The corporate showdown between Pfizer and activist hedge fund Starboard Value escalated on Thursday, as Starboard called on the pharmaceutical giant to investigate alleged pressure exerted on former executives who had initially supported its campaign, according to a report by Reuters.

Starboard, led by Jeffrey Smith, has amassed a $1bn stake in Pfizer, and is pushing for changes in leadership and strategy at the $167bn business. The hedge fund accused Pfizer or its representatives of intimidating two former executives – Ian Read, the company's ex-CEO, and Frank D'Amelio, its former CFO – who had initially aligned with Starboard but later withdrew their support.

Smith's letter to Pfizer's board called for the creation of a special committee to probe alleged “coercive conduct”, claiming the former executives reversed course after threats of litigation, clawbacks of compensation, and the cancellation of unvested stock awards unless they publicly backed Pfizer CEO Albert Bourla.

Hours earlier, Pfizer's financial advisor, Guggenheim Securities, announced that Read and D'Amelio had stepped back from Starboard’s campaign, voicing their full support for Bourla.

Pfizer has yet to comment on these developments.

The intensifying conflict comes just days before Pfizer and Starboard are set to meet for the first time next Wednesday. While Starboard has not disclosed specific demands, it has criticised Pfizer's declining stock performance under Bourla, pointing to a dramatic drop since 2019 when Bourla succeeded Read. Over the last year, Pfizer’s stock has fallen 11%, although it has seen a slight rebound in recent days, trading at $29.60.

Starboard also highlighted concerns over Pfizer’s $70bn in acquisitions, which some Wall Street analysts have also questioned.