Of the three highest bidders, Pfizer’s purchase proposal for Metsera was the lowest, regulatory documents reveal. The New York pharma, however, offered the smoothest transaction with the greatest likelihood of success.
Pfizer got the prize of Metsera and its obesity pipeline with its $4.9 billion takeover last month, though the pharma by no means had the highest offer.
The competition for Metsera was fierce, as is detailed in a proxy statement filed with the SEC on Monday. Indeed, the initial roster of suitors included seven companies, of which three stood out, including Pfizer. The SEC document did not name the two other bidders, only referring to them as Party 1 and Party 2.
“Pfizer’s takeout of Metsera appears to have been a competitive process with multiple bidders attempting to acquire the company,” analysts at BMO Capital Markets told investors in a Monday note. “High bids from Parties 1 and 2 suggest that both companies view Metsera’s pipeline as having significant and possibly blockbuster potential.”
Pfizer’s offer, which eventually won out, priced Metsera at $47.50 per share with $22.50 in contingent value rights (CVR) tacked on, yielding an overall per-share bid of $70. This was far below the other offers on the table, according to the proxy statement. Party 1 priced the biotech’s common stock at $50 apiece, plus a $37 CVR, resulting in an overall value of $87 per share. Meanwhile, the second bidder priced Metsera at $95 per share: $47.50 in Party 2 stock plus a $47.50 CVR, convertible to Party 2 stock.
Over the course of the negotiations, however, Party 2 withdrew from the race on Sept. 3, citing “an unanticipated recent internal development,” which rendered the bidder unable to issue its stock.
Between Party 1 and Pfizer, the financial terms were leaning in the former’s favor—enough that Metsera reached out and “encouraged” Pfizer to “improve its proposal in light of the competitive dynamics” of the other offers the biotech was fielding. Metsera had previously told Pfizer that it wanted the pharma to up its CVR rate to $35.00—which would have bumped the deal value up to $82.50 per share—but Pfizer declined to budge.
Despite maintaining its lower bid, Pfizer had the advantage of time and presented the option that was most likely to result in a smoother, quicker transaction.
In its proxy filing, Metsera noted that dealing with Party 1 “presented a variety of risks.” Chief among these are what the biotech called “regulatory risks” that could eventually lead to the failure of, or a significant delay in, the agreement—though it did not detail out what such risks were. In particular, Metsera was wary that the closing of the transaction could be pushed back “by up to 24 months” and that the CVR “might only be paid after an extended period of time, if at all.”
According to BMO, these unstated “regulatory risks” suggest that Party 1 could also be a major player in obesity, with the analysts particularly pointing to Novo Nordisk.
“In our view, Party 1 is likely Novo given its dominant position in the GLP-1/amylin market, the December 2024 Cagrisema REDEFINE-1 miss that sent NVO shares into free fall, and Metsera acquisition discussions occurring shortly thereafter,” they wrote. And while the apparent Novo offer posed too much risk for Metsera, the pharma’s alleged interest “makes us more confident” in the eventual Pfizer-Metsera acquisition, BMO added.
Ultimately, these regulatory risks—and their potential consequences to the company, including difficulties in retaining talent and in advancing its pipeline—pushed Metsera to accept Pfizer’s bid. To support its unanimous recommendation of the deal, the biotech’s Board wrote that Pfizer’s offer “is more favorable to Metsera stockholders than the potential value that might result from other strategic options available.”
