Shares of Novo Nordisk (NVO) are down after the Danish drug maker made a new offer to buy the obesity-focused biotech company Metsera (MTSR), which Metsera now says is better than Pfizer’s (PFE) updated bid. In fact, Novo’s proposal values Metsera at up to $86.20 per share, or about $10 billion in total. That’s a 159% increase from Metsera’s stock price on September 19, right before Pharmaceutical firm Pfizer first made its offer. In comparison, Pfizer’s new bid values Metsera at $70 per share, which totals around $8.1 billion.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
According to their original deal, Pfizer now has two business days to make changes to its offer, or Metsera can cancel the agreement and accept Novo’s. However, Pfizer CEO Albert Bourla said that Novo’s offer breaks antitrust laws and likely won’t happen. Therefore, it doesn’t count as a better deal under the current agreement. Unsurprisingly, Novo disagrees and stated that the bid fully follows the law. More specifically, it believes that buying Metsera will help patients and shareholders by expanding its drug portfolio.
As a result, Pfizer has filed a second lawsuit against Novo and Metsera, accusing Novo of using unfair tactics to block Pfizer from buying the company. This battle shows just how important weight loss and diabetes drugs have become. Metsera, which is developing both oral and injectable treatments, is seen by Pfizer as a way to finally enter this fast-growing market after years of setbacks. Meanwhile, Novo Nordisk, a pioneer in the space, sees Metsera as a way to defend its position after losing ground to Eli Lilly (LLY) and cheaper competitors.
Which Drugmaker Is the Better Buy?
Turning to Wall Street, out of the three stocks mentioned above, analysts think that NVO stock has the most room to run. In fact, NVO’s average price target of $60.50 per share implies 25% upside potential. On the other hand, analysts expect the least from MTSR stock, as its average price target of $55.33 equates to a loss of 24.1% should an acquisition not occur.
