Activist Investor Starboard Value Makes $1 Billion Stake in Pfizer

(Reuters) – Activist investor Starboard Value has taken a stake of about $1 billion in Pfizer (NYSE:PFE) and is urging the U.S. drug giant to implement changes to improve its performance, sources familiar with the matter revealed on Sunday.

Starboard has reached out to Ian Read, Pfizer’s former CEO, and Frank D’Amelio, the former CFO until 2021. Both have shown interest in assisting Starboard, according to the sources.

Read led Pfizer until Albert Bourla assumed the role in 2019. Bourla was pivotal in partnering with BioNTech (NASDAQ:BNTX) to develop a COVID-19 vaccine.

Pfizer has declined to comment, and Starboard did not immediately respond to a Reuters inquiry.

Investors have penalized Pfizer as it faces significant declines in sales from its COVID vaccines and drugs, the less-than-expected launch of its respiratory syncytial virus (RSV) vaccine, and disappointing results from an obesity drug under development.

The company’s stock price dropped to $28.58 on Friday from about $41.00 in 2019 when Bourla took the helm.

Despite Pfizer’s rapid vaccine development during the pandemic, its fortunes have waned as the world has returned to normalcy.

Bourla has also made substantial acquisitions, spending around $70 billion since 2020. This includes purchasing Seagen for $43 billion, Biohaven for $13 billion, Arena for $6 billion, Global Blood Therapeutics (NASDAQ:GBT) for $5 billion, and Trillium for $2 billion.

Some investors have criticized this acquisition spree, expressing particular concern over GBT, where its main sickle cell disease drug was taken off the market and clinical studies were halted due to adverse side effects.

The Wall Street Journal first reported on Starboard’s stake.

Starboard has previously advocated for changes at News Corp (NASDAQ:NWSA), Salesforce (NYSE:CRM), and Match Group (NASDAQ:MTCH).