Pfizer CEO Albert Bourla has defended the drugmaker’s turnaround strategy in response to criticism from activist hedge fund firm Starboard Value, after reporting stronger-than-expected quarterly profits on the back of robust sales of its Covid-19 treatment Paxlovid, according to a report by Reuters.
Investors, though, remain unconvinced, with shares in the New York-based drugmaker dipping 1.3% to $28.48, amid calls for further proof of sustained improvement.
Bourla, on a call discussing financial results, responded to Starboard’s criticisms and outlined recent strategic changes, including cost-cutting initiatives, restructuring of top commercial management, and an upcoming appointment for Head of Research and Development. Starboard has urged Pfizer’s board to hold management accountable, questioning its ability to generate profitable new drugs either internally or through acquisitions.
Acknowledging room for improvement in shareholder returns, Bourla defended recent acquisitions, stating they were “transformational” and aligned with Pfizer’s long-term goals, particularly in oncology. Pfizer’s acquisition of Seagen for $43bn last year boosted its cancer treatment portfolio, which Bourla believes could significantly impact global health.
Following a pandemic-related drop in sales for its Covid-19 products, Pfizer has pursued strategic deals and a $4bn cost-cutting initiative to revitalise growth. The company reported Paxlovid sales of $2.7bn in the third quarter, far surpassing analyst expectations, and raised its annual revenue forecast for Paxlovid and Covid vaccine Comirnaty to $10.5bn from $8.5bn. Pfizer also increased its 2024 profit outlook, projecting earnings of $2.75 to $2.95 per share.
