The court’s decision allows Metsera to walk away from its previous acquisition agreement with Pfizer in favor of Novo Nordisk’s higher bid.
The Delaware Court of Chancery has refused to grant Pfizer a temporary restraining order that would have stopped Metsera from terminating its acquisition agreement with the pharma in favor of a higher bid from rival Novo Nordisk.
In a statement on Wednesday, Pfizer decried the ruling, insisting that the decision “does not address the merits of the underlying legal issues raised.” Pfizer maintains that Metsera’s directors are breaching not just their contractual obligations to Pfizer, but also their duty to “act in the best interest of” their shareholders.
The New York pharma said it will continue to “vigorously” pursue its legal and antitrust claims against Metsera and Novo.
Metsera in September agreed to be acquired by Pfizer for $47.50 per share. The deal also included a contingent value right that would give Metsera shareholders $22.50 per share upon hitting certain commercial and clinical milestones. All told, Pfizer put $4.9 billion on the line for the takeover.
Last week, however, Novo came forward with an unsolicited offer to snatch Metsera away from Pfizer for $8.5 billion. Metsera called Novo’s proposal “superior” and gave Pfizer four days to file a counteroffer. Pfizer bristled, claiming that Metsera had no right to start the four-day countdown.
Pfizer hit back with a lawsuit against both companies, seeking a temporary restraining order to block Novo’s interference and force Metsera to abide by its original agreement. Novo’s offer is “illusory and cannot qualify as a superior proposal,” Pfizer insisted in a statement on Oct. 30, adding that Metsera and its directors “have breached their fiduciary duties.”
Metsera issued a short statement after the ruling, saying that the company “is gratified by the Delaware Court of Chancery’s decision to deny Pfizer’s request for a temporary restraining order to block Metsera’s Board of Directors from acting in the best interests of shareholders.”
Aside from the legal questions surrounding Novo’s surprise bid, Pfizer on Wednesday also raised anti-competitive concerns if the deal pushes through. The pharma called Novo’s offer “a flagrant attempt to make an end run around the antitrust laws and potentially gain the ability to quash an emerging competitor.”
The Federal Trade Commission, to an extent, agreed with this sentiment. In a Wednesday letter to lawyers for both Novo and Metsera, the antitrust watchdog said that the Danish pharma’s offer of a hefty upfront payment in exchange for half of the biotech’s shares could constitute a violation of the Har-Scott-Rodino (HSR) Premerger Notification Act. Under this statute, companies should first secure FTC approval for their business combination, after which a predetermined waiting period must pass before the deal can be consummated.
Meanwhile, the bidding war over Metsera continues. Since its initial proposal, Novo has increased its offer to $10 billion—a price that Pfizer has reportedly matched, according to reporting from The Financial Times. Pfizer is also looking to improve its offer in other ways, according to reporting from Reuters on Wednesday, citing a source familiar with the matter. It is unclear how exactly Pfizer plans on strengthening its bid.
