Pfizer Gains as CEO Set to Meet Activist Starboard

Pfizer Inc. (NYSE: PFE) experienced a more than 3% increase in its share price on Wednesday following reports of an upcoming meeting between CEO Albert Bourla and executives from activist hedge fund Starboard Value.

This development, initially reported by the Financial Times, follows a recent announcement from Reuters indicating that Starboard has acquired a stake of about $1 billion in Pfizer and is advocating for measures to enhance the company’s performance.

According to the Financial Times, the meeting will include Pfizer’s lead independent director, Shantanu Narayen, who is also the CEO of Adobe Systems. Discussions will involve Starboard’s chief executive, Jeff Smith, and Patrick Sullivan, who heads its healthcare investments.

The talks are expected to address concerns raised by Starboard regarding Pfizer’s challenges in regaining momentum after its pandemic-related success.

Since becoming CEO in 2019, Bourla has faced various obstacles, particularly as Pfizer’s revenues have diminished, largely due to the decline in sales of COVID-19 related products.

Despite investing around $70 billion in acquisitions since 2020—including the significant $43 billion acquisition of Seagen—Pfizer has struggled to identify a new product that can offset the revenue loss from its COVID vaccine and treatment pill.

Reports have also indicated that recent product launches by Pfizer have not met expectations. This includes a lackluster rollout of its respiratory syncytial virus (RSV) vaccine and disappointing clinical data concerning an obesity treatment that is still in development.

While details of Starboard’s recommendations are not fully known, their involvement suggests a potential push for strategic changes within Pfizer.

In a recent update to its clients, Truist revised its revenue forecasts for Pfizer ahead of the company’s earnings release. The firm adjusted its projections largely based on data tracking prescriptions and seasonal factors affecting Pfizer’s vaccine portfolio.

They now estimate total revenue for the third quarter of 2024 to be $15.0 billion, down from a prior estimate of $16.2 billion, and adjusted earnings per share to be $0.48, compared to the previous estimate of $0.50.