(Bloomberg) — Activist investor Starboard Value has acquired a roughly $1 billion stake in Pfizer Inc. and is working to foster a turnaround for the struggling pharmaceutical giant, according to the matter. An informed source reported.
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Starboard reached out to former Pfizer executives Ian Read and Frank D’Amelio, who expressed interest in helping and asked not to be identified discussing private information. said. It is unclear in what capacity they will participate. Reed served as Pfizer’s CEO from 2010 to 2018 and chose current CEO Albert Bourla as his successor. D’Amelio served as the New York-based company’s Chief Financial Officer from 2007 to 2021.
Starboard’s exact plans and relationship with the company are unclear at this time. The activist found that investors and research analysts were frustrated with the company’s ongoing post-pandemic struggles, the person said.
Pfizer declined to comment. Starboard could not immediately be reached for comment outside of regular business hours.
Pfizer is struggling to find its next hit. The company’s Covid-19 vaccines and treatments more than doubled sales from $42 billion in 2020 to $100 billion in 2022, but demand for its Covid products has since fallen sharply.
not sure
Wall Street is not yet convinced that Pfizer can replace its pandemic wealth. The company’s stock price is down more than 50% from its December 2021 high. The stock is down less than 1% this year, compared with a 21% gain for the S&P 500 index.
“It’s not surprising to see a company like Starboard attempting to change its trajectory,” Mizuho Healthcare expert Jared Holz said in a note Sunday night. “PFE’s aggressive business development strategy and the whole concept of lack of revenue (to date) are likely one of the key reasons for holding the Starboard stake.”
The drugmaker turned its attention to cancer last year with its $43 billion acquisition of Seagen Inc., acquiring a promising and well-established cancer drug company. But the company has also failed to develop treatments for obesity, and earlier this year its experimental gene therapy for Duchenne muscular dystrophy failed in a large-scale trial. Most recently, Pfizer announced the global withdrawal of its sickle cell anemia treatment.
The drug follows Pfizer’s 2022 $5.4 billion acquisition of Global Blood Therapeutics, one of a series of purchases that Starboard considers to have resulted in poor results, the people said. Other recent acquisitions include Biohaven ($11.6 billion) and Arena Pharmaceuticals ($6.7 billion).
Last May, Pfizer launched a cost-cutting plan aimed at saving $1.5 billion by the end of 2027. Nonetheless, Starboard said it contrasts Pfizer’s current struggles with the more positive trajectory it had under its previous leadership team.
The Wall Street Journal reported on Starboard’s Pfizer efforts Sunday morning.
(Updated analyst opinion in paragraph 7, additional background starting in paragraph 8)
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