Pfizer sues Metsera for backing Novo Nordisk's higher $8.5B offer
What's the story
Pfizer has filed a lawsuit against Metsera and Novo Nordisk, alleging that Metsera breached its merger agreement obligations by deeming Novo's $8.5 billion bid as a superior offer. The legal action comes after Pfizer received early antitrust clearance from the US Federal Trade Commission (FTC) for its proposed $7.3 billion acquisition of Metsera.
Information
Restraining order to prevent Metsera from terminating agreement
Pfizer has requested temporary restraining order from a Delaware court to prevent Metsera from terminating their merger agreement. The company has until Tuesday to raise its offer, according to Metsera. Pfizer also wants the shareholder vote scheduled for November 13 to go ahead as planned.
Response
Novo Nordisk calls Pfizer's claims 'meritless'
Responding to the lawsuit, a Novo Nordisk spokesperson said, "Pfizer's claims against Novo Nordisk are meritless, and we will vigorously defend ourselves in any litigation." Meanwhile, Metsera has stated that it disagrees with Pfizer's allegations and will address them in court. The legal battle highlights the competition for Metsera's promising obesity drug pipeline.
Acquisition timeline
Lawsuit reveals intense competition for Metsera
The lawsuit details a tussle for Metsera that began in early 2024 with discussions between the company and potential acquirers. Both Pfizer and Novo Nordisk expressed interest. Novo, the maker of Wegovy and Ozempic, is trying to regain ground in the obesity drug race after losing market share to Eli Lilly. Metsera is working on experimental therapies that analysts say could generate $5 billion in sales.
Market entry
Pfizer's obesity market bet crucial for its future
Pfizer, which doesn't currently sell a weight-loss drug, is betting on Metsera to help it enter the $150 billion obesity market. This move is part of its strategy to offset falling COVID-related revenue and looming patent expirations. The lawsuit alleges Novo's bid was an illegal attempt by a dominant player to suppress competition in this fast-growing market.
Regulatory concerns
Lawsuit highlights US concerns over foreign investments
Pfizer's lawsuit emphasized its role as a leading US corporation, and Novo Nordisk as a foreign competitor. A letter from Pfizer's lawyers to Metsera repeatedly described Pfizer as "an American company" and said a Novo Nordisk deal "may draw scrutiny from CFIUS," referring to the Committee on Foreign Investment in the United States. The government body reviews foreign investment in the US, which can give the US president ultimate authority over a transaction.