Pfizer’s CEO Albert Bourla responded to activist investor Starboard Value’s criticisms on Tuesday, as the drugmaker increased its revenue projections for 2024. Bourla defended Pfizer’s management and strategies, stating that the company was already on track for a successful turnaround. He expressed willingness to engage with shareholders, including Starboard, to consider ideas that would benefit long-term shareholder value. Bourla’s comments followed Starboard’s public criticisms of Pfizer’s management at an activist investor conference, where they claimed that the company had misspent its Covid-19 windfall and caused shareholder value to decline.
Despite Starboard’s $1 billion stake in Pfizer, Bourla emphasized the company’s progress, citing a $43 billion acquisition of cancer drugmaker Seagen as a strategic investment that would deliver significant value to shareholders in the future. He also highlighted cost reduction efforts and board enhancements as part of Pfizer’s turnaround initiatives. Following the public disclosure of Starboard’s stake, Pfizer reported an increase in full-year sales and profit forecasts driven by strong demand for its Covid-19 products.
However, Pfizer’s shares experienced a 1.4% decline on Tuesday, reflecting ongoing investor concerns. Starboard’s campaign against Pfizer faced initial setbacks when former executives withdrew support for the activist investor, aligning themselves with Bourla instead. Despite internal challenges, Starboard continued to advocate for changes within Pfizer, citing dissatisfaction with shareholder returns and capital deployment decisions.
Analysts raised questions about Pfizer’s long-term prospects, noting challenges related to patent expirations and increased competition. While Pfizer’s third-quarter earnings exceeded expectations, concerns remained regarding the company’s ability to address these challenges effectively. Bourla’s meeting with Starboard’s representatives was described as constructive but highlighted differing views on key issues affecting Pfizer’s performance.
Overall, Bourla emphasized Pfizer’s commitment to enhancing shareholder value through strategic deals and operational improvements. Despite disagreements with Starboard, Pfizer remained focused on executing its long-term growth strategy to deliver value to shareholders.