Pfizer Wins Obesity War Against NVO, to Buy Metsera for Around $10B

The heated bidding war between Pfizer PFE and Danish rival, Novo Nordisk NVO, related to the proposed acquisition of obesity drug developer Metsera MTSR is finally over. Metsera, a New York-based biotech, issued a press release stating that Pfizer has offered to acquire it for $86.25 per share (including cash and contingent value rights [CVR]) or more than $10 billion, much higher than the original price of $70 per share, offered in September. The new offer price comprises $65.60 per share in cash and a contingent CVR of up to $20.65 per share in cash. The final offer price represents a premium of around 160% to Metsera’s closing price before Pfizer’s first offer was made in September.The board of directors of Metsera has unanimously recommended that shareholders approve the amended merger deal with Pfizer, as it will deliver immediate and substantial value. NVO has left the race to acquire Metsera.With the U.S. Federal Trade Commission (FTC) granting early termination of the waiting period under the Hart-Scott-Rodino Antitrust Act in October, Pfizer’s acquisition of Metsera is expected to close shortly after the Metsera shareholders’ meeting on Nov. 13.PFE-NVO Battle for MetseraIn September, Pfizer announced a definitive agreement to acquire Metsera for around $70 per share or a total value of around $7.3 billion (including cash and contingent value rights) to re-enter the lucrative obesity space after it scrapped the development of danuglipron, a weight-loss pill, earlier this year.Incidentally, Novo Nordisk submitted an unsolicited proposal to acquire Metsera for around $77.75 per share of $9 billion (including cash and CVR), to strengthen its position in the diabetes and obesity space as its GLP-1 products are losing market share to rival Eli Lilly (LLY). As the obesity battle intensified, NVO increased its offer price for Metsera to up to $86.25 per share, or a total value of around $10 billion, which Metsera said was a superior proposal to a revised Pfizer proposal of approximately $8.1 billion. Pfizer matched NVO’s offer and is eventually acquiring Metsera at the same price of $86.25 per share. Novo Nordisk, in a separate statement, said it will not make any increased offer to acquire Metsera.Last week, Pfizer filed a lawsuit against Metsera, Novo Nordisk A/S and several related parties for the breach of the merger agreement. Pfizer claimed Metsera violated its contractual obligations by pursuing Novo Nordisk’s competing offer. It argued that NVO’s offer cannot qualify as a superior proposal under the merger terms because it violates antitrust law and poses significant regulatory risks. In the lawsuit, Pfizer also sought a temporary restraining order to prevent Metsera from terminating the merger agreement. However, the court denied Pfizer’s request for a temporary restraining order.Pfizer also filed a second lawsuit against Metsera and its directors and Novo Nordisk in a district court in Delaware, calling out NVO’s proposal to buy Metsera an anticompetitive action to maintain its dominance in the GLP-1 drug market by eliminating a potential American rival. Metsera, in response, said it will address Pfizer’s allegations in court and that the latter is trying to acquire it for a lower price than NVO through such legal actions.In the latest press release, Metsera mentioned that the FTC warned it of the potential legal and regulatory risks of accepting NVO’s offer, as it can violate antitrust law. A key risk was that the initial dividend may never be paid or may be subsequently challenged or rescinded.How Will the Metsera Buyout Benefit Pfizer?Metsera, which went public earlier this year, is developing innovative therapies to treat obesity and cardiometabolic diseases, which are expected to generate billions of dollars in peak sales. The acquisition will add Metsera’s four novel clinical-stage incretin and amylin programs to Pfizer’s pipeline. Metsera’s lead pipeline candidate is MET-097i, a weekly and monthly injectable GLP-1 receptor agonist (RA). Both doses are in phase II studies. It is also developing an ultra-long-acting amylin analog, MET-233i, in phase I. Two oral GLP-1 RA candidates are expected to enter clinical development soon.Pfizer failed to develop its own obesity candidate earlier this year. In April, Pfizer discontinued the development of its GLP-1R agonist, danuglipron, which was being developed as a weight loss pill. Pfizer took the decision after one of the participants in the dose-optimization studies developed a potentially drug-induced liver injury, which resolved after danuglipron was discontinued. The deal with Metsera brings back Pfizer on the obesity map.On its third-quarter conference call, Pfizer expressed confidence that the Pfizer-Metsera combination will create substantial value for shareholders and advance innovation. Pfizer said that the deal will have no impact on its 2025 guidance but should be dilutive to its 2026 EPS. Pfizer expects the deal to be approximately 16 cents dilutive to 2026 adjusted EPS and remain dilutive through 2030.PFE’s Price Performance, Valuation and EstimatesPfizer’s stock has declined 7.9% so far this year against an increase of 6.4% for the industry. Image Source: Zacks Investment ResearchFrom a valuation standpoint, Pfizer appears attractive relative to the industry and is trading below its 5-year mean. Going by the price/earnings ratio, the company’s shares currently trade at 7.8 forward earnings, lower than 15.57 for the industry and the stock’s 5-year mean of 10.52.Image Source: Zacks Investment ResearchThe Zacks Consensus Estimate for 2025 earnings has risen from $3.05 per share to $3.13 per share, while that for 2026 has risen from $3.12 per share to $3.14 per share over the past seven days. Image Source: Zacks Investment ResearchPfizer has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the favorite stock to gain +100% or more in the months ahead. They includeStock #1: A Disruptive Force with Notable Growth and ResilienceStock #2: Bullish Signs Signaling to Buy the DipStock #3: One of the Most Compelling Investments in the MarketStock #4: Leader In a Red-Hot Industry Poised for GrowthStock #5: Modern Omni-Channel Platform Coiled to SpringMost of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor. While not all picks can be winners, previous recommendations have soared +171%, +209% and +232%.Download Atomic Opportunity: Nuclear Energy's Comeback free today.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Pfizer Inc. (PFE): Free Stock Analysis Report Novo Nordisk A/S (NVO): Free Stock Analysis Report Metsera Inc. (MTSR): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks