Novo Nordisk hikes Metsera bid to up to $10B in competition with rival Pfizer

Novo Nordisk has escalated its bidding war with Pfizer for control of Metsera, a development-stage pharmaceutical company, by raising its offer to a potential $10 billion. The Danish drugmaker’s enhanced proposal, announced Tuesday, represents a significant increase from its previous bid of up to $9 billion, which had already triggered legal action from Pfizer.

Under the revised terms, Novo Nordisk would pay $62.20 in cash for each Metsera share, up from the initial $56.50 per share. The offer also includes a contingent value right payment of $24 if certain development and regulatory milestones are achieved, another improvement over the previous proposal.

The acquisition structure proposed by Novo is notably complex. It involves a two-step process where Novo would first pay $62.20 per share in cash to Metsera, which would then issue Novo non-voting preferred stock representing half of Metsera’s share capital. Subsequently, Metsera would declare a dividend of $62.20 per common share, with the record date set ten days after the deal signing and payment following thereafter.

Metsera has officially designated Novo’s revised offer as superior to its existing agreement with Pfizer, opening a window for Pfizer to renegotiate its terms.

In response, Pfizer has not remained passive. The American pharmaceutical giant has already adjusted its September offer of nearly $4.9 billion to provide more cash upfront. Pfizer’s revised proposal would pay $60 per share in immediate cash, a substantial increase from its initial $47.50, though it has simultaneously reduced the contingent value right payment from $22.50 to $10.

The intensifying competition underscores the strategic importance both companies place on Metsera’s pipeline, particularly its developmental treatments for obesity and diabetes – two therapeutic areas experiencing rapid market growth and increasing investor attention.

Pfizer Chairman and CEO Albert Bourla has strongly criticized Novo’s approach. During a Tuesday conference call discussing Pfizer’s third-quarter results, Bourla characterized Novo’s offer as “illusory” and claimed it could not constitute a superior offer due to significant regulatory risks. He further alleged that the proposal represents “an illegal attempt by a foreign company to do an end run around antitrust laws, taking advantage of the federal government shutdown.”

Bourla’s most pointed accusation suggested that Novo’s true intention was to “cut and kill an emerging competitor.” A representative from Novo Nordisk swiftly dismissed these claims as baseless, asserting that their offer, including its structure, complies with all applicable laws.

While Metsera, headquartered in New York, currently has no products on the market, its development pipeline includes promising oral and injectable treatments targeting obesity and diabetes – therapeutic areas that have become increasingly lucrative for pharmaceutical companies.

Novo Nordisk already commands a significant position in these markets through blockbuster products like Wegovy and Ozempic, which have driven substantial revenue growth for the company. The acquisition of Metsera would potentially strengthen Novo’s research capabilities and competitive advantage in these fields.

For Pfizer, the acquisition represents an important strategic pivot following its decision several months ago to terminate development of its own potential obesity treatment pill. The New York-based pharmaceutical giant appears determined to establish a meaningful presence in the rapidly expanding obesity and diabetes treatment markets, viewing Metsera’s pipeline as a valuable entry point.

As the bidding war continues, industry analysts are closely watching how regulatory authorities might view a potential Novo Nordisk acquisition, particularly given the company’s existing market dominance in the targeted therapeutic areas. The outcome could significantly reshape competitive dynamics in one of healthcare’s fastest-growing segments.