A Turbulent Drama: The Battle for Pfizer

Albert Bourla, CEO of Pfizer, was in Ireland for a board meeting when he received a puzzling email that suddenly threw his weekend into turmoil. The empty message was from Frank D’Amelio, his former CFO, and was also sent to members of the Pfizer board as well as a representative from Starboard Value. The latter is a hedge fund known for its activist campaigns against major companies, including heavyweights like Bristol Myers Squibb and News Corp. The email inadvertently revealed Starboard's plan to acquire a multi-billion-dollar stake in Pfizer and target the company as well as Bourla himself. The shock for Bourla was twofold: besides D’Amelio, Ian Read, his predecessor who once supported his promotion to CEO, had also allied with Starboard. In this extraordinary week, Bourla and key members of his board received calls from the former executives. They were urged to listen to Starboard, who blamed Bourla for Pfizer's recent underperformance. Yet within three days, D’Amelio and Read surprisingly withdrew their support from Starboard and publicly endorsed Bourla and the current management. On Thursday, Starboard CEO Jeff Smith made serious allegations against Pfizer. He spoke of unfair practices and sought to understand the reasons behind Read and D'Amelio's sudden reversal. Smith suspected pressure from Pfizer and demanded an independent investigation. Although the events seem chaotic, they reflect the growing shareholder dissatisfaction. Despite the successes during the pandemic, Bourla is increasingly under pressure; his ability to innovate is being questioned. The future of Pfizer under Bourla’s leadership remains uncertain. Starboard's leverage could lie in demanding changes in management or the board. In the coming week, Bourla will have the opportunity in a meeting with Smith and Sullivan to prove whether the future of Pfizer will be shaped by innovation or stagnant ideas. The outcome of this showdown could have long-term implications for the fate of the pharmaceutical giant.