WILMINGTON, Delaware (Reuters) -The structure of Novo Nordisk's $10 billion bid for obesity drug developer Metsera may violate provisions of U.S. antitrust law if the companies consummate the deal without
prior regulatory review, the U.S. Federal Trade Commission said in a Wednesday letter to the companies' legal teams.
The letter comes as Novo and Pfizer are engaged in a heated bidding war for Metsera, with each raising its bid this week. Pfizer has argued that Novo's bid carries regulatory risk, while Pfizer has obtained early clearance.
Both Novo and Metsera did not immediately respond to Reuters' request for comment.
Novo is a major player in the obesity drug segment, which Pfizer is hoping to crack by acquiring Metsera.
Daniel Guarnera, director of the Federal Trade Commission's competition bureau, said public health could be hurt by the proposed merger's structure, with Metsera getting large payments upfront in exchange for limits on its independence.
"Metsera, its shareholders, and its employees may have reduced incentive to continue its development efforts to bring its pharmaceutical products to market," Guarnera said in a November 4 letter to Novo Nordisk's and Metsera's lawyers.
He said it might be illegal for the companies to proceed with the merger without undergoing federal review, and urged them to cooperate rather than risk daily civil fines.
Pfizer sued Metsera's board and Novo Nordisk on Friday and is seeking a court order preventing Metsera from terminating its merger agreement with Pfizer to accept the rival bid. A judge is scheduled to hear arguments on Pfizer's request on Wednesday.
Pfizer said the two-step structure of the Novo Nordisk bid, which starts with a sale of non-voting stock to Novo, does not qualify under the merger agreement as a superior offer.
Metsera said in a Wednesday letter to the court that Pfizer dropped some of the conditions of its bid, including the requirement that Metsera's board denounce the Novo proposal as not viable. Pfizer also dropped its insistence on purchasing the Metsera stock held by ARCH Venture Partners, a significant shareholder, at deal signing.
Metsera said it valued Pfizer's bid at between $63.29 and $63.33 per share and Novo's bid at between $69.82 and $70.18 per share. Metsera stock was trading near $70.23 per share in Wednesday afternoon trading on Nasdaq.
(Reporting by Tom Hals in Wilmington, Delaware; Editing by Chris Reese and Mark Porter)
