Pfizer Acquires Metsera for $13 Billion, Targeting Obesity Drug Market

Pfizer has agreed to acquire Metsera for $13 billion, following a heated bidding war with Novo Nordisk. According to The Straits Times, Pfizer will pay up to $86.25 a share, which includes an initial cash payment of $65.60 per share, along with potential additional payments tied to performance milestones.

This acquisition positions Pfizer to penetrate the booming obesity drug market, projected to reach $100 billion by 2030. The deal comes after Metsera experienced a flurry of interest, initially agreeing to a $70 per share offer from Pfizer in September.

However, Novo Nordisk made a higher unsolicited bid in October, prompting Pfizer to increase its offer amid intense competition. Ultimately, the U.S. government played a significant role in the outcome, as antitrust concerns made a deal with Novo too risky for Metsera.

The Federal Trade Commission indicated that Pfizer’s offer posed no regulatory issues, which contributed to Metsera's board favoring Pfizer's bid. Pfizer's CEO Albert Bourla has been under pressure to revitalize the company’s pipeline, especially as sales from its COVID-19 products decline.

With several failed attempts to develop obesity drugs internally, acquiring Metsera allows Pfizer to secure promising candidates in the weight loss space. Metsera, founded in 2022, is developing innovative drugs with the potential for fewer side effects than existing treatments like Novo's Wegovy and Eli Lilly's Zepbound.

The competitive landscape is shifting as Pfizer aims to gain an edge in the obesity treatment area, which is becoming increasingly crucial for pharmaceutical firms. The Metsera acquisition represents a substantial premium of 159% over its stock price prior to the initial offer, highlighting the intense competition and interest surrounding effective obesity treatments.

As the transaction is expected to close shortly after a shareholder meeting on November 13, it marks a significant strategic move for Pfizer in a rapidly growing market. The report indicates that Pfizer's shares have declined from their pandemic highs, reflecting the urgency for the company to pivot towards new revenue streams as patent expirations threaten to diminish sales by over $15 billion by the end of the decade.

The dynamics of the pharmaceutical industry are shifting, and this acquisition could reshape competitive strategies moving forward, particularly in the lucrative obesity drug sector.