TLDR
- Novo Nordisk submitted a $9 billion unsolicited bid for Metsera, overriding Pfizer’s existing $7.3 billion purchase agreement with the startup.
- Pfizer called the Danish company’s tactics unprecedented and promised to enforce its original contract through legal channels.
- The weight-loss medication sector is forecast to hit $72 billion in sales for 2025, expanding to $139 billion by 2030.
- Eli Lilly reported third-quarter revenue of $17.6 billion, representing 54% growth fueled by obesity drugs Mounjaro and Zepbound.
- Jim Cramer expressed skepticism about Pfizer’s trajectory, noting drug stocks face challenges despite the company’s attractive 7% dividend yield.
A corporate battle has exploded in the pharmaceutical sector. Novo Nordisk threw down a $9 billion offer for Metsera, directly challenging Pfizer’s signed acquisition deal.
Pfizer fired back immediately. The company denounced Novo’s tactics and committed to defending its agreement through every available legal avenue.
The American drugmaker accused Novo Nordisk of trying to eliminate competition and circumvent regulatory oversight. Pfizer maintains its September contract with Metsera remains binding.
This confrontation comes during a difficult period for Pfizer. Jim Cramer recently discussed the company’s performance on his investment show.
“The drug stocks are just in a world of hurt, and this one continues to be there,” Cramer explained. While praising the 7% dividend, he questioned whether meaningful change was coming.
The financial commentator also criticized the Seagen transaction. “Pfizer is being viewed as a company that doesn’t really have anything,” he said during a September broadcast.
The Metsera Competition
Weight-loss treatments represent a goldmine for pharmaceutical companies. Experts predict $72 billion in worldwide sales this year.
The market could reach $139 billion within five years. This growth trajectory has everyone scrambling for position.
Metsera developed experimental drugs that delivered impressive preliminary results. The startup’s once-monthly injection might achieve $5 billion in peak annual revenue.
The three-year-old company has roughly 100 employees and zero commercial products. Yet its pipeline attracted intense interest from industry giants.
Analysts believe Metsera’s treatments offer practical benefits. Patients need fewer injections and may experience reduced gastrointestinal problems.
The company is simultaneously working on oral medications. Pfizer initially agreed to pay $7.3 billion total for the acquisition.
This happened after Pfizer’s own internal research programs failed to produce viable candidates. Novo Nordisk had competed in the original bidding process but came up short.
Market Dominance Battle
Novo’s enhanced proposal features $56.50 per share cash plus $2.5 billion contingent on development milestones. Metsera confirmed this offer surpasses Pfizer’s terms.
Hostile takeover attempts rarely occur in pharmaceutical deals. But Novo Nordisk desperately needs to reclaim lost ground.
Eli Lilly demonstrated market strength this week. The company posted $17.6 billion in quarterly sales, climbing 54% from last year.
Weight-loss drugs Mounjaro and Zepbound drove the performance. Lilly now commands an $800 billion valuation as the industry’s most valuable player.
Novo Nordisk previously dominated with Ozempic and Wegovy. Production bottlenecks and strategy errors allowed Lilly to capture leadership.
The Copenhagen-based firm also encountered setbacks developing improved formulations. Market analysts consider Lilly better positioned for future dominance.
Novo Nordisk executed a major leadership shakeup recently. The board installed a new chief executive and plans additional director replacements.
Last month, Novo revealed plans to eliminate 9,000 positions, cutting 11% of its workforce. This aggressive restructuring represents a stark departure from the company’s traditional culture.
CEO Maziar Mike Doustdar views Metsera as essential to corporate strategy. Acquiring the startup would strengthen Novo’s development capabilities and restore competitiveness in the $150 billion obesity medication arena.
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