Pfizer has “significantly overpaid” for recent acquisitions: Starboard Value

Investment firm Starboard Value, which has launched an activist campaign against Pfizer (NYSE:PFE), upped the ante on the New York-based pharma giant on Tuesday, noting that the company has “significantly overpaid” for its acquisitions since 2022.

Presenting at the 2024 Active-Passive Investor Summit, Jeffrey Smith, CEO of Starboard Value, explained his activist stance on Pfizer (NYSE:PFE), a company credited with introducing the world’s first COVID-19 vaccine in partnership with Germany’s BioNTech (BNTX).

Smith noted that Pfizer (NYSE:PFE) has lost $20B–$60B in market value since 2019 and argued that the company lost value due to a variety of issues ranging from capital allocation and R&D efficiency to errors in forecasting and budgeting.

His presentation of 74 slides detailed Pfizer’s (PFE) recent setbacks, including a trial failure for the company’s oral obesity candidate danuglipron in December and the recent market recall of sickle cell disease therapy Oxbryta.

A drug projected to have over $3B peak sales potential, Oxbryta was added to Pfizer’s (PFE) portfolio following its $5B acquisition of Global Blood Therapeutics in 2022.

“For large pharma companies, like many other companies, it is critical to have the discipline to achieve the right return on investment,” Smith said.

“We believe the Board needs to actively hold management accountable for earning appropriate returns on R&D and M&A moving forward.”