San Francisco Frontiers - Novo Nordisk launches bidding war with Pfizer for obesity drugmaker Metsera

Novo Nordisk's bid valued the US biotech firm at $6 billion.

"Under the terms of the proposal, Novo Nordisk would acquire all outstanding shares of Metsera's common stock at a price of $56.50 per share in cash," Novo Nordisk said in a statement.

It added that the bid was "currently subject to review by the Metsera board of directors."

In September, Pfizer said it would pay $47.50 per share to acquire Metsera, valuing the company at $4.9 billion.

Following the announcement, Metsera said the offer from Novo Nordisk was "superior", as defined in its merger agreement with Pfizer, and gave Pfizer four business days to submit a new, higher offer.

Pfizer called Novo Nordisk's offer a "reckless and unprecedented proposal".

"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 said.

Pfizer also said the offer was "illusory and cannot qualify as a superior proposal under Pfizer's agreement with Metsera".

It said it was "prepared to pursue all legal avenues to enforce its rights under its agreement."

Novo Nordisk said the acquisition of Metsera would give the Danish company "the opportunity to maximise the potential of Metsera's complementary portfolio and capabilities".

- Increased competition -

In addition to the upfront price, Novo Nordisk also committed to paying up to an additional $21.25 per share depending on the achievement of certain milestones for Metsera's treatments under development. Pfizer was offering an add-on of $22.5 per share.

The American and Danish giants are particularly vying for MET-097i, Metsera's most advanced treatment, currently in phase 2 clinical trials.

MET-097i is a GLP-1 (glucagon-like peptide-1) receptor agonist which could potentially be administered via a single monthly injection.

Similar to Novo Nordisk's weight-loss treatments, it relies on a hormone secreted by the intestines that stimulates insulin secretion and suppresses appetite by inducing a feeling of satiety.

Shares in Novo Nordisk were down over two percent on the Copenhagen stock exchange following the announcement.

The popularity of Novo Nordisk's weight-loss injections had once made it a darling of investors, boosting its share price and at one point making it Europe's most valuable company.

But its share price has been tanking since last year as competition grows from rival treatments in its key market, the United States, notably with US giant Eli Lilly's Zepbound.

Novo Nordisk recently changed its CEO and announced it will lay off 9,000 employees.

Following a disagreement between the board and the majority shareholder over the company's future governance, it also announced earlier in October that it would replace more than half of its board, including the chair.

An extraordinary shareholders meeting has been scheduled for November 14.

Similarly, Pfizer had a hugely profitable breakthrough as it was one of the first companies to develop a Covid vaccine, but its stock price has fallen since the pandemic ended.

In its statement, Pfizer noted that "the Board of Metsera previously rejected Novo Nordisk's proposal due to 'a variety of risks' in its deal structure".

M.Hill--SFF