Investing.com-- Activist investor Starboard Value has taken an around $1 billion stake in Pfizer Inc (NYSE:PFE) and wants the drugmaker to make sweeping changes to turn around laggard performance, the Wall Street Journal reported on Sunday.

Starboard has approached two former Pfizer executives -- Ian Read and Frank D’Amelio -- who have in turn expressed interest in helping, the WSJ report said. Read was Pfizer's former CEO, while D’Amelio was its CFO until 2021.

Pfizer benefited greatly from a soaring need for its vaccine during the COVID-19 pandemic. But demand has cooled over the past two years, while its earnings and share price performance have disappointed investors.

The firm was also accused of lacking discipline in its pandemic-era dealmaking, and has lagged its rivals Eli Lilly and Company (NYSE:LLY) and Novo Nordisk (NYSE:NVO) in rolling out highly popular weight loss drugs. In late-2023, Pfizer issued a revenue warning and a disappointing 2024 outlook, along with a $3.5 billion cost-cutting drive.

Shares in Pfizer, which are now trading below pre-pandemic levels, were higher prior to the opening bell on Wall Street on Monday following the report.

In a note to clients, analysts at BMO Capital Markets said that thye have "sensed investor frustration" with Pfizer CEO Albert Bourla since at least the beginning of 2023, although they flagged that dismissing him "is unlikely to fix the story and immediately re-rate shares."

"We understand why an activist might think that Pfizer is the right story to get involved in, but management appears to actually be undertaking many of the corrective actions to right the ship," they argued. "Staying the course and focus is usually the right answer in the long-run."

Starboard had also recently taken a stake in Starbucks (NASDAQ:SBUX) with an aim to boost the coffee giant's share price. It has also been active in the technology sector.

(Ambar Warrick contributed reporting.)

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