A global pandemic was sending Pfizer's stock to record highs as the company became the first in the world to deliver a COVID-19 vaccine. The pharmaceutical giant had, however found it difficult to steer a new course following the subsidence of the global health crisis. The shares of the company rose 3% on Monday, however, on reports that famed activist investor Starboard Value had accumulated a $1 billion stake in the New York-based drugmaker to force changes it believes can be ignited as a spark for turnaround.
Pfizer shares soared to an all-time high of $61.25 in December 2021 after its COVID shot and its antiviral treatment Paxlovid enabled billions to return to work, school, and public life. The company hit a record $100 billion in sales last year, up from just $40 billion three years ago.
The drugmaker has lost nearly $180 billion in market cap since, though, as its stock plunged more than 50%. Shares traded under $30 as of Monday's open. Part of the problem was that the company overestimated demand for its COVID-19 products in a post-pandemic landscape, with revenue falling to around $58.5 billion last year.
Other new, lower-priced competition will assail Pfizer's blood thinner Eliquis and its arthritis treatment Xeljanz. While Eli Lilly and Novo Nordisk have led the way in the booming obesity drug market, projected to capture $130 billion in sales by the end of the decade, Pfizer's first attempt at a weight-loss pill disappointed. The company is now developing a once-daily pill it hopes will eventually compete with Novo's blockbuster injectable semaglutide sold as Wegovy and Ozempic. Pfizer also took big bets on cancer drugs as part of a $70 billion M&A strategy since 2020 that has raised some eyebrows among analysts. The pharma giant recently pulled a drug for sickle cell disease it got in a $5.4 billion acquisition of Global Blood Therapeutics.
As of 2019, with current CEO Albert Bourla, Pfizer has wildly increased its R&D budget and axed a business related to off-patent drugs. Though Pfizer unveiled a new multi-year cost-cutting program, building on plans from a year ago, the new investor is likely looking for other further changes.
Reports Starboard is recruiting former Pfizer executives Ian Read and Frank D'Amelio to assist with its effort, and both men said they were interested in joining in. Under Read, who ran the drugmaker as CEO from 2010-18, the company has maintained its core vaccine and cancer focus. D'Amelio was CFO from 2007 to 2021.