Pfizer said to have matched Novo's $10bn bid for Metsera

The battle for obesity drug developer Metsera rumbles on, with Pfizer reported to have now matched Novo Nordisk's $10 billion offer as the US financial regulator said questions need to be answered about the legality of Novo's bid.

Pfizer proffered the same $86.20 per share deal as Novo Nordisk last night, according to the Financial Times, just before the deadline for any counteroffer was due to expire.

Its decision to table a higher bid was buoyed by a Federal Trade Commission (FTC) letter – first reported by Bloomberg - that suggested that the two-phase deal structure agreed between Metsera and Novo Nordisk could illegally sidestep requirements for pre-merger review.

Specifically, it is looking at the provision for Novo Nordisk to make a large upfront payment for half of Metsera's shares, regardless of the deal closing, with the remainder paid out later on. It is also concerned about restrictions on Metsera's operational spending before the merger closes, which could impact its ability to compete in the marketplace.

The Pfizer/Metsera merger has already been cleared by the regulator. However, Pfizer's raised bid also came after the Delaware Chancery Court denied Pfizer's request for a temporary restraining order to prevent Metsera exiting their merger agreement and cutting a deal with Novo Nordisk.

Both deals include an upfront payment and contingent value rights (CVR) tied to certain clinical and regulatory achievements, but Pfizer's bid is thought to be more heavily weighted to the front end.

Pfizer – which first agreed a $4.9 billion takeover deal with Metsera in September – has argued that the rival bid is anticompetitive as it will help Novo Nordisk "protect its dominant market position in GLP-1s by capturing and killing a nascent American competitor."

It has filed a pair of lawsuits against Novo Nordisk, Metsera, and Metsera's main shareholders to try to block their deal, and on Pfizer's third-quarter results call, chief executive Albert Bourla called it "an illegal attempt by a foreign company to do an end run around antitrust laws, taking advantage of the government's shutdown."

After news of the Delaware decision emerged, Metsera said Pfizer's litigation arguments are "nonsense" and it will "continue to stand firm on behalf of shareholders and patients."

While the FTC has stressed that it has no position on the legality of Novo Nordisk's offer at the moment, if the questions do lead to a lengthy review, it could stand in Pfizer's favour, as Metsera's investors may prefer to cash in sooner.

According to the FT, which cited people familiar with the matter, Novo Nordisk can take its time deciding whether to raise its bid further and, if it does, Pfizer must match it within two days or walk away.