After two high-profile failures, Pfizer is clawing deeper into the obesity space with the $4.9 billion acquisition of Metsera.
Metsera, a small clinical-stage biotech company, is working on multiple approaches to weight loss. It has a potential weekly and monthly GLP-1-targeting drug — similar to Novo Nordisk's Wegovy — and a drug dosed monthly that mimics amylin. Amylin plays a role in regulating blood sugar levels, appetite and gastric emptying.
The company also has two weight-loss pills expected to begin testing in people soon.
"Obesity is a large and growing space with over 200 health conditions associated with it," Pfizer Chief Executive Albert Bourla said in a statement. "The proposed acquisition of Metsera aligns with our focus on directing our investments to the most impactful opportunities and propels Pfizer into this key therapeutic area."
On today's stock market, Metsera shares skyrocketed 60.8% to close at 53.58. Meanwhile, Pfizer stock rose a fraction to 24.05.
Pfizer Is Coming From Behind
Pfizer has long been seen as a laggard in the race to develop blockbuster weight-loss drugs. In its efforts to catch Novo Nordisk and Eli Lilly, Pfizer has scrapped two experimental drugs that led to elevated liver enzymes. The company has a third GLP-1-targeting drug in development.
Acquiring Metsera could bolster Pfizer's top line by north of $5 billion in the long run, Leerink Partners analyst David Risinger said in a report. He initiated coverage of Metsera stock earlier this month with an outperform rating, noting the company has a differentiated pipeline in obesity treatment.
In an interview with Investor's Business Daily in July, Metsera Chief Scientific Officer Brian Hubbard predicted weight-loss drugs would change the trajectory for people with diseases that typically occur alongside obesity, including type 2 diabetes, sleep apnea, heart failure, high cholesterol and elevated blood pressure.
"Some people are extraordinarily sensitive to excess body fat," he said. "They'll develop type 2 diabetes and be almost normal weight. And others won't develop type 2 diabetes until they're 300 pounds overweight. But this all exists in a continuum. And fundamentally, these drugs are gonna alter that continuum and impact a lot of diseases."
Metsera Deal Includes A CVR
Under terms of the deal, Pfizer will pay $47.50 per share of Metsera stock. The deal also includes a non-tradable contingent value right worth up to $22.50 per share, tied to specific milestones.
Investors will receive $5 per share after the start of a Phase 3 study testing Metsera's GLP-1 drug and an amylin-targeting drug. They will receive $7 a share after the approval of the same GLP-1 mimicker, and $10.50 per share following the approval of the GLP-1/amylin combination.
The companies expect the deal to close in the fourth quarter.
Metsera stock has run up markedly this year. After hitting a low point at 12.30 intraday on April 9, shares surged 285%, hitting an intraday high at 47.40 on July 18. Though the stock had pulled back somewhat since, shares were still up more than 85% from their initial public offering price at 18 in January.
The move Monday was Metsera's largest-ever percentage increase.
Follow Allison Gatlin on X/Twitter at @AGatlin_IBD.
