Starboard reportedly takes $1 billion stake in Pfizer, seeks changes

By Mike Murphy

Activist investor Starboard Value has taken a $1 billion stake in beleaguered drugmaker Pfizer Inc. and is seeking a turnaround, the Wall Street Journal reported late Sunday.

Citing unnamed sources familiar with the matter, the Journal reported Starboard has approached two former Pfizer executives to assist in its efforts, though Starboard's specific plans were not revealed.

"We do not comment on market speculation or rumor," a Pfizer spokesperson told MarketWatch. Starboard did not immediately respond to a request for comment Sunday night.

Pfizer's stock soared during the pandemic, thanks to the development of its COVID-19 vaccine, peaking around $59 in late 2021. But Pfizer shares have fallen back to Earth as demand for its drugs and vaccines has slowed, ending Friday at $28.29. The stock plunged about 40% in 2023 following overly optimistic guidance, and the company announced a major cost-cutting effort about a year ago.

Pfizer shares (PFE) are down about 14% over the past 12 months, while the S&P 500 SPX has risen about 33%.

Pfizer easily beat second-quarter earnings estimates in July, raising its yearly revenue and profit outlook, and in August launched a direct-to-consumer platform for patients. But the pharma giant took a blow last month when it pulled a sickle-cell treatment from the market over a possible link to deaths.

That drug came from a 2022 acquisition of Global Blood Therapeutics, as part of Pfizer's strategy of mergers and acquisitions to drive revenue as some of its drug patent expire in the coming years. Its efforts to focus on M&A rather than research and development of new drugs has drawn criticism from some investors and analysts.

-Mike Murphy

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10-06-24 2144ET

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