Pfizer gains as CEO said to meet activist Starboard
Investing.com — Pfizer Inc. (NYSE:PFE) shares rose more than 3% on Wednesday following reports that CEO Albert Bourla is scheduled to meet with executives from activist hedge fund Starboard Value next week.
The news reported by the Financial Times comes after a recent report from Reuters that said Starboard had taken a stake of approximately $1 billion in the pharmaceutical giant and is pushing for changes aimed at revitalizing the company’s performance.
According to the Financial Times, the meeting, which includes Pfizer’s lead independent director Shantanu Narayen, who also serves as CEO of Adobe Systems (NASDAQ:ADBE), will involve discussions with Starboard’s chief executive Jeff Smith and Patrick Sullivan, head of its healthcare investments.
The discussions are said to signal an effort to address concerns raised by Starboard regarding Pfizer’s recent struggles to regain momentum following its pandemic-related highs.
Since taking the helm in 2019, Bourla has faced challenges as Pfizer’s revenues have decreased, particularly due to declining sales from COVID-19 products.
Despite spending approximately $70 billion on acquisitions since 2020, including the notable $43 billion buyout of Seagen, Pfizer has yet to find a product that can effectively compensate for lost revenue from its COVID vaccine and treatment pill.
It was also reported that Pfizer’s recent product launches have fallen short of expectations, including a weaker-than-anticipated rollout of its respiratory syncytial virus (RSV) vaccine and disappointing clinical data from an obesity pill under development.
While the specifics of Starboard’s recommendations remain unclear, their involvement suggests a push for strategic changes at Pfizer.
In a recent note to clients, Truist updated its models for Pfizer ahead of its earnings release, adjusting revenues primarily based on script tracking data and seasonality with Pfizer’s vaccine portfolio.
“We now model 3Q24E total revenue of $15.0B vs $16.2B prior and 3Q24 adj. EPS of $0.48 vs. $0.50 prior,” said the firm
