Metsera's complex choice between Novo and Pfizer
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Metsera is belle of the metabolic ball, the subject of an intense bidding war between drug giants Novo and Pfizer.
The big picture: Normally, such a takeover target would sit back and wait for the highest number. But this situation is anything but normal.
Catch up quick: Pfizer in September agreed to buy Metsera for up to $7.3 billion.
- Novo last week offered up to $9 billion, via a two-part pitch that included $6.5 billion at the time of signing (even if unable to obtain approvals). Metsera called Novo's offer "superior," without agreeing to it, which prompted an unsuccessful antitrust lawsuit from Pfizer.
- Both companies have since sweetened their offers. Novo is now at around $10 billion, including $7.2 billion upfront, with Pfizer at $8.1 billion but reportedly planning to match Novo.
What's next: Metsera may need to make a decision based on something beyond headline price. So let's play that out:
The case for Novo: It's a no-brainer, right? Metsera shareholders get billions of dollars even if they vote down the deal, or if antitrust regulators object, and then could go in search of another one.
- Yes, Metsera would need to repay Novo's money first. But its lead anti-obesity drug is only in Phase 2 clinical trials, which means the company's value could rise as more data is released.
- Take the money and run into the upside.
The case for Pfizer: Did you catch that part about Phase 2 clinical trials? What if the data comes in weaker than expected, after Novo gets blocked on antitrust grounds? Or clinical failure in Phase 3? It's the downside of upside.
- Both bids include contingent value rights, but Pfizer is the surer bet. It's already got FTC approval and doesn't leave Metsera shareholders dangling.
- Plus, there's a chance that the entire anti-obesity market is about to face a price war — based on President Trump's moves yesterday with select Eli Lilly and Novo medicines.
Zoom in: These is a first-world conundrum for Metsera, which two months ago was valued at just over $3 billion.
- And, again, it doesn't have a single product on the market. No revenue. Ever.
The bottom line: Dealmakers are waiting on Metsera to make a decision. After that, don't be surprised to see a gold rush on anti-obesity drugmakers, many of which are even earlier in their clinical processes.
