Pfizer and Novo Nordisk intensify Metsera bidding war

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Pfizer and Nordisk are in conflict over the acquisition of obesity biotech Metsera, with both pharmaceutical giants raising their bids for the startup as of Monday.

For now, Metsera says Novo Nordisk's up to $10 billion offer for the company is “superior” to Pfizer's new proposal. Here's what you need to know about the heated bidding war that broke out last week.

Here is the timeline.

In September, Pfizer said it would acquire Metsera for $4.9 billion, or up to $7.3 billion with future payments, a deal that could be the company's golden ticket into this space after struggling to bring its own anti-obesity products to market.

But Novo Nordisk on Thursday launched a takeover bid valuing the biotech at around $6 billion, or up to $9 billion, prompting a four-business-day deadline for Pfizer to renegotiate its offer. The Danish drugmaker's unsolicited offer is rarely seen in the industry, and Pfizer certainly wasn't happy about it.

Pfizer filed its first lawsuit against Novo Nordisk and Metsera on Friday, seeking to prevent the biotech from terminating its existing merger agreement with Pfizer. On Monday, Pfizer filed a second lawsuit against the companies, alleging that Novo Nordisk's attempt to outbid Pfizer to acquire Metsera is anticompetitive.

In a statement Monday, Metsera called Pfizer's litigation arguments “nonsense” and said it would address them in court.

Metsera said Tuesday that Novo Nordisk's new offer of up to $10 billion is “superior” to a revised offer from Pfizer, which values ​​the startup at about $8.1 billion.

Under the terms of the original agreement for Pfizer to acquire Metsera, the largest drugmaker has two business days to negotiate adjustments to its proposal. If Metsera's board believes that Novo Nordisk's proposal is still better than Pfizer's after that window, Metsera would have the right to terminate the existing merger agreement, according to the statement.

Metsera, founded in 2022, offers a portfolio of oral and injectable treatments with different objectives that the company has acquired through its own licensing and acquisition agreements. That includes a GLP-1 drug and an amylin treatment that Metsera is developing to be taken once a month.

meaning patients can take it less frequently than existing weekly injections.

Metsera could be key to Pfizer's ambitions to enter the highly lucrative obesity market. Pfizer famously faced a series of setbacks with its own weight-loss candidates, scrapping two separate pills in the past two years due to safety concerns.

Meanwhile, Novo Nordisk helped establish the weight-loss drug space, bringing highly effective GLP-1 drugs to market, including diabetes injection Ozempic and obesity injection Wegovy. But the company is struggling to regain its leading market position after losing market share to its main rival, Eli Lilly, over the past year and struggling to impress investors with its current portfolio of obesity products.

The emergence of new potential competitors in the market from names such as Amgen, Roche and Zealand Pharma is only putting more pressure on Novo Nordisk to regain share.

But in a note Thursday, TD Cowen analyst Michael Nedelcovych said it's not clear that Metsera's GLP-1, or amylin, drugs are “differentiated” from Novo Nordisk's own drugs, raising questions about how much the company could gain from the deal.

“The value may be boosted by the prospects of monthly dosing, but the viability of this approach is not yet proven,” he said. “If we add to that the regulatory risk and a possible bidding war, this news makes us think.”

In an email to clients on Monday, Jared Holz, healthcare equity strategist at Mizuho, ​​said Novo Nordisk appears to be chasing Metsera “both for itself and to maintain [the biotech company’s drugs] out of reach” of Pfizer or other drug manufacturers.

Pfizer's federal antitrust lawsuit alleges that Novo Nordisk's proposed acquisition of Metsera would help it maintain its dominant position in the successful obesity market by eliminating a smaller potential competitor, according to the lawsuit filed Monday in U.S. District Court in Delaware. The lawsuit also alleges that Metsera's majority shareholders conspired with the obesity biotech and Novo Nordisk.

Pfizer's first lawsuit seeks to prevent Metsera from terminating its existing merger agreement with Pfizer. That lawsuit, filed in the Delaware Court of Chancery, alleges that Novo Nordisk's offer cannot be considered a superior proposal because it is not reasonably likely to be completed due to its significant regulatory risk.

Novo Nordisk, in response to the latest lawsuit filed Monday, said that “Pfizer's unfounded claims that Novo Nordisk seeks to suppress innovation through our offering are false and baseless.”

We will have to see if Pfizer negotiates adjustments to its proposal with Metsera after the two business day period.

Meanwhile, a Delaware judge said at an emergency hearing on Tuesday that there is currently no need for a court to grant Pfizer's request to get involved in its bidding war with Novo Nordisk, Reuters reported. But the judge scheduled a hearing for Wednesday afternoon to review the process.

In response, Pfizer Chief Financial Officer Dave Denton said in an interview Tuesday that the company is “going to exercise all of our rights legally.”

“There are multiple avenues for us to do it, so we're not going to give up the fight for sure,” Denton said, without elaborating on the other paths Pfizer could take. “We feel we are right in this and will continue to pursue all avenues to assert our claims.”

We'll continue to follow the acquisition saga, so stay tuned for our coverage!

Feel free to send any tips, suggestions, story ideas and facts to Annika at a new email: [email protected].

Democrats in Congress have made extending the Affordable Care Act's enhanced tax credits a central demand for reopening the government.

Three days after ACA open enrollment and 35 days after closing, there is no deal on the horizon. But more Republican representatives have expressed support for extending the tax credits as some of their constituents face surprising premium increases by 2026.

While low-income ACA enrollees will continue to receive tax credits provided for in the original legislation, tax credits for middle-class enrollees enacted during the Covid pandemic in 2021 will expire at the end of this year.

Insurers have raised premiums by an average of 26% for next year, according to health policy research organization KFF. But for enrollees who lose those enhanced tax credits, effective price increases will be more than 300%, and some of the hardest-hit districts are in Texas, Georgia and Florida, all of which have majority Republican representation in the House.

Last week, Centene CEO Sarah London expressed hope that Congress will reach a deal before the end of the year, but she expects some enrollees won't sign up anyway. He said that even if the tax credits “are extended mid-cycle and advanced, for example, with an additional 60-day special enrollment period, our view of the market contraction by 2026 is in the 10- to 30-year range.”

Chris Meekins, a policy analyst at Raymond James, told me that if there is a deal, Republicans will likely demand an income limit that would exclude higher-income people.

“Several moderate Democrats have expressed openness to the idea” of capping revenues, Leerink analyst Whit Mayo wrote in the note to clients, but he added that it is getting late to find a revised solution.

“The modified limits could significantly reduce the price of a likely one- to two-year fix. We're not sure if there really is time to implement many of those changes.”

ACA open enrollment on the federal health exchange ends December 15.

Please feel free to send any tips, suggestions, story ideas or information to Bertha at [email protected].