Pfizer, Metsera $10bn marriage back on after rough patch

Pfizer has won the battle to take control of obesity drug developer Metsera, after rival Novo Nordisk said that it would not increase its offer for the company above $10 billion.

After a frenetic few days that started with an unsolicited bid by Danish group Novo Nordisk that tried to entice Metsera away from its September engagement with Pfizer – which initially turned the New York biotech's head – it has now "reaffirmed" its support for Pfizer's sweetened deal.

Both Novo Nordisk and Pfizer offered $86.25 per share for Metsera, with Pfizer's offer providing more in upfront cash. The clincher seems to have been the Federal Trade Commission (FTC) questioning the legality of some elements of Novo Nordisk's proposal, after waving through Pfizer's bid without issue.

While those may have been ironed out, it is likely that the risk of a potentially lengthy delay in getting Novo Nordisk's deal over the line, coupled with the risk that lawsuits filed by Pfizer might scupper the agreement, prompted Metsera's board to switch its allegiance back to its original suitor.

In a statement, the company said that the amended merger agreement with Pfizer "represents the best transaction for shareholders, both from the perspective of value and certainty of closing."

The company also confirmed that it had received a call from the FTC detailing possible risks associated with proceeding with the Novo Nordisk merger under US antitrust laws.

Pfizer's lawsuits also claimed that a merger with Novo Nordisk would reduce competition in the weight-loss therapy market, given the Danish company's strong competitive position with blockbuster GLP-1 agonist Wegovy (semaglutide). Pfizer's own efforts to develop obesity therapies were scuppered by toxicity issues.

Metsera said it expects the Pfizer deal to close promptly after a stockholder meeting scheduled for this coming Thursday (13th November). If it passes, shareholders will receive $65.50 a share in cash upfront and a further $20.65 per share, dependent on certain clinical milestones for Metsera's two clinical-stage obesity candidates being met.

Novo Nordisk, which has been trying to shore up its position in obesity in the face of growing competition from rival Eli Lilly and compounded versions of its semaglutide product, said that it believed there were no antitrust issues with its bid but, after "careful consideration," had elected not to increase its offer "consistent with [a] commitment to financial discipline and shareholder value."

The bidding war has left some market observers speculating that Pfizer may be paying over the odds for Metsera, given that its candidates – a GLP-1 agonist and amylin analogue – still need to make it through late-stage clinical testing and there are dozens of potentially competing products coming through the industry pipeline even as current therapies come under pricing pressure in the US.

Pfizer's winning offer is more well above the $7.3 billion total value of its initial bid in September, and has swelled the upfront portion of the deal from $47.50 per share.

Photo by John Cameron on Unsplash