Sources claim that Starboard Value, an activist investor, has a $1 billion stake in Pfizer and has enlisted the assistance of former executives.

• According to sources, Starboard Value holds a roughly $1 billion stake in Pfizer.
• Jeff Smith's activist fund is considering bringing on former Pfizer CEO Ian Read and ex-finance chief Frank D'Amelio, although their roles are not yet clear.
• The drugmaker is facing a serious struggle, with declining demand for its Covid-19 medicines leading to aggressive cost-cutting measures.

According to sources, pharmaceutical giant is facing a turnaround effort led by activist investor Starboard Value, who holds a roughly $1 billion stake in the company.

The details of the activist's plans remain unknown, but it is reported that former Pfizer CEO Ian Read and ex-finance chief Frank D'Amelio have shown interest in supporting Starboard's turnaround.

Pfizer's current leadership, under CEO Albert Bourla, has deviated from the historically strict cost structure and focus on developing new drugs.

During the Covid-19 pandemic, Pfizer's revenue and free cash flow increased significantly due to its fast-tracked vaccine. However, its stock has underperformed, trading approximately 30% lower than it did in 2019. This can be attributed to Pfizer's expensive acquisition strategy, which has resulted in nearly $70 billion in M&A since 2020. Some analysts have raised concerns about the return on these acquisitions.

Starboard is concerned about Pfizer's acquisition of Global Blood Therapeutics, which resulted in the company pulling a drug for sickle cell disease that it acquired just two years ago for roughly $5 billion. Despite the company's claims in September that the drug Oxbryta brought in a little over $300 million last year, Starboard believes that such dealmaking is a cause for concern.

Pfizer's chief from 2010 to 2019 inherited a company in turmoil, but shares more than doubled during his tenure as executives implemented a cost- and core-focused culture. However, Starboard now believes the company has moved away from this culture.

Despite taking measures to reduce expenses, the company has lost over $100 billion in shareholder value since the Covid-19 pandemic.

Jeff Smith runs Starboard, which has traditionally concentrated on the technology industry. Currently, Starboard is challenging News Corp's dual-class share structure and has recently launched campaigns at Autodesk, Salesforce, and Match Group.

The Wall Street Journal earlier reported news of Starboard's stake.

A Pfizer spokesperson declined to comment on "speculation and rumor."

— CNBC's Angelica Peebles contributed to this report.