Post-Hoc: What does an ac­tivist want with Pfiz­er?

The news that Pfiz­er has an ac­tivist isn’t a sur­prise. For the last few months at End­points News, we’ve been ask­ing which drug­mak­er might find an in­vestor in its stock ag­i­tat­ing for change.

Pfiz­er be­came the hottest phar­ma com­pa­ny in the world dur­ing the pan­dem­ic, on­ly to see its shares drop by more than half as it strug­gled to find its post-pan­dem­ic foot­ing, in­clud­ing a hand­ful of pipeline set­backs and at least one ma­jor deal gone bad.

And as an ac­tivist, Star­board Val­ue fits the role, too. The in­vestor has gone af­ter big health­care tar­gets be­fore, in­clud­ing Bris­tol My­ers Squibb, Cern­er and Per­ri­go. Out­side of health­care, it’s tak­en ac­tivist po­si­tions in com­pa­nies like News Corp and Star­bucks.

But every time we’ve talked about Pfiz­er and an ac­tivist, one thing keeps com­ing up: The drug­mak­er has al­ready made many of the moves an in­vestor might push.

For ex­am­ple, Pfiz­er an­nounced $3.5 bil­lion in cost cuts in Oc­to­ber of 2023, then added an­oth­er $500 mil­lion in De­cem­ber, and tacked on a new round of $1.5 bil­lion in May of this year. It has al­so sold a $3.3 bil­lion chunk of its stake in Ha­le­on, the joint con­sumer ven­ture spun off with GSK, rais­ing bil­lions of dol­lars in cash. Its com­mer­cial leader, An­gela Hwang, left the com­pa­ny. R&D leader Mikael Dol­sten is de­part­ing, like­ly to be re­placed by an out­sider. And CEO Al­bert Bourla has re­peat­ed­ly ac­knowl­edged that the stock price $PFE and the com­pa­ny’s per­for­mance aren’t where he wants them to be.

If Pfiz­er has pulled many of the small- and medi­um-sized levers at its dis­pos­al, what’s left?

It’s not hard to imag­ine that Bourla’s job, or at least a voice on the board, is what Star­board could be af­ter. (An­oth­er op­tion could be his board chair­man­ship.) In the Wall Street Jour­nal sto­ry that broke the news of Star­board’s $1 bil­lion stake, there were few de­tails, but one stood out: The ac­tivist has been talk­ing to Pfiz­er’s for­mer CEO Ian Read and for­mer CFO Frank D’Ame­lio, and the for­mer ex­ec­u­tives have “ex­pressed in­ter­est in help­ing.”

Men­tions like that don’t hap­pen by ac­ci­dent, and it’s hard not to read as a warn­ing to cur­rent man­age­ment.

So, what comes next? Part of that de­pends on what Star­board wants — big­ger changes at the com­pa­ny, seats on the board or a shift in man­age­ment. But it’s a warn­ing to every health­care com­pa­ny that when it comes to suc­cess, mem­o­ries are short.

(This is Post-Hoc, our lat­est newslet­ter with analy­sis and dis­patch­es from our jour­nal­ists. To sign up for fu­ture edi­tions, click here.)