Starboard Hammers Pfizer Execs For Failing To Deliver On 'Best Pipeline' Promises

Activist investor Starboard Value has taken aim at Pfizer, criticizing the pharmaceutical giant's post-Covid performance and questioning the effectiveness of its pipeline. In a presentation at the 13D Monitor Active-Passive Investor Summit, Starboard CEO Jeffrey Smith accused Pfizer of failing to deliver on its promises, leading to a significant loss in market value.

Pfizer's share price has dropped by more than a third since the Covid pandemic, leaving the company with a market value of around $164 billion. Smith argued that Pfizer has mismanaged its pandemic windfall, making costly deals that have not paid off. He also criticized the company's capital allocation and forecasting, stating that the board needs to hold management accountable for achieving sufficient revenue returns on R&D and M&A.

Starboard's critique comes as Pfizer faces challenges in its pipeline and financial performance. The company has struggled to meet sales expectations, with its Covid products' revenue declining. Additionally, Pfizer's weight-loss drug, initially expected to generate $10 billion in sales, is now projected to bring in less than $600 million by 2030.

Pfizer's stock performance has also lagged behind its peers in the pharmaceutical industry. While the company has made several acquisitions, including the $43 billion purchase of Seagen and the $12.9 billion acquisition of Biohaven Pharmaceuticals, Starboard argues that Pfizer may have overpaid for these assets. The activist firm also pointed out that Pfizer's acquisition of Global Blood Therapeutics has been a disappointment, with the company recently pulling its sickle cell disease treatment, Oxbryta, from the market due to patient deaths.

Starboard's criticism has raised questions about Pfizer's pipeline and its ability to deliver on its promises. The company's stock has underperformed compared to its peers, and its pipeline performance has been called into question. As Pfizer continues to face challenges in its financial performance and pipeline, investors will be watching closely to see how the company responds to Starboard's critique and whether it can turn its fortunes around.