Novo Nordisk goes to battle with Pfizer in the market for drugs to treat obesity: the company that was the pioneer and leader in the market, but suffered a significant hit to its stock with the strengthening of competitor Eli Lilly, offered $6 million immediately and up to $8.5 million in total, to acquire the biotechnology company Tessera. However, the same Tessera had already agreed to a purchase offer from Pfizer, in the amount of 4.7 to 7.3 billion dollars, and was supposed to be Pfizer’s entry ticket into the field.
Following the announcement, Matsera, which trades at a value of 5.5 billion dollars, rises by 20% at the opening of trading; Novo Nordisk down about 4% from the value of 173 billion dollars in which it was traded this morning on the Danish stock exchange; whereas a share Pfizer which is worth $138 billion, is still not responding significantly.
In reporting the development, Metsera announced that Novo Nordisk’s offer was better and that it was giving Pfizer four days to make its own offer. Pfizer, for its part, said that Novo’s proposal was “reckless” and that it would harm competition in the weight loss market.
Both companies are stressed
It should be said that both companies enter this event from a state of pressure. Novo’s stock, which soared when the company cracked the obesity treatment market with the products Ozampic and Vogobi, lost 65% of its value from the peak it recorded a little over a year ago. Her product is considered a little less effective in reducing the weight of patients compared to Eli Lilly’s, and in the past she even had production capacity challenges, which allowed Lilly to move forward at her own expense. Lilly’s product pipeline also looks a bit more intriguing than Novo’s in the eyes of some analysts.
Through this offer, Novo wants to strengthen its product pipeline and promise the market, once again, a dream for the future in the field of obesity treatment, especially after its patent on the active ingredient in Ozenfik and Vogobi drugs expires. Novo was recently reinvigorated by a new CEO, Mike Dostader, who is considered relatively aggressive, and the latest move looks exactly like the moves he came to make.
Pfizer, on the other hand, is recovering from the plunge in revenues after the corona bonanza. It is gradually building a new pipeline of products, but the CEO Albert Burla has already been attacked in the past by activist investors who claimed that the pipeline is not interesting enough. The company has tried and failed in the past to develop its own products for the field of obesity, and there is a great expectation of its investors to see it operating in the field.
As for Metsara – it is one of a small number of companies with relatively advanced products in the field of obesity treatment. It is not yet clear whether its products will have an advantage in effectiveness and side effects over those of Lilly and Novo, but it has one product in the pipeline that can be taken less frequently. In the weight loss market, there are patients who do not achieve results with the existing drugs or who suffer from particularly serious side effects, and there are those who did not reach their target weight with one drug and would be happy to try a combination of drugs. So definitely room for more products.
The issue of competition is also very significant, so it is likely that regulators in the US would be happy to see more companies in the field.
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