But Starboard’s complaints don’t stop there. It says that the company overpaid for its recent acquisitions, like the $43.4 billion it spent on acquiring the oncology drug developer Seagen. It also claims that Pfizer’s sales and earnings forecasting capabilities are less accurate than its competitors’, leading to large shortfalls between the revenue guidances it has told investors and what it actually accomplished.

Pfizer’s management has yet to respond, but they’re likely to, and soon.

Starboard’s only publicly stated and explicit demand of Pfizer’s board of directors so far is that it needs to “hold management accountable to achieve the appropriate returns on capital.” The subtext appears to be that it wants the CEO swapped out for someone else who can make more prudent investments in R&D, via either internal work or through acquisitions and licensing deals. It likely has some concrete suggestions for how to go about accomplishing those priorities as well.

Are Starboard’s arguments valid, and are the claims it’s making accurate? In large part, the answer to both these questions is yes. Pfizer has indeed encountered a slew of clinical-stage stumbles in recent years, and it’s also true that many of management’s statements about expected sales performance have ultimately been overly optimistic.

Similarly, the struggles of its weight loss and diabetes program have been somewhat exacerbated by the company’s reluctance to accept mediocre efficacy data on its face, and start from scratch with a new attempt. And while it’s somewhat subjective, it’s very plausible that it overpaid for certain businesses or pharmaceutical assets amid its binge of acquisition activity over the last few years.

With the exception of the failed clinical trials, which are in large part an unpredictable and inevitable reality of the industry, the buck for most of those pitfalls stops with upper management.

But more important than Starboard’s claims is that it’s now ensuring that there will be public feuding with Pfizer’s management and major shareholders. This feuding will generate bad press, and it has a significant chance of hurting Pfizer’s share price. It could also push management to take ill-advised actions in an attempt to save face or address the activist’s concerns. The company’s strategy is now something that’s a contested issue, rather than a unified plan.

All this makes Pfizer a riskier stock to invest in today than it was a year ago.

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Alex Carchidi has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Pfizer. The Motley Fool has a disclosure policy.

These 7 Blunt Words Just Opened a Can of Worms For Pfizer’s Stock was originally published by The Motley Fool