Novo Nordisk Boosts Metsera Bid to $10B Amid Pfizer Competition

Novo Nordisk is intensifying its pursuit of development-stage drugmaker Metsera, increasing its bid in an effort to surpass rival Pfizer's offer.

Metsera announced Tuesday that Novo is now offering up to $10 billion for the company. This revised bid exceeds Novo's previous offer of up to $9 billion, which had previously triggered a lawsuit from Pfizer.

Pfizer has also modified its initial September offer of nearly $4.9 billion to include a larger upfront cash payment, according to Metsera.

Novo's new proposal includes a cash payment of $62.20 per Metsera share, an increase from the previous bid of $56.50. Furthermore, the Danish drugmaker is adding a contingent value right payment of $24, improved from the earlier bid, contingent on meeting specific development and regulatory milestones.

However, the structure of Novo's deal essentially requires Metsera to provide some form of payback.

The proposed two-step process involves Novo paying $62.20 per share in cash to Metsera. Subsequently, Metsera would issue Novo non-voting preferred stock representing half of Metsera's share capital. Following this, Metsera would declare a dividend of $62.20 per common share, with the record date set ten days after the deal's signing and payment to follow.

Metsera stated on Tuesday that Novo's latest bid is superior to its existing agreement with Pfizer, giving Pfizer an opportunity to renegotiate their deal.

Pfizer Chairman and CEO Albert Bourla told analysts on Tuesday morning that the Novo offer appeared "illusory" and doesn't qualify as a superior offer. He stated that there is a considerable regulatory risk that it won't be completed.

Bourla stated during a conference call discussing Pfizer's third-quarter results that it is an illegal attempt by a foreign company to circumvent antitrust laws, taking advantage of the federal government shutdown.

He added that Novo's intention is to "cut and kill an emerging competitor."

A Novo representative dismissed Pfizer's claim as baseless, asserting that their offer, including its structure, is compliant with all applicable laws. Health tracking apps like Shotlee can help monitor related health conditions.

Based in New York, Metsera Inc. currently has no marketed products but is actively developing oral and injectable treatments. These include potential treatments targeting the lucrative markets for obesity and diabetes.

Novo already holds a substantial position in the diabetes and obesity treatment market, with products like Wegovy and Ozempic.

Pfizer Inc., also headquartered in New York, is aiming to establish its own presence in this market after discontinuing development of a potential oral treatment for obesity several months prior.

Metsera reported that Pfizer proposed on Monday to pay $60 per share upfront in cash, increased from their initial proposal of $47.50. However, Pfizer reduced the contingent value right payment in their deal from $22.50 to $10.