Pfizer wins obesity drug prize, with Trump administration assist

Pfizer killed one obesity pill in June 2023 and abandoned a second in April after a patient developed signs of liver injury, forcing the company to look outside Pfizer to compete in obesity Photo by Mark Lennihan/AP Photo/Postmedia files

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Pfizer Inc. chief executive Albert Bourla had long searched for an obesity drug to make up for dwindling sales of the pharma company’s aging blockbusters. Late Friday, after a dramatic bidding war, he learned he’d finally claimed his prize.

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Bourla found out at around 9 p.m. that evening, according to people familiar with the matter, that the board of Metsera Inc., a three-year-old biotech startup developing a new generation of weight-loss drugs, had voted unanimously to accept Pfizer’s takeover offer of as much as US$10 billion.

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The fight for Metsera reverberated all the way to the White House, where last week, standing alongside president Donald Trump, Novo chief executive Mike Doustdar challenged Pfizer to top its bid. “Our message to Pfizer is that if they would like to buy the company, then put your hand in the pocket and bid higher,” Doustdar said on Thursday.

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Pfizer promptly did so, submitting a sweetened bid Friday that was first reported by Bloomberg News, and matched a revised offer from Novo. Pfizer was prepared for the bidding to go through the weekend, according to people familiar with Pfizer’s thinking, but at 9:32 p.m. Metsera issued a news release saying that the United States drug giant had prevailed.

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Metsera indicated that the U.S. government had loomed large in its thinking, citing legal and regulatory factors in its decision-making.

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The U.S. Federal Trade Commission called Metsera on Friday to warn the obesity startup that the agency would look unfavourably upon a Novo deal, according to people familiar with the matter, following a letter the FTC sent to Metsera and Novo earlier in the week. Pfizer put in its winning bid moments later, the people said.

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Metsera’s board convened and discussed the FTC opposition, with some board members expressing concerns with proceeding with any Novo offer given the regulator’s warning, the people said. Given those worries, they said Metsera’s board resolved to negotiate a final deal with Pfizer.

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A representative for Metsera didn’t immediately respond to a request for comment.

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The FTC’s move to signal its concern about Novo’s proposed transaction structure during the bidding war was unusual, the people said. It was also the latest example of members of the Trump administration taking a more active role in corporate dealmaking.

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By Saturday morning, Novo bowed out. “I’m completely fine with this outcome,” said Doustdar, who had just flown back from Washington to Europe, in an interview with Bloomberg News over the weekend. “Not doing a deal is better than doing one with bad returns. We win some, we lose some. Our defeat makes us stronger.”

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Both Pfizer and Novo Nordisk have much at stake.

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Pfizer’s shares have shed about 60 per cent of their value since a pandemic-era peak in late 2021 and Bourla, who has been at the helm since 2019, is hoping to forge a path to Pfizer’s next megahit. Novo, which was a pioneer in the GLP-1 drug field, has been steadily losing ground to rival Eli Lilly & Co., whose blockbuster Zepbound is now the most successful GLP-1 for obesity. Lilly is also expected to roll out one of the first oral GLP-1 drugs by early next year.