After receiving the offer, Pfizer enters the highly lucrative obesity drug market, although Metsera’s products are still years away from commercialization. The outcome is a setback for Novo, which has been trying to regain ground lost to US rival Eli Lilly.
US pharmaceutical giant Pfizer has secured a $10 billion acquisition of obesity drug developer Metsera, ending an intense bidding contest with Danish competitor Novo Nordisk.
Metsera agreed to Pfizer’s improved offer late Friday, citing concerns over US antitrust issues with Novo’s bid, which it had previously considered superior. Novo Nordisk announced Saturday it would withdraw from the bidding.
After receiving the offer, Pfizer enters the highly lucrative obesity drug market, although Metsera’s products are still years away from commercialization. The outcome is a setback for Novo, which has been trying to regain ground lost to US rival Eli Lilly.
Pfizer seemed to be on track to complete the deal in September, but Novo restarted the competition with an unsolicited bid, starting a battle in the expanding weight-loss industry. Pfizer wanted to establish a presence in the obesity market after years of struggling to develop its own weight-loss drug.
According to the company, Pfizer will pay $86.25 per share in cash, a 3.69% price increase from Metsera’s closing price on Friday. This includes $65.60 per share in cash plus a contingent value right that could provide up to an additional $20.65 per share. Novo Nordisk stated that it would not increase its bid further.
The company stated that Novo Nordisk would not offer a much higher price to buy Metsera. It will continue to develop its business and take acquisition opportunities aligned with its goals while advancing its own obesity treatment pipeline. A source close to Novo said the company’s final bid reflected what it saw as the pharmaceutical firm’s full value, emphasising the deal was never critical to Novo’s plans.
The bidding war pushed Metsera’s shares up nearly 60% over the past week, raising its market value to $8.75 billion. For a time, Novo seemed to have the advantage as it wanted to regain its dominant position in the obesity drug space, which it lost to Eli Lilly.
Metsera explained that Novo’s proposal has many legal and regulatory risks. It was in reference to the US Federal Trade Commission, which warned both companies that their proposed deal could violate US antitrust laws. Novo maintained its offer was compliant with such regulations.
Pfizer stated that it was satisfied after reaching a revised agreement with the company, expecting to finalize the merger soon after Metsera’s November 13 shareholder meeting.
Analyst Courtney Breen at Bernstein noted that the $10 billion deal would lead to an optimistic future for Metsera, with Pfizer needing to project $11 billion in revenue by 2040, nearly twice Metsera’s current expectations. She also stated that there is growing scepticism about the long-term pricing of GLP-1 drugs, which could squeeze profit margins.
Metsera’s board has recommended that shareholders approve Pfizer’s revised offer. The company is not yet profitable, and analysts anticipate further losses as its drug candidates continue to be in development.
The bidding war drove up the acquisition price from Pfizer’s initial $7.3 billion offer in September. Former Pfizer R&D chief John LaMattina compared the contest to Pfizer’s $90 billion hostile takeover of Warner-Lambert in 2000 for control of Lipitor, noting that while this is a smaller deal, Pfizer must see Metsera’s pipeline as vital for its future.
Both analysts and investors remarked on the unusually heated competition for Metsera, whose obesity drugs are still in early stages but could be crucial in a market some predict will reach $150 billion by the early 2030s.
“This is a Game of Thrones-level of play,” commented Peter Kolchinsky, managing partner at RA Capital, a major Metsera shareholder, before the final offer was accepted.
Metsera’s leading experimental obesity treatments include MET-097i, a GLP-1 injectable, and MET-233i, an amylin mimetic, which Leerink Partners analyst David Risinger projects could together achieve $5 billion in peak annual sales.