(Bloomberg) — Pfizer Inc. raised its forecast Tuesday, stepping up its attempts to fend off public criticism from activist investor Starboard Value LP, which accused senior management of mismanagement.

Pfizer shares have fallen by more than half since their peak in December 2021. Since then, CEO Albert Bourla has embarked on a series of $70 billion deals, including buying it last year for $43 billion dollars from cancer specialist Seagen Inc.

Starboard has reportedly taken a billion-dollar stake and is pushing for change, saying management’s strategy has erased $20 billion from the company’s market value. Starboard CEO Jeff Smith delivered a scathing critique last week, blaming Pfizer management for a series of perceived missteps, including overspending on contracts and anemic ROI on internal R&D. He also said replacing Bourla “could make sense.”

What Bloomberg Intelligence says:

Pfizer’s third-quarter EPS of 42 cents – thanks to higher Paxlovid sales and tight cost controls – looks encouraging, but the increase of just 30 cents in full-year guidance suggests that this could reflect the timing of cost phasing relative to a sustainable investment level. The recent involvement of activist shareholder Starboard Value has sparked discussions about possible strategic changes, but Pfizer remains (for now) firmly focused on moving the pipeline to late stage and reducing the base. costs.

— John Murphy, analyst at Bloomberg Intelligence. Read the research here.

Adjusted earnings for 2024 will be $2.75 to $2.95 per share, Pfizer said in a statement Tuesday, up 30 cents from the previous projected range. The company also raised its revenue forecast and shares rose 1.2% before U.S. markets opened.

Bourla’s successes against Covid continue to help him. Paxlovid’s third-quarter sales soared to $2.7 billion, well above analysts’ estimates, thanks to a summer wave of infections. While Pfizer recorded no sales of the antiviral in the United States during the same period last year, sales soared to more than $2.3 billion in the third quarter. These sales included the delivery of one million doses to the US Strategic National Stockpile, representing revenue of $442 million.

Covid vaccine sales also beat estimates, although the company attributed the strong performance to timing, as the new booster came out earlier than the previous year.

Starboard briefly allied itself with former Pfizer CEO Ian Read and former CFO Frank D’Amelio. The two men switched sides shortly after, saying in a statement released late in the evening that they now supported Pfizer’s current management. The next day, Starboard accused Pfizer of threatening the former executives with legal action unless they issued a statement in support of Bourla.

(Recast ahead of time, adds Covid sales details, analyst comment.)

©2024 Bloomberg LP