies whose shares trade below their net cash positions. Nowhere is this pressure more evident than at Novavax, where Shah Capital, holding a 7.5% stake, is openly challenging three board nominees and executive compensation. As research shows, Shah argues the current leadership has failed to adapt, pushing instead for renewed focus on the over-60 demographic using direct-to-consumer marketing for Novavax's protein-based vaccines and a restart of the crucial Matrix-M adjuvant programs for flu and RSV. Simultaneously, UniFirst faces its own boardroom battle, with activist Engine Capital launching a proxy contest. Engine Capital is demanding board changes and a shift in dividend policy, capitalizing on UniFirst's current trading position below perceived fair value amid broader market challenges like rising healthcare costs and weak demand. This wave of activism raises a critical question for investors: Can these disruptive pressures successfully unlock long-term growth potential for these companies? Or, if the campaigns ultimately fail to achieve their goals, will the promised strategic shifts stall, leaving growth prospects diminished?

The path to meaningful shareholder returns often hinges on identifying genuine growth catalysts versus fleeting market buzz. Today, two companies present starkly different yet compelling cases built on measurable expansion metrics. Novavax faces an existential crisis, capturing a mere 0.8% of the 2025-26 vaccine market with just 120,000 doses sold against competitors' 14.5 million. This tiny foothold, despite significant Sanofi funding and technological promise, underscores intense competition and execution challenges delaying profitability until 2028. Conversely, Unifirst operates from a position of strength, targeting a 75% increase in facility services penetration within its top uniform accounts, aiming to lift coverage from 20% to 35% by Q4 2025. This ambitious penetration goal leverages core advantages: an impressive customer retention rate exceeding 90% in its laundry business and a dense network of over 260 North American locations. However, growth isn't guaranteed for either. Novavax battles fierce competition that could erode its nascent market position or lead to strategic changes demanded by activist investors. Unifirst, while building on proven loyalty and scale, must overcome margin pressures from rising labor and energy costs and accelerate its lagging digital modernization to fully capitalize on its cross-selling potential. The contrast highlights a fundamental investment principle: sustainable growth requires both a credible pathway to significantly higher market penetration and the operational capability to execute it.

Despite challenging market conditions, Novavax and UniFirst are demonstrating distinct approaches to managing capital and returning value, reflecting their unique positions and strategic priorities. Novavax reported Q3 2025 revenue of $70 million, an 18% drop compared to the same period last year, though bolstered by $225 million in Sanofi partnership milestones year-to-date, including $50 million from EU and US marketing authorizations. The company is fortifying its financial position with $778 million in cash reserves as of September 30, 2025, alongside $60 million in proceeds from Maryland site consolidation, which promises $230 million in future savings. While R&D expenses rose sharply to $98 million in Q3, 47% of this cost was reimbursed by Sanofi, and the firm has raised its full-year 2025 guidance for combined R&D and SG&A expenses to a range of $505–535 million. Conversely, UniFirst announced increased dividends and a $100 million share repurchase authorization. This capital return strategy coincides with operational investments, including a $28 million facility upgrade in Owensboro, as the company reported its FY2025 Q4 results with revised segment reporting. The differing tactics-Novavax's emphasis on strategic cash management and partnership-driven cost mitigation versus UniFirst's direct capital return programs-highlight their divergent paths forward.

The boardroom pressure at Novavax and UniFirst highlights two distinct growth stories with near-term inflection points. For Novavax, activist investor Shah Capital's campaign pushes for strategic shifts including direct-to-consumer targeting of seniors and adjuvant program restarts, while the company awaits phase 3 combo vaccine results in H2 2024. Financially, Novavax posted $1 billion revenue in 2023 and projects $800-$1 billion for 2024, positioning this vaccine as a potential catalyst. Meanwhile, UniFirst aims to boost facility services penetration in top uniform accounts from 20% to 35% by Q4 2025, leveraging over 90% customer retention and 260+ North American locations. Both companies face headwinds: Novavax contends with board resistance to activist demands, while UniFirst battles labor/energy costs and digital gaps.

Bull case: Novavax's combo vaccine clears phase 3 and gains regulatory approval, triggering immediate demand for protein-based platforms. UniFirst's penetration target materializes, accelerating cross-selling of premium services. Base case: Vaccine data meets expectations with steady 2024 revenue near projections, while UniFirst hits mid-point of its penetration goal. Bear case: Vaccine setbacks force strategic retreats at Novavax, while UniFirst's digital lag impedes market share gains.

Given our growth-first stance, we view both catalysts as asymmetric opportunities. Novavax becomes compelling if phase 3 data validates its pivot toward seniors, while UniFirst warrants increased exposure only if Q4 penetration rates confirm market share expansion. Either path could reignite upside potential for both companies.