INTERNEWSTIMES.COM – Pfizer, the pharmaceutical giant, is facing pressure from activist investor Starboard Value, which has acquired a $1 billion stake in the company. Starboard, known for its aggressive approach to corporate governance, is seeking to influence Pfizer’s direction and potentially replace current leadership.
Starboard believes Pfizer has strayed from its historically disciplined cost structure and investment in novel drugs. They argue that the company’s recent acquisition strategy, which has seen nearly $70 billion in M&A since 2020, has been costly and ineffective.
The activist investor has approached former Pfizer CEO Ian Read and ex-finance chief Frank D’Amelio, both of whom have expressed interest in supporting Starboard’s turnaround efforts. This move suggests that Starboard is serious about pushing for significant changes at Pfizer.
Pfizer’s revenue and free cash flow skyrocketed during the Covid-19 pandemic due to the success of its vaccine. However, the company’s stock has underperformed since then, trading about 30% lower than it did in 2019.
While Pfizer has implemented cost-cutting measures, shareholder value has still eroded significantly. The company’s recent decision to pull a drug for sickle cell disease, acquired just two years ago for $5 billion, has further raised concerns about its acquisition strategy.
Starboard, led by Jeff Smith, has a history of targeting companies in the technology sector. Their recent campaigns at Autodesk, Salesforce, and Match Group demonstrate their willingness to challenge established companies and push for change.
The pressure from Starboard is likely to intensify as the activist investor seeks to influence Pfizer’s future direction. (Red)
