Novo Nordisk has raised its offer to buy out obesity biotech Metsera to $10bn as a bidding war with Pfizer intensifies.
This is up from the $8.5bn that Novo offered last week when it submitted its initial, unexpected, “unsolicited” offer. This offer shook the pharma sector after it seemed that Pfizer’s $7.3bn offer to take over Metsera was all but certain.
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Under the most recent proposal, Novo Nordisk would acquire all outstanding shares of Metsera’s common stock at a price of $62.20 per share in cash, equal to an approximate aggregated equity value of $7.2bn.
The offer includes contingent value rights (CVRs) for up to $24.00 per share, an approximate aggregated value of up to $2.8bn based on the achievement of certain clinical and regulatory milestones. The new $10bn offer has been described as “superior” by Metsera’s board of directors.
Pfizer refutes these claims, stating that Novo Nordisk’s offer “cannot qualify as superior” as the transaction is unlikely to be completed due to the “regulatory risk” associated with it.
Meanwhile, Novo Nordisk believes that the most recent proposal, including the structure of the transaction, complies with all applicable laws and highlights the company’s “commitment to investing in the US and interest in continuing to grow the scale of its US investments”.
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By GlobalDataThis updated offer comes after Pfizer also upped its offer to $8.1bn to try and entice Metsera back.
In a Halloween scare, Pfizer launched a lawsuit against both Metsera and Novo Nordisk on 31 October. The lawsuit, filed in the Delaware Court of Chancery, alleges that Novo Nordisk and Metsera breached the contractual merger agreement, claiming “breach of contract, breach of fiduciary duty, and tortious interference”.
In the same lawsuit, Pfizer had also requested the Delaware Court of Chancery to issue a temporary restraining order to block Metsera from terminating the Pfizer merger agreement and seeks all appropriate remedies to ensure the terms of the merger agreement are fully enforced. This has been rejected by the court, with another hearing scheduled for 5 November.
Pfizer has since launched a second lawsuit against the companies, as well as Metsera’s controlling shareholders, alleging Novo Nordisk’s offer violates Section 7 of the Clayton Act because of the anticompetitive effects it would have in the US GLP-1RA sector.
Pfizer also claims that it constitutes an anticompetitive conspiracy between Novo Nordisk and Metsera in restraint of trade in violation of Section 1 of the Sherman Act, and that it constitutes attempted monopolisation and conspiracy to monopolise under Section 2 of the Sherman Act.
Finally, it claims that Metsera’s controlling stockholders have conspired with Metsera and Novo Nordisk in furtherance of these anticompetitive activities.
Whoever emerges victorious from the bidding war will claim Metsera’s range of obesity assets, including its monthly glucagon-like peptide-1 receptor agonist (GLP-1RA), MET-097i, which recently posted weight loss of 14.1% in a Phase IIb trial. The company also has an oral candidate MET-224o, which is in Phase I trials.
It is unsurprising that both Pfizer and Novo Nordisk are grappling to purchase the biotech as GlobalData analysis predicts the obesity market to accelerate in growth, from $12.3bn in 2021, growing to $206.5bn in 2031 across the seven major markets (7MM: US, France, Germany, Italy, Spain, UK, and Japan).
After Novo’s initial unsolicited bid, GlobalData senior analyst Shehroz Mahmood said: “This competitive bidding war underscores the high strategic value both companies place on Metsera’s ultra-long-acting GLP-1RA platform, particularly MET-097i’s differentiated 380-hour half-life enabling monthly dosing convenience that could challenge the weekly administration paradigm currently dominated by Novo’s Wegovy (semaglutide) and Eli Lilly’s Zepbound (tirzepatide).
“The timing suggests Novo Nordisk recognises the threat of losing market share to a rejuvenated Pfizer obesity franchise and is willing to pay a significant premium to maintain its leadership position in the rapidly expanding GLP-1RA obesity market.”
GlobalData is the parent company of Clinical Trials Arena.
