Pfizer CEO’s job is at risk. A shot of discipline could help.

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Subscribe to enjoy similar stories. When former executives team up with an activist investor to “help" a struggling company, it is often bad news for the current chief executive. That is one implication behind activist investor Starboard Value’s $1 billion stake and its push to make changes at Pfizer, which The Wall Street Journal reported has support from former Pfizer Chief Executive Ian Read and former Chief Financial Officer Frank D’Amelio.

Another important takeaway is that investors are eager to see a more disciplined and focused development strategy from the company. With Pfizer’s stock down more than 30% over the past two years, speculation is growing that Albert Bourla’s position as CEO might be in jeopardy. “We’ve sensed investor frustration with CEO Albert Bourla since at least the beginning of 2023," BMO Capital Markets analyst Evan Seigerman wrote.

Don Bilson at Gordon Haskett wrote that Starboard might have “positioned itself to get the old band back together with Ian on guitar and Frank playing drums." He noted that the activist effort has some “Disney vibes," alluding to Bob Iger’s return to the helm of Walt Disney after his successor was ousted. Pressuring Bourla to step down might offer frustrated investors an easy scapegoat, but pharmaceutical companies’ history suggests a mere change at the top wouldn’t be enough to lift the stock price over the long term. As Seigerman noted, for example, the sudden departure of Gilead Sciences CEO John Milligan in 2018 did little to lift the company’s struggling shares over the past six years.