Here are the facts that activist critics of Pfizer CEO Albert Bourla are missing, according to a Yale analysis

We don’t know for sure what Starboard’s turnaround plan contains. It has allegedly created an “extensive 50-page slide deck on its turnaround plans” which it is yet to reveal publicly. But one can easily guess what the primary complaints about Bourla might be since these criticisms have now been repeated so many times in anonymous leaks to the media: that Pfizer stock has gone sideways under Bourla’s watch; that he supposedly overpaid in several major acquisitions and squandered tens of billions of Pfizer’s COVID-19 vaccine windfalls; that Pfizer’s business is in deep trouble after the demand for COVID vaccines fell off faster than anyone thought possible.

There’s just one problem: These criticisms are simply not factual, no matter how many times they may be repeated, as we reveal in our original detailed analysis and 36-page slide deck.

The ‘haves vs. have nots’ of the GLP-1 revolution

Of course, what is undeniably true is that Pfizer’s stock price has gone sideways during Bourla’s tenure, to the understandable frustration of some shareholders. However, the underperformance of Pfizer stock isn’t all that it appears to be. In fact, Pfizer stock has performed in line with, if not a bit stronger than, pharmaceutical peers such as Merck, Johnson & Johnson, and Bristol-Myers Squibb this year.

Pharma stocks have been reduced to a “haves vs. have nots”: a stark divide between GLP-1-driven stocks, namely Novo Nordisk and Eli Lilly who have soared to record heights, and all other pharma companies, many of whom languish trading near record-low multiples as investor sentiment plummets. This is a reversal from the COVID-19 pandemic when those now-soaring stocks (Novo Nordisk and Eli Lilly) looked weak for having missed the COVID vaccine and therapeutics boom and were attacked by critics, while COVID-powered stocks benefitted.

To pin the blame for see-saw swings in the stock market on Bourla, considering Pfizer stock is performing exactly in line with non-Novo Nordisk, non-Eli Lilly pharma peers, one would have to fault Bourla for not developing a GLP-1 drug sooner, despite the fact virtually the entire pharmaceutical industry—like virtually every investor—was caught off guard by the speed with which these new obesity drugs were commercialized.

Mergers and acquisitions

Similarly, the persistent critique that Dr. Bourla overpaid and made bad deals during his post-COVID M&A spree—a criticism that seems to have become a rallying cry for investors upset with Bourla’s leadership—isn’t all that it appears to be.

For sure, one of Pfizer’s four biggest deals, the smallest deal of the four, Pfizer’s acquisition of Global Blood Therapeutics, has been a disaster so far by most objective measures (though not unsalvageable).

However, the return on investment for the three larger deals—the $6.7 billion acquisition of Arena, the $11.6 billion acquisition of Nurtec from Biohaven, and most importantly, the transformative, bet-the-farm $43 billion acquisition of Seagen—seem to be surpassing even the more optimistic internal and external projections so far, as we describe in more depth in our original analysis.

And regardless of the ROI numbers, a simple fact that many seem to have forgotten is that it is just plain too early to judge these deals as defeats. So much of the value of these deals is locked up in the research and development (R&D) pipeline of prospective drug candidates that Pfizer acquired—and it’ll take many years for these pipeline projects to reach maturation. As the old pharma saying goes, the trouble with research is you don’t know whether you’ve done the right thing for 10 years. Until that pipeline reaches maturity, writing off these deals as failures is equivalent to throwing in the towel after the first inning with eight innings left to go.

That is the trap that critics have consistently fallen into. Dating back decades, growth through M&As has been the Pfizer way, and each time, financial markets have mistakenly underestimated Pfizer’s acquisitions only for those deals to pay off handsomely with time, as we show in our analysis.

For example, despite initial investor criticism of Pfizer’s $90 billion acquisition of Warner-Lambert in 2000, the deal eventually paid off many times over as Lipitor and other wonder drugs reached maturity, with additional revenues brought in from the divestiture of some ancillary assets that came with the deal such as Entenmann’s Bakery and Schick Razors.

As we show, similar criticism greeted Pfizer’s $64.3 billion acquisition of Pharmacia in 2002, as well as Pfizer’s $68 billion acquisition of Wyeth in 2009 (including its key product Prevnar), both of which ended up paying off with time. Each time, the markets fell into the same trap: the chronic undervaluation of high-potential pipeline drugs, which investors had little visibility into, understanding of, or patience for. While it took several years in some cases, many of those unloved pipeline drugs ended up turning into blockbusters that have been massively profitable for Pfizer.

Some critics question whether Bourla was right to spend on M&A at all. Some shareholders have even openly advocated for a large special dividend or accelerated share repurchases instead of deals. But the Pfizer board—one of the most qualified boards in America with stars such as Coca-Cola CEO James Quincey, State Street CEO Cyrus Taraporevala, and former Food and Drug Administration commissioner Scott Gottlieb— knew that such short-sighted moves would have mortgaged Pfizer’s future and imperiled the company.

Because Pfizer’s current blockbuster drugs are limited to 10–20-year patent periods, Pfizer must constantly seek out new, promising drug candidates to replace lost revenues as patents roll off its books periodically. With some ~$17 billion in revenues which will start rolling off Pfizer’s books over the next five years, Pfizer had no choice but to replenish the R&D pipeline through M&A, and could not afford to wait for more favorable entry points. Plus, it’s not like Bourla has overlooked capital returns to shareholders during his M&A spree, paying out over $50 billion in dividends since he became CEO, continuing the streak of 345 consecutive quarters in which Pfizer paid dividends, all while maintaining its status as the highest dividend-yielding pharma company.

Investing in the business through M&As is often unpopular with short-term focused investors—but can realize outsized returns with enough time, a pattern that holds true across industries. Five years ago, I celebrated Occidental CEO Vicki Hollub’s acquisition of Anadarko Petroleum and stood by her when Carl Icahn and other activist investors sought to undo the deal when oil prices collapsed during the pandemic. Fortunately, buoyed by support from Warren Buffett, Occidental beat back Icahn’s challenge and rode out the economic cycle back to high oil prices, allowing Anadarko to pay for itself several times over.

Product pipeline

Beyond the persistent myths surrounding Pfizer’s M&A track record, there is also a persistent narrative that Pfizer’s business is in trouble after demand for COVID-19 vaccines fell off faster than anyone thought possible. Bourla’s pandemic heroics, for which he has been widely saluted, need no retelling. There is no dispute that the brilliant partnership between Pfizer and BioNTech, his leadership through later-stage vaccine development and successful clinical trials, with seamless production execution and unrivaled distribution as well as such follow-up therapeutics as Paxlovid, profoundly changed the course of public health history and global economic resilience in hugely positive ways.

Pfizer management has taken accountability for being too optimistic in their recent aggressive forecasts for COVID-19 vaccine demand and are wisely right-sizing their cost structure accordingly. However, by analyzing Pfizer’s sales product line by product line, it’s clear that virtually the entirety of Pfizer’s revenue decline was caused only by the drop-off in COVID-19 vaccine demand, and nothing else. All of Pfizer’s other major product lines have seen significant year-over-year growth, including record growth in the crucial oncology division, with cancer therapies poised for continued rapid revenue growth in the years ahead.

It’s easy to miss the green shoots of progress as Pfizer’s post-COVID reset gains steam: Pfizer now has no less than 112 promising drug candidates in its vaunted pipeline, including several recent launches with blockbuster potential. Since Bourla became CEO, Pfizer has had a higher clinical trial success rate than many industry peers—a stark turnaround from the worst R&D returns of any pharma company under prior leadership.

A dangerous playbook

This is exactly why the drastic cost cuts that Starboard is apparently advocating for now are so dangerous for Pfizer. These cost cuts take a page out of Read’s old playbook. As noted by CNBC’s Jim Cramer, “Ian Read, very tough guy, he cut costs, I was scared of him. He was humorless.” At the end of Read’s tenure, this approach left Pfizer’s pipeline depleted, with only a couple dozen project launches left. Furthermore, Read sold off portions of Pfizer’s businesses which provided consistent revenue streams, including dumping the profitable consumer health and animal health divisions for bottom-of-the-barrel prices. At a company with a long history of predecessor CEOs sticking around and undermining successors, as documented in riveting style by Fortune in 2011, the Starboard-Read playbook for Pfizer of shrinking its way to growth may result in shrinking its way into oblivion.

Like all CEOs, with the wisdom of hindsight, perhaps Pfizer and Bourla may have timed some moves differently. However, our factual analysis of Pfizer’s performance suggests that some misleading narratives about Bourla’s leadership that have been put forward have been distinctly unfair.

We know, like, and respect both sides. We previously supported several of Starboard Value’s campaigns, such as their successful efforts at Darden, and work closely with Jeff Smith’s partners at his prior firms. Similarly, Albert Bourla has attended Yale CEO Summits and was a Yale Legend of Leadership award winner in 2021, like peer pharma giants such as Merck CEO Ken Frazier, Johnson & Johnson CEO Alex Gorsky, Regeneron Co-Founders Len Schleifer and George Yancopoulos, former Amgen CEO Gordon Binder, and many others. But we have no conflicts of interest that get in the way of offering our independent, objective analysis and calling it as we see it.

As Starboard ramps up its engagement with Pfizer with a meeting scheduled next week, we believe Starboard will have the opportunity to play a constructive role in helping Dr. Bourla and the impressive Pfizer board steer the company toward more success. We hope Starboard seizes this genuine opportunity to be constructive—which would be a win for all involved—rather than falling into the fact-free chasms and ad hominem attacks that some anonymous sources seem to have blundered into.

More must-read commentary published by Fortune:

The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.