DAVOS, Switzerland—Albert Bourla has ambitious plans to turn around the situation at
Pfizer.
The market will decide if talk is cheap, but at least for now the stock looks cheap, or so the biopharma CEO wants investors to believe. And he put his money where his mouth is.
Bourla says he has poured his pension into company shares, personally upping the ante on Pfizer’s plan to deliver on blockbuster drugs after a series of pricey deals and big spending on research and development. As the company faces revenue pressures from a steep patent cliff and lower Covid vaccine demand, the stakes are high.
“All my pension I put into Pfizer stock,” Bourla told Barron’s Editor at Large Andy Serwer on Monday, in a recording of At Barron’s on the sidelines of the World Economic Forum. “I’m all in.”
Regulatory filings with the Securities and Exchange Commission show that Bourla conducted an intra-plan transfer in his Supplemental Savings Plan pension for nearly 376,000 Pfizer units of so-called phantom stock in mid-December. The phantom units will be settled in cash at a price of $26.63 each—$10 million altogether—when Bourla leaves the company, and may be transferred by him into an alternative investment account at any time. The company confirmed the transaction was made with holdings from a pension fund of Bourla’s.
It’s a personal bet on Pfizer executing a turnaround—one that Bourla wants to oversee himself, as Wall Street raises questions over the future of his leadership.
Pfizer stock has languished under Bourla, who began his tenure as chief executive five years ago with a strong start, completing a decadeslong plan to make the group a biopharma pure-play. And the company’s heroic effort on Covid-19 vaccines is one for the history books.
But the shares fell 43% in 2023, and the stock has slid almost 30% since Bourla took the reins. The latest disappointment came last month, with a 2024 revenue forecast that was billions of dollars short of expectations, not the first time in the past year that Pfizer has let investors down on guidance.
“2023 was a very disappointing year for us…it took us down from a position of strength,” Bourla told Serwer. “I plan to stay and I plan to turn around this situation.”
Pfizer’s future rests in R&D gumption of the sort that delivered the first Covid-19 vaccines approved in the U.S. The company is relying on in-house breakthroughs—including with artificial intelligence—as well as intellectual property picked up through a spate of multibillion-dollar deals in recent years.
That includes the pricey, $43 billion acquisition of biotech Seagen, which has a focus on cancer that could define Pfizer’s future. The company projects that it will reap $10 billion in annual revenue by 2030 from the acquisition, though analysts say Seagen’s four marketed products hold risks, including competition from other new drugs.
“One plus one equals three” in the case of Seagen and Pfizer together, Bourla says. “We should be able to do things that they wouldn’t be able to do before alone.”
Like acquisitions before it, Seagen will be key for Pfizer as the company braces itself to lose $17 billion in annual revenue between 2025 and 2030—on a revenue base of $52 billion next year, excluding Covid products—as a string of patents expire.
But the market hasn’t loved the deals. And attempts to bridge the gap from the patent cliff with in-house R&D—which analysts estimate topped $12 billion in 2023—have hit snags, including dumping two weight-loss pills that could have been a game-changing opportunity. “We will continue and I’m sure that successes will come,” Bourla says.
Speaking at the J.P. Morgan Healthcare Conference last week, Bourla outlined a focus on paying down debt and said there will be no more big acquisitions. Implying that stock buybacks are coming may be another attempt to placate Wall Street.
“It’s extremely important right now for us to make sure that execution is the king,” says Bourla. “Trust is something that you earn in drops and you may lose it in buckets. I don’t feel that I have a credibility issue right now. But it’s not what I feel or think. It’s about delivery.”
Pfizer stock is down 0.3% since the start of the year, lagging behind the
S&P 500
index and far behind rival
Eli Lilly & Co.
The Pfizer dividend yield is around 6% and analysts remain upbeat, with Pfizer stock garnering an average rating of Buy among analysts surveyed by FactSet, and a consensus target price implying upside of 9% from current levels.
“I think it is a very good investment,” says Bourla. And he’s taking his own advice.
—Josh Nathan-Kazis and Andy Serwer contributed to this article.
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