Pfizer files second lawsuit to block Novo Nordisk’s $9bn Metsera bid

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Pfizer has filed a second lawsuit against Novo Nordisk and obesity drug start-up Metsera, redoubling its fight to stop Novo’s bid for the biotech by alleging the deal would violate competition laws in the weight-loss drugs market.

In its suit filed in a US district court in Delaware, the US drugmaker said Denmark-based Novo’s proposed acquisition of Metsera would “protect its dominant market position in GLP-1s by capturing and killing a nascent American challenger before it gains the support of Pfizer, one of America’s leading pharmaceutical companies.

“Something is clearly rotten in the state of Denmark,” Pfizer said, quoting from Shakespeare’s Hamlet. The complaint accused Novo of “bribing” Metsera, its board and its main investors “to control its fate and forestall Metsera’s game-changing products from coming to market for as long as possible”.

The battle over Metsera, one of the most coveted anti-obesity biotechs, pits Novo, one of the two dominant players in the GLP-1 market trying to rejuvenate its potential, against Pfizer, a potential new entrant whose medicine being developed in-house flopped in clinical trials earlier this year.

New York-based Metsera and Novo quickly fired back at Pfizer on Monday.

“Pfizer is trying to litigate its way to buying Metsera for a lower price than Novo Nordisk,” Metsera said in a statement. “Pfizer’s litigation arguments are nonsense.”

Metsera also asked the Delaware Court of Chancery to reject Pfizer’s request for a restraining order hearing on Tuesday to block Novo’s bid. The Danish drugmaker’s offer is a “vastly superior deal” for the company’s shareholders, Metsera said.

Novo said Pfizer’s antitrust arguments were “fundamentally wrong”.

“This is an intensely competitive space, with at least a dozen other products being developed by major pharma companies,” Novo said in a statement. “We are confident this transaction does not raise any antitrust issues.”

Metsera’s shares were 2.6 per cent lower in early afternoon trading on Monday. Novo shares were down 1.3 per cent while Pfizer’s were little-changed.

Pfizer’s lawsuit filed on Monday targets Metsera’s controlling shareholders Arch Ventures, Validae Health and Population Health Partners, which the US drugmaker alleged “have conspired with Metsera and Novo Nordisk in furtherance of these anti-competitive activities”.

The latest lawsuit escalates of Pfizer’s efforts to block the Danish drug giant’s up to $9bn offer for Metsera, tabled last week. Novo is hoping to outbid Pfizer, which in September agreed to acquire the biotech for $7.3bn.

Pfizer filed its first lawsuit to block the deal on Friday, seeking damages and asking a Delaware judge to put a pause on any deal getting done while litigation is ongoing. In the first sign of Washington weighing in on the deal, the US Federal Trade Commission on Friday fast-tracked antitrust approvals for Pfizer’s deal.

At the centre of the lawsuits over Novo’s bid for Metsera is an unusual two-step deal structure, which pays Metsera’s shareholders $6.5bn almost immediately after signing via a dividend in exchange for a 50 per cent non-voting stake. Novo would then take control of the company upon closure.

Pfizer in its complaint on Monday said Novo’s “novel deal structure would achieve Novo Nordisk’s anti-competitive aims while sidestepping the fact that a Novo Nordisk/Metsera deal was destined to fail”.

Metsera is one of a handful of biotechs developing next-generation weight loss treatments looking to capture a slice of the market that is currently dominated by Eli Lilly and Novo Nordisk. It has four clinical trials under way for obesity drugs, including a long-acting monthly injectable and a pill, giving them a competitive advantage compared with existing weight loss treatments.

In an interview with the Financial Times, Eli Lilly chief executive David Ricks said the company would not bid for Metsera. “We’ll let Pfizer and Novo fight over this one,” he said, adding that “obviously Novo has a position in the sector” for weight-loss drugs and that it is up to governments to decide how the deal should proceed.