American pharmaceutical giant Pfizer (PFE) is buying weight-loss drug developer Metsera (MTSR) in a deal valued at $7.3 billion U.S.
Pfizer is making the purchase to help it enter the lucrative market for obesity treatments. Metsera had gone public in January of this year and since then, its stock is up 26%.
Currently, the obesity drug market is dominated by Pfizer’s rivals Eli Lilly (LLY) and Novo Nordisk (NVO).
However, most analysts agree that the market for weight-loss drugs is still in its infancy and has room to grow.
How big the weight-loss drug market ultimately gets will depend on payer coverage, supplies, and regulatory oversight, say analysts.
Prior to the Metsera acquisition, Pfizer had been developing its own weight-loss pill called Danuglipron, although that medication ultimately failed.
Pfizer said it will now pay $47.50 U.S. per share in cash for Metsera, a 43% premium to the last closing price of its stock on Sept. 19.
Metsera is also eligible to receive an additional $22.50 U.S. per share from Pfizer contingent on the company reaching certain performance milestones.
MTSR stock skyrocketed 60% higher in premarket trading on news of the acquisition.
Pfizer’s stock has declined 10% this year to trade at $24.03 U.S. per share.
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