Well friends, it looks like Pfizer’s about to get a corporate version of a WWE smackdown as activist investor (and Carl Icahn impersonator) Starboard has swooped in with a $1 billion stake to play “corporate fixer upper”. 

(Source: Giphy) 

Now if you haven’t been paying attention - not only has Pfizer been struggling, but Starboard’s basically that friend who sees you spiraling and says, “I can fix him,” - but instead of giving you generic advice that could be found in an overpriced Tony Robbins book, they’re offering to overhaul your entire company themselves. And they’re bringing Pfizer’s ex-CEO and CFO along for the ride, just for good measure.

(Source: Wall Street Journal) 

In short, Pfizer, the maker of your favorite 'rona jab, has been in a bit of a free fall. The stock is down ~10% over the past 12 months and, since hitting its pandemic high, has lost nearly half its value. Oof. Turns out, not everyone wants to keep rolling up their sleeves for another COVID-19 jab, and Pfizer’s first weight-loss drug candidate performed about as well as your gas station energy drink—lots of fizz, zero bang. 

(Source: Imgflip) 

So, what’s Starboard’s game plan? Not entirely clear yet, but if you’re a Pfizer employee on thin ice, you might want to start polishing that LinkedIn profile. Activist investors don’t come in to make friends—they come in to make changes, and typically, some heads roll. Which is why with Pfizer's CEO Albert Bourla already feeling the heat from investors, don’t be surprised if Starboard’s list of demands includes some serious cost-cutting, restructuring, and a rethinking of that $43 billion Seagen acquisition.

(Source: Mint.com) 

Now with that said, let’s rewind a bit, shall we?  It's no secret that Pfizer was riding high on its COVID-19 vaccine, Comirnaty, and its antiviral drug Paxlovid, which collectively helped it rake in over $100 billion in sales in 2022. But the pandemic glow-up didn’t last long. As the world has returned to normal (or whatever passes for normal these days), the demand for Pfizer’s COVID-related products has dropped off a cliff. 

(Source: CNBC) 

And the company’s other offerings? Well, they’ve struggled to pick up the slack. Plus, with competition heating up for its key drugs like Eliquis and Xeljanz, Pfizer’s future cash flow doesn’t look as hot as it did during lockdown.

Now, enter Starboard, stage left. Jeff Smith, the hedge fund’s head honcho, is no stranger to the pharma world—he previously took a swing at Bristol-Myers Squibb—and he’s bringing back Pfizer’s ex-CEO Ian Read and former CFO Frank D’Amelio to help steer the ship. Read’s tenure at Pfizer was all about focus and M&A discipline, something that Bourla seems to have strayed from with his pandemic-fueled acquisition spree. Nearly $70 billion in M&A? That’s a lot of cheddar, and so far, analysts aren’t convinced it’s paying off.

(Source: Giphy) 

Pfizer’s recent moves, like the $5.4 billion acquisition of Global Blood Therapeutics, have some scratching their heads. Especially since Pfizer just pulled its sickle-cell drug Oxbryta off the shelves—y’know, the one it got from that very acquisition—after concerns about patient safety. Aka not exactly a confidence booster.

Additionally, now with competition like Eli Lilly and Novo Nordisk, who are both out here absolutely torching the market with their successful weight-loss drugs, Pfizer’s first attempt was about as appealing as Tim Waltz’ debate skills. Sure, Pfizer’s now advancing a once-daily anti-obesity pill, but it’s playing catch-up in a market where first-movers like Lilly are already printing money.

Eli Lilly to Pfizer, probably (Source: Giphy) 

So, given all of this, what’s the takeaway here? Well, Starboard’s stepping in at a time when Pfizer desperately needs a turnaround, and they’ve got the blueprint to make it happen. The billion-dollar question (literally) is whether Bourla’s going to play nice with his new activist daddy or if we’re in for some corporate cage match drama. 

Either way, Pfizer’s stockholders are probably hoping Starboard can pull a rabbit out of their hat and get that share price moving in the right direction again.

In the meantime, keep an eye on Pfizer going forward and as always stay safe and stay frosty, friends! Until next time…

P.S. Another winner! Friday morning's surprise alert ended the day with a nice 53% gain! Click here to upgrade to premium to make sure you don’t miss out on the next one. 

Stocks.News does not hold any positions in companies mentioned in the article.