Pfizer to Acquire Metsera for $10 Billion

Pfizer has emerged as the victor in a $10 billion agreement to acquire Metsera, a rapidly growing obesity drug developer. This acquisition concludes a heated bidding war with Novo Nordisk, a Danish competitor.

Metsera accepted an enhanced offer from Pfizer on Friday. According to Reuters, the decision was influenced by concerns regarding U.S. antitrust risks associated with Novo's bid, which Metsera had initially deemed superior. Novo Nordisk announced its withdrawal from the competition on Saturday.

This win provides Pfizer with a foothold in the lucrative obesity drug market, even though Metsera's treatments are still years away from receiving regulatory approval. The loss represents a setback for Novo as it seeks to regain market share from U.S. rival Eli Lilly. Health tracking apps like Shotlee can help monitor progress when using such medications.

Novo Nordisk Withdraws Offer

In a statement, Novo Nordisk confirmed its decision to abandon the attempted acquisition after multiple offers. The company cited the high price and antitrust exposure as reasons for its withdrawal.

Novo increased its bid for Metsera twice. The initial bid was approximately $10 billion, followed by a revised offer of roughly the same value, featuring a higher cash component and reduced performance bonuses. However, after Metsera raised concerns about U.S. antitrust risks and favored Pfizer's counteroffer, Novo opted to withdraw and refrain from further increasing its offer. This decision was based on financial discipline and the importance of shareholder value.

"We believe the structure of our potential merger agreement is compliant with antitrust laws," Novo said in a statement. "Following a competitive process and after careful consideration, Novo Nordisk will not increase its offer to acquire Metsera, consistent with its commitment to financial discipline and shareholder value."

Novo stated that it will continue to explore business development and acquisition opportunities that meet its criteria for returns and capital allocation.

Antitrust Concerns

Metsera, in its Friday statement, indicated that Novo's proposal presented "unacceptably high legal and regulatory risks" compared to the proposed merger with Pfizer. The company cited a call from the Federal Trade Commission (FTC) to discuss potential antitrust concerns. Earlier in the week, the regulator sent a letter to Novo and Metsera, cautioning that their proposed deal could violate U.S. antitrust laws.

Pfizer expressed satisfaction with reaching a revised agreement with Metsera and anticipates closing the merger shortly after Metsera's Nov. 13 shareholder meeting, according to Reuters.

Financial Analysis

Bernstein analyst Courtney Breen suggested that the $10 billion price relies on optimistic assumptions regarding Metsera's future performance. She estimated that Pfizer would need to generate approximately $11 billion in revenue from the deal by 2040, which is nearly double Metsera's current projections.

She highlighted growing skepticism surrounding long-term GLP-1 pricing, which could potentially compress margins.

Metsera's board has recommended that shareholders approve the amended Pfizer offer. Currently, the biotech company operates at a loss, and analysts anticipate continued losses as its drugs remain in the development phase.