With Pfizer’s revenue and share price slumping after the drugmaker skyrocketed to new heights during the pandemic, the company’s executives will reportedly hear out activist investor Starboard Value’s recommendations for a strategy shift.
Starboard holds a stake in Pfizer worth around $1 billion, The Wall Street Journal recently reported. Now, the fund’s CEO Jeff Smith and partner Patrick Sullivan, who heads up its healthcare investments, will reportedly meet with Pfizer’s chief Albert Bourla and lead independent director Shantanu Narayen to discuss their turnaround plans for the company, The Financial Times reports, citing people familiar with the matter.
The meeting was backed by Pfizer’s former CEO Ian Read and previous finance chief Frank D’Amelio, who reportedly spoke with at least four board directors, including Narayen, about hearing out Starboard’s pitch, according to The Financial Times.
According to the FT, some Pfizer shareholders would support a “shake-up” that could include replacing Bourla at the helm.
While Starboard’s exact pitch is unclear, people briefed on the investor’s thinking told FT that the activist believes Pfizer has been mismanaged in the wake of the pandemic, particularly with its $70 billion M&A spree that included a $43 billion buyout of antibody-drug conjugate (ADC) specialist Seagen.
Pfizer declined to comment on the matter when reached by Fierce Pharma.
Some of Pfizer’s recent acquisitions have suffered from setbacks. The company a few days ago decided to voluntarily pull its sickle cell disease drug Oxbryta from global markets after new clinical data raised concerns about its efficacy-safety profile. The drug was a key component in Pfizer’s $5.4 billion acquisition of Global Blood Therapeutics in 2022.
Earlier this week, Pfizer terminated the development of a second respiratory syncytial virus (RSV) antiviral it had obtained from the $525 million buyout of ReViral in 2022.
After riding high on its COVID vaccine sales, Pfizer’s stock currently trades at just over $30 per share, nearly 50% below its pandemic peak of $59.48 in December 2021 and slightly below pre-pandemic levels. The company has yet to make up for falling sales of its once-popular COVID products, a trend that caused a full-year revenue dip of 41% in 2023 after the company’s record-breaking year in 2022.
Outside of COVID, the drugmaker is struggling with sales threats including Inflation Reduction Act-related Medicare negotiations that will slash the list price of its Bristol Myers Squibb-partnered blockbuster blood thinner Eliquis by 56% in 2026, plus a competitive RSV vaccine market and new CDC guideline that limits the reach of its Abrysvo.
In an attempt to save costs, Pfizer in May revealed a “multi-year program” to cut its cost of goods sold, which should result in $1.5 billion in savings by the end of 2027 starting in 2025. That plan is separate from another “enterprise-wide cost realignment program” announced in 2023, which looks to cut $4 billion in costs by the end of 2024.
With the efforts, layoffs have abounded at the company throughout the U.S. and beyond. Most recently, Pfizer downsized its manufacturing plant in Rocky Mount, North Carolina by 60 jobs and its Sanford, North Carolina site by 150 employees. The Sanford facility in particular supported the company’s gene therapy programs, which were hampered by a phase 3 fail of its Duchenne muscular dystrophy (DMD) candidate.