Amid Pfizer’s Struggle With Declining Demand For COVID-19 Treatments, Activist Investor Starboard Value Invests $1 Billion In Pharma Giant: Report – Pfizer (NYSE:PFE)

Activist investor Starboard value has invested about $1 billion in it Pfizer Inc PFE. The strategic move comes as the pharmaceutical giant grapples with a slump in demand for its COVID-19 vaccines and treatments.

What happened: Starboard has hired former Pfizer executives, Ian Lees And Frank D’Amelioto help revitalize the company’s performance, The Wall Street Journal reported, citing people familiar with the matter.

Pfizer’s market value was about $162 billion on Friday, with shares having halved from 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% gain.

Under pressure from investors, becomes CEO of Pfizer Albert Bourla is tasked with getting the company back on track after overestimating demand for pandemic-related products. The company has also faced competition from cheaper alternatives for key products such as Eliquis and Xeljanz.

Starboard, led by Jeff Smitis known for its active investments in various sectors, including technology and pharmaceuticals. The company has previously worked with companies like Salesforce And Bristol Myers Squibbdemonstrating its influence on business strategy and governance.

Pfizer and Starboard Value did not immediately respond to Benzinga’s request for comment.

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Why it matters: Pfizer’s recent divestiture of a $3.3 billion stake in HaleonReducing share ownership from 22.6% to 15% signals a strategic shift. The move comes as Pfizer remains Haleon’s largest shareholder despite the sale. The company’s financial maneuvers are critical in dealing with the challenges posed by declining vaccine demand.

Starboard Value’s investment history, such as its stake in Match group and investments in Autodeskemphasizes its strategy to push business changes to increase value.

Price promotion: Pfizer Inc. closed Friday at $28.58, up 0.85% for the day. The stock rose 0.14% in after-hours trading. Pfizer shares are down 3.87% so far this year, according to data from Benzinga Pro.

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This story was generated with the help of Benzinga Neuro and edited by Kaustubh Bagalkote