Starboard Value Invests $1 Billion in Pfizer, Seeks Strategic Changes

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Activist investor Starboard Value has recently acquired a significant stake of approximately $1 billion in Pfizer, aiming to drive transformative changes within the pharmaceutical giant, according to sources familiar with the situation.

In their pursuit of revitalizing Pfizer’s performance, Starboard has reached out to former CEO Ian Read and former CFO Frank D’Amelio, both of whom have shown interest in collaborating with the activist investor. Read, who led Pfizer until 2019, was succeeded by Albert Bourla, noted for his role in developing the COVID-19 vaccine in partnership with BioNTech. Pfizer has chosen not to comment, while Starboard has not responded to requests for clarification.

In premarket trading on Monday, Pfizer’s shares rose by 2.2% to $29.20. However, the stock has experienced a decline of over 13% over the past year, currently trading at about half of its peak during the pandemic as sales of its COVID-related products decrease.

Wall Street analysts express skepticism regarding Starboard’s ability to quickly address Pfizer’s challenges. David Risinger, an analyst at Leerink Partners, noted, “We await future developments, but we do not see low-hanging fruit to boost shareholder value.” Pfizer has faced difficulties in identifying new products to replace the revenue lost from its COVID vaccine and treatment.

The company experienced a lukewarm launch of its respiratory syncytial virus (RSV) vaccine and disappointing clinical results from an obesity medication it was developing. Additionally, CEO Bourla has invested approximately $70 billion since 2020 on acquisitions while implementing cost-saving measures.

Some notable acquisitions include Seagen for $43 billion, Biohaven for $13 billion, Arena for $6 billion, Global Blood Therapeutics for $5 billion, and Trillium for $2 billion.

The Wall Street Journal was the first to report on Starboard’s investment in Pfizer. Starboard has a history of advocating for changes at various companies, including News Corp, Salesforce, and Match Group, the parent company of Tinder.

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