Novo Increases Metsera Offer to $10 Billion

In a notable escalation within the pharmaceutical sector, Novo Nordisk (NVO) has proposed a significant $10 billion offer to acquire Metsera (MTSR), a small biotech firm specializing in obesity treatments. This revised bid surpasses an earlier $8.1 billion proposal from Pfizer (PFE), which had first pursued Metsera in mid-September.

Key Developments in the Acquisition Battle

Metsera’s stock reacted positively to the new offers, rising 20.5% to close at $73.18. Conversely, shares of Pfizer fell by 1.5%, finishing at $24.30, while Novo Nordisk’s stock decreased by 1.8%, closing at $48.25.

Originally, Pfizer planned to acquire Metsera for $4.9 billion but faced competition after Novo Nordisk entered the fray with an unsolicited $6.5 billion offer. Metsera has indicated that Novo’s latest bid is more attractive than Pfizer’s, which intensifies the pressure on Pfizer to respond quickly.

Valuation and Conditions of the Offer

• New offer from Novo values Metsera stock at $62.20 per share in cash.
• A contingent value right is included, potentially worth an additional $24 per share based on milestone achievements.

Implications for Pfizer and Novo Nordisk

The outcome of this bidding war could have significant ramifications for both pharmaceutical giants. Pfizer has struggled in establishing a strong weight-loss franchise due to liver-related issues with some of its drugs, pushing them to rethink their portfolio.

In contrast, Novo Nordisk holds a leading position in the weight-loss market, competing primarily with Eli Lilly (LLY). Eli Lilly’s weight-loss drug, Zepbound, saw a remarkable 185% revenue increase, reaching $3.59 billion in the third quarter. Their diabetes drug, Mounjaro, generated $6.52 billion, reflecting more than double the sales compared to the previous year.

Current Status of Novo’s Portfolio

Novo’s weight-loss drug, Wegovy, is projected to achieve $3.33 billion in third-quarter sales, marking a 34% growth. However, its diabetes treatment, Ozempic, is expected to see a modest 10% rise in sales, totaling $4.73 billion. This performance indicates that both Zepbound and Mounjaro have outpaced Wegovy and Ozempic in sales growth for the second consecutive quarter.

Investors will be closely watching for Novo’s third-quarter earnings report, scheduled for Wednesday, for further insight into their strategic direction amid this competitive landscape.