Bidding to purchase metabolic medicines biotech Metsera in September got here down to 2 pharmaceutical giants, with Novo Nordisk’s increased provide shedding out to Pfizer’s $4.9 billion price partially as a result of regulatory and monetary dangers tied to a possible cope with the Danish firm. These dangers stay, however Novo is again with a new unsolicited bid. It’s an identical deal as earlier than, however Metsera shareholders will get considerably extra assured cash up entrance.
Metsera is now ready to stroll away from Pfizer, saying Thursday it has concluded the new Novo offer is superior. Novo is proposing to pay $56.50 in money for every Metsera share, amounting to about $6.5 billion. That value is a greater than 69% premium to Metsera’s closing inventory value on Sept. 19, the final buying and selling day earlier than the Pfizer acquisition was introduced. Further payouts are contingent on attaining milestones.
Pfizer is challenging Novo’s provide, however not with more cash. The New York-based pharma large stated Novo’s provide can’t qualify as a superior proposal underneath the phrases of its acquisition settlement with Metsera. Pfizer stated it’s going to implement its authorized rights underneath this settlement.
Metsera is developing obesity drugs in the same class of medicines as Novo Nordisk’s Wegovy, a peptide drug that mimics intestine hormones to spark metabolic results that result in weight reduction. However Metsera’s GLP-1 drugs could offer dosing and manufacturing advantages over Wegovy and Eli Lilly’s Zepbound, the present market leaders. The biotech can be growing capsule formulations and pursuing extra weight problems targets. In an weight problems market that’s turning into more and more aggressive, Metsera’s applications may stand out within the discipline, making them engaging to any firm trying to make its mark in metabolic medicines.
Novo was amongst as many as eight firms that talked with Novo prior to now yr a few potential deal, in keeping with Metsera regulatory filings associated to the Pfizer acquisition settlement. “Get together 1,” now identified to be Novo, expressed early and constant curiosity. However amongst Metsera’s issues a few cope with Novo was the regulatory danger that this proposed tie-up wouldn’t move muster with antitrust regulators. For this danger, “Metsera would should be considerably compensated, if it may conform to a transaction with such dangers in any respect,” the corporate stated within the submitting.
Novo’s new provide is available in two steps. Cost of $56.50 in money for every Metsera share would come instantly following the signing of a definitive settlement — earlier than regulators even log off on the deal. In change, Metsera would challenge Novo non-voting most well-liked inventory representing 50% of its share capital. Metsera would then declare a dividend of $56.50 per share in money to be paid to shareholders 10 days later.
Following shareholder and regulatory approvals, the acquisition would proceed to the second step. Metsera shareholders would obtain a contingent worth proper (CVR) that would pay out as much as $21.25 per share in money based mostly on improvement and regulatory approval milestones and Novo would purchase the remaining excellent shares of Metsera. The milestones for the CVR are just like these within the Pfizer settlement and would tack on about $2.5 billion to the deal if all are met. The as much as $21.25 per share that Novo is proposing to pay now’s considerably lower than the as much as $37 CVR fee proposed in September, however is according to Pfizer’s CVR.
Except for the greenback quantities, Novo’s new proposal is basically the identical deal that Metsera’s board turned down in September. Based on the submitting, Metsera’s board acknowledged this deal construction offered better worth to the corporate’s shareholders than a standard termination payment payable if the deal doesn’t undergo as a result of regulatory points. However Metsera’s board determined in opposition to Novo’s September provide, noting that regulatory dangers may delay the closing of a deal by as much as two years and the CVR may not solely be paid after a very long time if it’s paid out in any respect.
The board’s causes for selecting Pfizer’s provide embody the understanding of that firm’s monetary phrases and a sooner deal shut. Pfizer anticipated to finish the transaction within the fourth quarter of this yr. Metsera’s board voted to simply accept Pfizer’s provide of $47.50 per share, or about $4.9 billion.
In a Thursday analysis notice, Leerink Companions analyst David Risinger stated it’s unclear why Novo has confidence antitrust regulators would assist its acquisition of Metsera provided that Novo together with Lilly dominate the marketplace for metabolic medication that mimic intestine hormones. Moreover, the Trump administration’s “America First” insurance policies may play a task in regulatory oversight of a Novo deal for Metsera.
Pfizer’s assertion issued in response to Novo’s new Metsera provide characterizes the deal as an try by an organization with a dominant market place to suppress competitors by taking up an American challenger. Pfizer contends the deal is structured in a approach that circumvents antitrust legal guidelines and comes with regulatory and executional dangers.
“The proposal is illusory and can’t qualify as a superior proposal underneath Pfizer’s settlement with Metsera, and Pfizer is ready to pursue all authorized avenues to implement its rights underneath its settlement,” the pharma large stated.
Like many M&A offers, Pfizer’s agreement with Metsera features a provision barring the biotech from searching for different provides. However the settlement permits Metsera to reply to unsolicited increased provides. Past extra worth to shareholders, the settlement defines a superior firm proposal as one which takes into consideration all phrases and situations, “together with all monetary, regulatory, financing, conditionality, authorized and different phrases and situations.”
Pfizer’s settlement with Metsera stays in impact for now. However the biotech’s notification that it plans to enter a definitive settlement with a superior provide provides Pfizer 4 enterprise days to revise its deal phrases. If Metsera terminates the Pfizer settlement to simply accept Novo’s provide, the pact requires the biotech to pay the pharma large a $190 million termination payment.
Picture: Liselotte Sabroe/Scanpix Denmark/AFP, through Getty Pictures
