Danish drug giant Novo Nordisk (NVO) has been accused by rival Pfizer (PFE) of being “reckless” after it tried to hijack the U.S. firm’s agreed deal with obesity startup Metsera (MTSR) with an $8.5 billion offer.
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Novo’s shares dropped 2% in pre-market trading. Pfizer stock was flat with Metsera up 20%.
Novo said it had submitted an unsolicited proposal to buy biotech Metsera, which is aiming to “reduce the physical, emotional, and economic burdens of obesity”, for $56.50 per share in cash upfront or $6 billion. The purchase price may increase by as much as $21.25 per share, or $2.5 billion, if certain targets are met.
Weight Loss Strategy
Novo said that the acquisition would be in line with its long-term strategy of developing medicines such as Wegovy to tackle obesity. It also marks the latest move by new Chief Executive Officer Maziar Mike Doustdar who is fighting to regain the company’s lead in weight-loss drugs. Since taking over, he has announced thousands of job cuts and struck a $5 billion deal for liver disease drugmaker Akero Therapeutics. Novo added that the proposal is currently subject to review by the Metsera board of directors.
Pfizer said in September it had agreed to acquire Metsera for $47.50 per share, or an enterprise value of $4.9 billion, with the potential for another $22.50 per share in payments if certain targets are hit. That would take the total to around $7.3 billion.
Both firms are trying to lift their share prices, which have been in the doldrums this year. Chasing the global obesity drug market, which is projected to reach $150 billion by the early 2030s, should help.
In a statement today, Pfizer blasted Novo’s move describing it as “reckless and unprecedented.” It stated: “It is an attempt by a company with a dominant market position to suppress competition in violation of law by taking over an emerging American challenger. It is also structured in a way to circumvent antitrust laws and carries substantial regulatory and executional risk. The proposal is illusory and cannot qualify as a superior proposal under Pfizer’s agreement with Metsera.”
All Legal Avenues
It warned that it would “pursue all legal avenues” to enforce its rights. “The Pfizer transaction creates real, certain and immediate value for Metsera’s stockholders and ensures Metsera’s important drug candidate can emerge as a key competitor available to all Americans in this important therapeutic area,” it said.
“Novo Nordisk is flexing its muscles,” said Per Hansen, an investment economist at Nordnet AB. “They’re going all in on expanding their pipeline. The consequence is that they’re committing a significant portion of their financial leeway.”
Metsera is scheduled to hold a shareholder meeting on 13th November that will include a vote on the Pfizer acquisition.
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