Former Pfizer CEO Ian Read and ex-CFO Frank D’Amelio have decided to step away from Starboard Value’s campaign at the struggling pharmaceutical giant following news of the activist’s stake in the company. In a joint statement made through investment bank Guggenheim Securities, Read and D’Amelio expressed their full support for Pfizer CEO Albert Bourla as well as the current board and management. The company’s shares have remained relatively flat for the year and are down by approximately 50% from their 2021 highs.
The decision by Read and D’Amelio to withdraw from Starboard’s campaign comes as Pfizer’s board deals with the activist’s efforts. This move is considered highly unusual for executives to initially join an activist campaign and then abruptly leave. It remains unclear what impact this breakaway will have on Starboard’s campaign, as a representative for the activist fund has not provided any comment. Starboard, known for its tenacious activism, has built a large position in Pfizer, valued at around $1 billion.
Jeff Smith, managing member at Starboard, has previously launched campaigns at technology companies like Autodesk and Salesforce. While Starboard primarily focuses on the technology sector, it has also invested in other industries such as Starbucks and News Corp. The decision of Read and D’Amelio to depart from Starboard’s campaign just days before a scheduled meeting between CEO Bourla and Jeff Smith has raised questions about the future direction of the activist’s efforts at Pfizer.
Despite the breakaway of former Pfizer executives, Read and D’Amelio, from Starboard’s campaign, they have expressed confidence in the current board and management’s ability to deliver shareholder value over time. Guggenheim Securities, which has a longstanding relationship with Pfizer in dealmaking, issued the joint statement on behalf of the ex-CEO and CFO. The about-face by Read and D’Amelio is a significant development in the ongoing battle between Pfizer and Starboard, with implications for the pharmaceutical firm’s future strategic direction.
Pfizer’s shares have been stagnant for the year and have experienced a significant decline from their 2021 highs. The company is facing pressure from activist investors like Starboard, who seek to drive shareholder value through changes in management or strategy. With the departure of Read and D’Amelio from Starboard’s campaign, the dynamics of the ongoing activist efforts at Pfizer are uncertain. It remains to be seen how this development will impact the company’s future trajectory and potential responses from other stakeholders.
Representatives for Pfizer have not provided any comment on the recent developments involving the departure of former executives from Starboard’s campaign. The pharmaceutical giant continues to navigate challenges in the market, including pressure from activist investors and the need to drive shareholder value. As the situation unfolds, investors and industry analysts are closely watching to see how Pfizer will address these challenges and position itself for future growth and success in the pharmaceutical sector.
