Activist investor Starboard Value has invested approximately $1 billion in Pfizer Inc PFE. This strategic move occurs as the pharmaceutical giant grapples with a downturn in demand for its COVID-19 vaccines and treatments.
What Happened: Starboard has engaged former Pfizer executives, Ian Read and Frank D'Amelio, to assist in revitalizing the company’s performance, The Wall Street Journal reported, citing people familiar with the matter.
Pfizer’s market value was approximately $162 billion as of Friday, with its shares having halved since their peak in late 2021. The company’s stock performance has been relatively stagnant this year, in contrast to the S&P 500’s 21% rise.
Under pressure from investors, Pfizer CEO Albert Bourla is tasked with steering the company back on track after overestimating the demand for pandemic-related products. The company has also faced competition from lower-priced alternatives for key products like Eliquis and Xeljanz.
Starboard, led by Jeff Smith, is known for its active investments across various sectors, including technology and pharmaceuticals. The firm has previously engaged with companies like Salesforce and Bristol-Myers Squibb, showcasing its influence in corporate strategy and governance.
Pfizer and Starboard Value did not immediately respond to Benzinga's request for comment.
Why It Matters: Pfizer’s recent divestment of a $3.3 billion stake in Haleon, reducing its shareholding from 22.6% to 15%, indicates a strategic shift. This move comes as Pfizer remains Haleon’s largest shareholder, despite the sale. The company’s financial maneuvers are critical as it navigates the challenges posed by declining vaccine demand.
Starboard Value’s investment history, such as its stake in Match Group and investment in Autodesk, highlights its strategy of pushing for corporate changes to enhance value.
Price Action: Pfizer Inc. closed at $28.58 on Friday, up 0.85% for the day. In after-hours trading, the stock edged up 0.14%. Year to date, Pfizer’s stock has declined by 3.87%, according to data from Benzinga Pro.
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This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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