Denmark’s Novo Nordisk launched a rival bid for U.S. obesity biotech firm Metsera on Thursday, hijacking an offer from Pfizer as drugmakers jostle for advantage in the fast-growing and competitive weight-loss drug market.
Novo Nordisk, the company behind blockbuster weight loss drug Wegovy and diabetes drug Ozempic, bid up to $8.5 billion, including $6 billion upfront and later milestone payments. Pfizer’s bid was worth $7.3 billion, including milestones.
Metsera, in a statement, said that Novo’s bid was “superior” and that it had notified Pfizer, which now has four business days to negotiate. It said that the Novo offer valued Metsera at up to $77.75 per share for a total of some $9 billion.
Pfizer said in a statement that the Novo bid was “reckless” and would be bad for competition in the obesity drug market.
Novo looking to build next-gen obesity, diabetes pipeline
The move signals an aggressive turn by Novo Nordisk a week after the ouster of most of the company’s board over concerns it was not moving fast enough in the obesity market, where it competes with main rival Eli Lilly.
It was also in line with new Novo CEO Mike Doustdar’s pledge to build a robust pipeline of next-generation diabetes and obesity treatments, as it prepares for the patent expiry of semaglutide, the active ingredient in Wegovy and Ozempic.
Metsera is one of the several companies developing experimental weight-loss drugs, including one that could be taken less often than Novo and Eli Lilly’s products.
“The deal would certainly help Novo improve their market position in obesity, assuming that the products can be developed successfully,” Markus Manns, a portfolio manager at mutual fund and Novo shareholder Union Investment, told Reuters.
“There are some significant antitrust concerns and whether Pfizer comes back with another offer.”
Pfizer said that the bid carried “substantial regulatory and executional risk”.
“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.
Novo said that the Metsera deal would provide it with the opportunity to maximize the potential of the U.S. firm’s “complementary portfolio and capabilities”.
Big pharma vies for $150 billion obesity market
The global obesity drug market is projected to reach $150 billion by the early 2030s, fueled by the rapid adoption of GLP-1 therapies from companies including Novo and Lilly.
Both Pfizer and Novo have included contingent value rights in their bids for Metsera, offering additional payments contingent upon achieving clinical and regulatory milestones.
“Novo’s competitive bid continues to show that large Pharma has an interest in buying into obesity,” said BMO analyst Evan Seigerman.
Leerink Partners analyst David Risinger has projected more than $5 billion in combined peak sales for Metsera’s pipeline.
Shares in Metsera are up nearly 100% since January this year, rising from $26.50 per share on January 31 to $52.21 on Wednesday. Its shares jumped over 19% in premarket on Thursday.
Metsera, which went public this year and had a $5.5 billion market cap at Wednesday’s close, has a portfolio of experimental obesity drugs, including MET-097i, a GLP-1 injectable, and MET-233i, which mimics the pancreatic hormone amylin.
source: cnbc.com
