FTC Scrutiny and Bidding War: Novo Nordisk and Pfizer Compete for Metsera Acquisition

In a high-stakes bidding war that has captured the attention of the pharmaceutical industry, Novo Nordisk and Pfizer are vying for control of obesity biotech Metsera. The competition has intensified, with both companies increasing their offers and the Federal Trade Commission (FTC) raising concerns about potential antitrust violations.

FTC Raises Red Flags on Novo Nordisk's Offer

The FTC has signaled potential issues with Novo Nordisk's bid for Metsera, warning that the current deal structure may violate U.S. merger law. In a letter to lawyers representing Novo Nordisk and Metsera, the FTC expressed concerns that the proposed acquisition might breach the Hart-Scott-Rodino (HSR) Act if consummated without proper premerger review.

Daniel Guarnera, Director of the FTC's Bureau of Competition, wrote that the deal's structure, which involves a significant upfront payment for half of Metsera's shares, could allow the companies to sidestep regulatory scrutiny. The FTC is particularly concerned that this arrangement might reduce Metsera's "incentive to continue its development efforts to bring its pharmaceutical products to market."

Novo Nordisk maintains that its deal structure complies with antitrust laws. Ambre James-Brown, Vice President of Global Media & Stakeholder Communication at Novo Nordisk, stated, "We are in a constructive dialogue with the FTC addressing the potential issues identified in its letter, and we remain confident that our agreement with Metsera is consistent with the HSR Act and antitrust laws."

Escalating Bids and Legal Challenges

The competition for Metsera has seen rapid developments in recent days:

• Novo Nordisk initially offered up to $9 billion for Metsera, surpassing Pfizer's original agreement of $7.3 billion from September.
• Pfizer responded by increasing its offer to $8.1 billion and launching two lawsuits against Novo Nordisk and Metsera.
• Novo Nordisk then raised its bid to $10 billion, which Metsera declared "superior" to Pfizer's offer.
• Pfizer's acquisition proposal has already cleared the FTC review process.

A Pfizer spokesperson emphasized, "We maintain our position that the proposed structure of the Novo Nordisk bid is illegal under the Hart Scott Rodino Act and cannot represent a 'Superior Offer' under the terms of Pfizer's merger agreement with Metsera."

Strategic Implications and Industry Impact

The intense competition for Metsera underscores the growing importance of the obesity drug market. Novo Nordisk, already a leader in this space with its blockbuster drug Wegovy, seeks to expand its pipeline with Metsera's portfolio of up to eight weight loss candidates.

During Novo Nordisk's third-quarter earnings call, CEO Maziar Mike Doustdar addressed concerns about the strategic fit of Metsera's pipeline, stating, "When you have an ambition to go to hundreds of millions of people and treat them, then no pipeline is broad enough."

The outcome of this bidding war could significantly impact the competitive landscape in the obesity drug market, with potential implications for drug development, pricing, and patient access. As the situation unfolds, industry observers are closely watching for the next moves from Novo Nordisk, Pfizer, and regulatory authorities.