Pfizer Inc. will pay $4.9 billion for the obesity startup Metsera Inc. in a bid to catch up to rival drugmakers after failing to compete with its own weight-loss medications.
The US drugmaker agreed to buy Metsera for $47.50 in cash per share, and further payments of up to $22.50 per share if three specific and regulatory milestones are met, it said Monday, with a total potential value of $7.3 billion. The deal represents a 43% premium to Metsera’s closing share price on Friday.
Pfizer is in the process of rebuilding in the aftermath of the pandemic, as demand wanes for its vaccine and pill for Covid and some of the company’s key drugs near the end of their patent life. The company’s efforts to improve its dimming sales growth prospects with an obesity medicine have largely flopped, leaving the pharma giant sidelined from the industry’s hottest market.
“I think it’s smart for them to just put a stake in the ground and continue to pursue what is clearly going to be the biggest therapeutic category out there,” Mizuho Securities analyst Jared Holz said.
Shares in Metsera rose 58% as markets opened in New York on Monday, while Pfizer climbed nearly 2%.
Metsera, one of several next-generation hopefuls in obesity, is developing a handful of experimental weight-loss drugs, including a shot that could be taken less often than the market-leading drugs from Eli Lilly & Co. and Novo Nordisk A/S. One drug, called MET-233i, helped patients shed up to 8.4% of their weight in 36 days in a recent study. It’s still in the early stages of development, meaning it’s several years away from reaching patients.
MET-233i “could have best-in-class potential in obesity,” according to Bloomberg Intelligence’s Michael Shah.
Obesity Market
Pfizer is counting on Metsera’s pipeline of medicines to catapult it into contention with entrenched rivals, giving the company a stable of combinable therapies executives believe could change the standard of care for obesity in the years to come.
“I think what we have is an embarrassment of riches,” James List, the company’s chief internal medicine officer, said on a call with analysts.
With the size of the obesity market expected to reach $100 billion by 2030, drugmakers from AstraZeneca Plc to Roche Holding AG are keen to join the space to catch up with Novo and Lilly. The Pfizer deal was first reported by the Financial Times.
Pfizer terminated development of its obesity pill in April after one patient in a clinical trial developed signs of liver injury, sparking speculation that the company would seek to break into the weight-loss market with acquisitions.
The setback increased pressure on Chief Executive Officer Albert Bourla to replenish Pfizer’s pipeline. Patent expirations are expected to erode sales by more than $15 billion through the end of the decade.
The company’s shares have fallen by about 60% from their pandemic peak.
Amylin Treatments
Metsera’s drug belongs to a class called long-acting amylin analogues. Amylin has emerged as a possibly gentler option to GLP-1 drugs like Wegovy and Zepbound, which can have high rates of side effects including nausea and vomiting. AbbVie Inc. is also betting on amylin after agreeing to buy Gubra A/S for up to $2.2 billion in March. Market leaders Novo and Lilly are testing amylin treatments.
About six months ago, Roche agreed to pay as much as $5.3 billion to license another amylin drug from Danish biotech Zealand Pharma A/S.
Amylin has been a bright spot as other recent obesity trials have had disappointing results. Viking Therapeutics Inc. was once seen as a possible takeout target for Pfizer, but a recent trial showed high rates of side effects, dampening hopes for a deal.
“Metsera’s pipeline of obesity therapeutics could meaningfully make Pfizer a more credible threat in the obesity landscape with Metsera’s long-acting injectable and oral agents,” BMO Capital Markets analyst Evan Seigerman said in a note shortly before the deal was announced.
Pfizer could strike further deals before the year is out, Chief Scientific Officer Chris Boshoff said. The company has said it will spend as much as $15 billion on acquisitions in 2025. The Metsera transaction follows Pfizer’s $1.25 billion licensing agreement with the China-based 3SBio Inc.
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