Novo Nordisk is still ahead in the high-stakes competition for obesity drug developer Metsera, the biotechnology company’s board declared Tuesday after receiving updated, higher offers from Novo and acquisition rival Pfizer.
Metsera, a developer of a promising set of incretin-based drugs for obesity, became an acquisition target six weeks ago when Pfizer made a $4.9 billion offer that its board of directors accepted. Looking to reverse a recent downslide, Novo stepped in last week and outbid Pfizer with a $6.5 billion proposal, triggering a four-day negotiation period that generated two new offers disclosed Tuesday.
Novo’s new bid is worth about $10 billion, and proposes to initially pay stockholders $62.20 per share in cash, up from $56.50 apiece, upon the signing of the deal. In return, Novo would get half of the company’s stock and pay dividends of $62.20 a share to each equity holder. Should the deal eventually close, Novo would acquire the rest of Metsera’s stock for $24 a share, up from its previous offer of $21.25.
Like last week, Metsera’s board said Novo’s latest bid qualifies as a “superior company proposal” under the terms of its agreement with Pfizer. That’s despite the fact that Pfizer also made a counter proposal that boosted its cash-per-share offer to $60, from $47.50, with an add-on payment of $10, down from $22.50. That offer values Metsera at $8.1 billion, the company said.
In advocating for its own offer, Pfizer has pointed out that Novo’s proposal carries significant legal and regulatory risk. Novo is one of just two companies selling a GLP-1 based drug for obesity. And in a recent securities filing, Metsera disclosed that its attorneys, in reviewing an similarly structured offer the company later rejected, suggested that it could take 24 months for that type of deal to clear a regulatory review.
“It is an illegal attempt by a foreign company to do an end run around antitrust laws, taking advantage of the government shutdown,” Pfizer CEO Albert Bourla said on a Tuesday earnings call with Wall Street analysts. “What they want is to do is catch and kill an emerging competitor, which is a significant antitrust concern given Novo's dominant market position.”
Pfizer has filed two lawsuits, one in the Delaware Court of Chancery charging Metsera and Novo of breach of contract, and one in a Delaware District Court claiming Novo engaged in anticompetitive action by “capturing and killing a nascent American competitor before it gains the support of Pfizer.”
In a statement, Novo said its offer “complies with all applicable laws and is in the best interest of patients,” and in addition “highlights Novo Nordisk’s commitment to investing in the U.S. and interest in continuing to grow the scale of its US investments.”
Metsera has called Pfizer’s legal arguments “nonsense.”
Editor’s note: This story has been updated to clarify the CVR payment in Novo’s original offer.
