Former Pfizer CEO Ian Read and ex-CFO Frank D’Amelio announced on Wednesday evening that they would step back from their involvement in Starboard Value’s activist campaign at the pharmaceutical giant. The decision comes just days after news broke that the activist hedge fund had acquired a significant stake in Pfizer, aiming to push for changes at the struggling company.
In a joint statement issued through investment bank Guggenheim Securities, Ian Read and Frank D’Amelio expressed their full support for current Pfizer CEO Albert Bourla and his leadership. The statement, confirmed to be authentic, indicated the former executives’ belief in the direction of the company, despite its recent stock performance, which has been flat this year and has fallen nearly 50% from its highs in 2021. “We are confident that over time they will deliver shareholder value,” Ian Read and Frank D’Amelio said, referring to Pfizer’s current board and management.
The two former executives had reportedly been in contact with several Pfizer board members shortly before news of Starboard Value’s stake became public on Sunday. Their decision to distance themselves from the activist campaign is considered unusual, especially given the high-profile nature of Starboard’s involvement. The hedge fund, led by Jeff Smith, is known for its aggressive activism, typically focusing on the technology sector but also taking stakes in major companies like Starbucks and News Corp this year.
Starboard, one of the largest activist funds in the industry, has amassed a $1 billion stake in Pfizer, according to previous reports from CNBC. Its involvement suggests that the fund believes there is significant value to be unlocked in Pfizer, which has faced challenges in the post-pandemic pharmaceutical landscape. Pfizer, despite its strong reputation and role in developing a COVID-19 vaccine, has seen its stock struggle as demand for vaccines and treatments has diminished.
Jeff Smith, the managing member of Starboard, has led successful activist campaigns at companies like Autodesk and Salesforce in recent months, and was expected to meet with Pfizer CEO Albert Bourla in the coming days to discuss potential changes. It remains unclear how the withdrawal of Ian Read and Frank D’Amelio will affect Starboard’s campaign, or whether it will impact the hedge fund’s strategy moving forward.
Representatives for both Pfizer and Starboard did not immediately respond to requests for comment, leaving the future direction of the activist campaign uncertain. However, the backing of Bourla by two of Pfizer’s former top executives may strengthen the current leadership’s position as they navigate pressure from Starboard.
