Source-wsj.com
Starboard Value’s $1 Billion Investment in Pfizer
In a significant move, activist investor Starboard Value has acquired a $1 billion stake in Pfizer, according to sources familiar with the matter. The U.S. pharmaceutical giant, known for its swift development of a COVID-19 vaccine, has faced recent challenges, prompting Starboard to push for strategic changes to revitalize the company’s performance. The news comes amid growing concerns over Pfizer’s declining stock price and underwhelming product launches.
While both Starboard and Pfizer declined to comment on the situation, it has been reported that the investment firm has engaged former Pfizer executives Ian Read and Frank D’Amelio for advice. Read, who led the company as CEO until 2019, and D’Amelio, the former Chief Financial Officer, have expressed their willingness to assist Starboard in its efforts. Current Pfizer CEO Albert Bourla, who succeeded Read, played a key role in collaborating with BioNTech to develop the company’s successful COVID-19 vaccine during the pandemic.
Challenges Weigh on Pfizer’s Stock Performance
Despite its early success in the pandemic, Pfizer has been struggling to maintain momentum. The company’s stock, which was valued at approximately $41 in 2019 when Bourla took over as CEO, has plummeted to $28.58 as of last Friday. The decline is attributed to several factors, including falling sales of its COVID-19 vaccines and treatments, a less-than-expected launch of its respiratory syncytial virus (RSV) vaccine, and unsatisfactory clinical trial results for an obesity drug under development.
Investors have grown increasingly concerned as the company’s efforts to diversify its portfolio have not yielded the desired results. Pfizer’s aggressive acquisition strategy, which involved spending nearly $70 billion on companies like Seagen, Biohaven, and Global Blood Therapeutics (GBT), has also come under scrutiny. In particular, GBT’s sickle cell disease treatment was withdrawn from the market due to adverse side effects, a move that has added to investor worries.
Starboard’s Push for Change and Broader Activism
Starboard Value’s $1 billion investment in Pfizer signals its intention to drive change within the pharmaceutical giant, following a similar pattern of activism seen in other companies. The investment firm has previously taken stakes in companies like News Corp, Salesforce, and Match Group, pushing for strategic adjustments in each case. With Pfizer, Starboard appears to be positioning itself to influence the company’s direction at a time when it is struggling to regain its former financial standing.
Although the full extent of Starboard’s plans for Pfizer remains unclear, the firm’s track record suggests it will likely advocate for a more focused approach to both product development and financial strategy. As Pfizer navigates these challenges, the involvement of Read and D’Amelio may provide valuable insights, potentially leading to the recovery investors are hoping for.
