Pfizer called Novo’s offer “reckless and unprecedented,” in a statement issued Thursday morning.
Novo Nordisk has submitted an unsolicited bid to buy obesity biotech Metsera out from under Pfizer, offering $6 billion upfront plus $2.5 billion in milestone-based payouts for a total of $8.5 billion. The total consideration for the deal edges out Pfizer’s offer by approximately $1.23 billion.
Metsera called Novo’s offer “superior” to Pfizer’s in a response Thursday morning, with the Danish pharma valuing the biotech at $77.75 per share. This would be a 133% premium to Metsera’s closing price on September 19, the day before Pfizer’s offer.
Pfizer called Novo’s offer “reckless and unprecedented,” in a statement issued Thursday morning.
“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,” Pfizer said. “It is also structured in a way to circumvent antitrust laws and carries substantial regulatory and executional risk.”
Pfizer was informed of Novo’s offer via an official notice, according to Metsera. The New York pharma will now have four days to renegotiate, though Pfizer has already responded that it does not believe Metsera has the right to deliver the notice.
Pfizer has pledged to “pursue all legal avenues” to stop the Novo proposal from going forward.
“The proposal is illusory and cannot qualify as a superior proposal under Pfizer’s agreement with Metsera,” Pfizer said.
Metsera, however, doesn’t see eye to eye with the pharma. “Metsera disagrees with Pfizer’s view,” the biotech said in its statement.
Should the Novo deal remain superior after negotiations with Pfizer, Metsera could terminate the agreement. The Pfizer offer includes a $190 million termination fee, which Novo has offered to pay on Metsera’s behalf to Pfizer, according to an SEC filing.
For now, the Pfizer offer remains in effect, Metsera said.
The Thursday offer complicates things for Pfizer but speaks to pharma’s insatiable desire for long-acting obesity medicines, BMO Capital Markets said in a Thursday morning note. The deal “compares favorably” to Pfizer’s, boosting upfront cash and putting a little more incentive on the back end once the deal closes.
“All in, assuming CVRs reach their intended trigger points, Novo’s offer looks to give Metsera shareholders an extra $8/share vs. Pfizer’s offer, making a compelling case for the new higher deal,” BMO wrote.
Metsera’s shares rose more than 17% to $61.46 in pre-market trading on Thursday morning, compared to $52.21 at close the day prior.
The battle to buy Metsera was fierce, according to SEC documents filed after Pfizer’s September offer, which totaled $4.9 billion in upfront cash plus a contingent value right (CVR) that could add $2.37 billion. That brought the company’s offer to about $7.27 billion.
Metsera apparently spoke to as many as seven companies, with three sticking around until the end.
In addition to Pfizer, one of them was likely Novo, BMO Capital Markets had speculated when the documents were released. Pfizer’s response validates that suspicion and said Novo was rejected due to many risks, including Novo’s inability to close the deal quickly.
“The Pfizer transaction creates real, certain and immediate value for Metsera’s stockholders and ensures Metsera’s important drug candidate can emerge as a key competitor available to all Americans in this important therapeutic area,” Pfizer said.
Metsera’s earlier regulatgory documents said that Party 1, now known to be Novo, “presented a variety of risks” including regulatory risks that could damn the deal. The biotech speculated that if this party were to win the bidding process, the deal would take as much as 24 months to close.
Instead, Metsera accepted the Pfizer bid, even though it was lower. Pfizer offered $47.50 per share and a $22.50 CVR, while Party 1 valued the shares at $50 each plus a $37 CVR.
Novo’s new unsolicited offer includes $56.50 per share in cash plus $21.25 in CVRs to be paid at the close of the deal.
Metsera is reviewing the offer, according to Novo’s Thursday press release.
Novo said the deal would allow it to “maximize the potential of Metsera’s complementary portfolio and capabilities.” The biotech has a portfolio of early and development-stage incretin and non-incretin analogue peptide programs. Novo has been in need of a pipeline refresh as its internal candidates have disappointed in the clinic.
BMO said that other obesity biotechs are likely to have a good day at the stock market after Novo’s unsolicited offer.
“Novo’s competitive bid continues to show that large Pharma has an interest in buying into obesity (even if they are already established with commercial assets) in order to capitalize on the significant market opportunity,” BMO wrote. “We view this to be especially true for companies like Metsera that may have differentiated long-acting injectable agents and potentially oral agents without a food effect.”
Editor’s Note (Oct. 30): This story was updated at 10:32 a.m. ET to include Pfizer’s response.
