Starboard Value is urging Pfizer's board to hold management accountable for a pattern of underperformance, citing missteps in acquisitions and a lack of innovation. Despite a significant revenue boost from COVID-19 products, Pfizer has struggled to maintain growth and recently withdrew a $5.4 billion sickle cell drug acquisition. The company's stock has halved since pandemic highs, and Starboard's push for change has faced challenges, including a high-profile withdrawal of support from former Pfizer executives.
Starboard Value LP's CEO, Jeffrey Smith, criticized Pfizer Inc. for a staggering $20 billion in value destruction, attributing it to the company's failure to deliver on new blockbuster drugs. He described the decline in Pfizer's share price since the Covid pandemic as "crazy" and emphasized the need for increased accountability.
Two former Pfizer executives, Ian Read and Frank D’Amelio, have distanced themselves from activist investor Starboard Value's plans to overhaul the company, citing support for current management. Starboard alleges they were coerced into this stance, claiming threats of litigation and compensation clawbacks. The investor, which holds a $1 billion stake in Pfizer, is pushing for changes amid the company's declining profitability and challenges in the pharmaceutical market.
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