Pfizer’s shares (PFE) edged higher on Thursday after shareholders of Metsera (MTSR) approved the American pharma giant’s offer of up to $10 billion to take over the obesity-focused biotech startup.
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This comes days after New York-based Pfizer upped its offer and won Metsera’s board approval for the deal, knocking out Danish rival Novo Nordisk (NVO). Both pharma giants had contested bitterly to take over the startup.
The acquisition offers Pfizer a chance to bolster its standing in the highly profitable obesity market—estimated at $70 billion—as demand for its COVID-19 products wanes and looming patent expirations for several drugs threaten to erode its revenue starting in 2027 and 2028.
Pfizer Aims at Lucrative Obesity Market
In recent years, Pfizer was forced to abandon its efforts to develop GLP-1 hormonal injections to fight obesity due to concerns about liver safety. However, Metsera’s once-a-month injection and pill-based drug pipelines for weight loss are seen as highly promising and have progressed into late-stage trials.
Pfizer offered to pay in cash $65.60 per share for Metsera, with an additional $20.65 per share based on the future performance of the startup. The startup is aiming to launch its drugs between 2028 and 2029.
“By acquiring Metsera, we are directing our resources toward one of the most impactful and high-growth therapeutic areas and positioning ourselves to define it,” Albert Bourla, Pfizer’s chairman and chief executive, said in a statement.
Big Pharma Battles for Obesity Market Share
Competition for a share of the obesity market — which costs American citizens, employers, and the government as high as $210 billion per year for adults with obesity — continues to intensify.
Novo Nordisk is preparing to launch an oral version of its blockbuster drug Wegovy, and is reportedly shopping around for other deals after being forced to back out of acquiring Metsera over antitrust issues. The Danish pharmaceutical company’s U.S.-based rival Eli Lilly (LLY) continues to gain ground in the same market.
Is Pfizer a Buy, Sell, or Hold?
On Wall Street, analysts’ stance towards Pfizer’s shares remains cautious. PFE stock currently has a Hold consensus rating based on four Buys, 10 Holds, and one Sell issued by 15 analysts over the past three months.
At $29.08, the average PFE price target implies about 11% upside potential from the current trading level.
