(Reuters) -Pfizer ( PFE ) raised its annual profit forecast and handily beat quarterly sales estimates for its COVID-19 treatment on Tuesday, at a time when the U.S. drugmaker is facing pressure from activist investor Starboard over the pace of a turnaround.

Shares rose 3.2% to $29.81 in premarket trading after the company also topped third-quarter estimates.

Pfizer ( PFE ) has struggled with a sharp fall in sales of its COVID vaccine and antiviral pill Paxlovid from pandemic levels as demand waned.

It has turned to deals, such as its $43 billion purchase of cancer drugmaker Seagen, as well as two separate rounds of cost-cuts that aim to save as much as $5.5 billion by 2027 to counter the hit.

"The demand for Paxlovid seems to have stabilized at the current levels and appears to be closely correlated with each wave of COVID-19," CEO Albert Bourla said in prepared remarks.

Revenue from the antiviral treatment was $2.7 billion for the quarter, compared with analysts' expectations of $456.40 million.

COVID vaccine Comirnaty, which Pfizer ( PFE ) makes with German partner BioNTech, brought in quarterly sales of $1.42 billion, compared with expectations of $870 million, according estimates compiled by LSEG.

Pfizer ( PFE ) also raised its revenue expectations from Comirnaty and anti-viral treatment Paxlovid to $10.5 billion in 2024, up from its previous forecast of $8.5 billion sales.

Analysts expect sales of about $9 billion from both the products this year.

Pfizer ( PFE ) now expects annual profit to be in the range of $2.75 to $2.95 per share, compared to its prior forecast of $2.45 to $2.65.

On an adjusted basis, Pfizer ( PFE ) earned $1.06 per share, compared with the average analyst estimate of 62 cents, according to data compiled by LSEG.

Starboard Value, investors and analysts have said they want to see improved profitability from the cost cuts and revenue growth powered by its recent deals.

The hedge fund has called on Pfizer's ( PFE ) board to hold its management accountable for the company's underperformance.

(Reporting by Manas Mishra and Bhanvi Satija in Bengaluru and Michael Erman in New York; Editing by Sriraj Kalluvila)