In this week’s edition of InnovationRx, we delve into the battle for Metsera, the resignation of FDA’s top drug regulator, Kimberly-Clark’s $40 billion Kenvue deal, and more. To receive it directly in your inbox, subscribe here.
The showdown between Novo Nordisk and Pfizer over Metsera, a company focused on treatments for obesity and diabetes, reached new heights this week.
Last week, Novo Nordisk put forth an unsolicited bid for Metsera valued at up to $9 billion, nearly 25% higher than Pfizer’s previous offer of up to $7.3 billion.
A legal battle ensued, with Pfizer suing both companies in an attempt to block the acquisition. Pfizer later filed a second lawsuit claiming that Novo’s bid is anticompetitive. Metsera responded to Pfizer’s claims, calling them “nonsense. Just hours before a court hearing on a temporary restraining order, Novo raised its bid to as much as $10 billion, while Pfizer increased its own offer to as much as $8.1 billion.
This battle reflects the intense competition in the lucrative market for weight loss drugs. Metsera’s stock has surged by 40% since the acquisition was announced, and by 187% year-to-date. Pfizer, lacking weight loss drugs in its portfolio following the discontinuation of a potential medication last April due to safety concerns, is eager to secure them. Novo’s higher bid may face off against Pfizer’s U.S.-based advantage, as Reuters reported.
Although Metsera has no approved drugs on the market yet, its lead candidate is in phase 2 clinical trials, and its pipeline includes seven other drugs in development. Only a few other companies, such as Kailera and Viking Therapeutics, have drug candidates at a similar stage of approval that could be integrated into major pharmaceutical pipelines. Analysts project that Metsera’s pipeline could generate over $5 billion in peak sales.
Regardless of the outcome, the primary beneficiaries could be investors Arch Venture Partners and Population Health Partners, who established the company in 2022. Metsera CEO Whit Bernard, also an investor, co-founded Population Health after holding executive positions at The Medicines Co., which was acquired by Novartis for $9.7 billion in January 2022. Arch, led by Bob Nelsen, and Population Health’s Validae Health collectively own a 37.7% stake, as stated in their latest 10-K filing.
Trump Sparks SNAP Confusion, Claiming The Government Won’t Pay Beneficiaries Despite Court Order
A Houston resident receiving milk during a special food distribution by the Houston Food Bank Program on November 1.
AFP via Getty Images
President Donald Trump declared that the federal government would withhold Supplemental Nutrition Assistance Program (SNAP) funding from recipients during the shutdown, contrary to previous statements indicating that half of November’s payments would be made. The USDA ceased distributing SNAP funds to states on November 1, prompting a group of 25 states and Washington, D.C., to file lawsuits arguing that it was illegal for the government not to pay SNAP beneficiaries and demanding continued payments. Two judges, one from the district court of Massachusetts and the other from the district court of Rhode Island, ruled that the USDA should do so.
On Monday, the USDA announced that it would only partially fund November’s payments, opting not to utilize the $5 billion contingency fund to cover the full benefits. The plaintiffs in the Rhode Island district court case have requested that the Trump administration be mandated to provide full funding. A hearing is scheduled for Thursday.
About 42 million Americans rely on SNAP to support their food expenses each month, including approximately 25% of the nation’s children. The potential reduction or elimination of these benefits poses a risk to the health of those dependent on them, according to experts. Individuals with chronic conditions like diabetes, which require specific diets for management, are at a heightened risk.
Departure of FDA’s Chief Drug Regulator
George Tidmarsh, the top drug regulator at the FDA, resigned over the weekend following an explosive lawsuit from Aurinia Pharmaceuticals accusing him of abusing his position to carry out a “personal vendetta.” Tidmarsh had held the position for less than four months.
His departure comes amidst ongoing staff reductions at the agency under the Trump administration, resulting in the loss of over 20% of the workforce and more than half of senior leadership, as well as pressure from the administration on scientific assessments conducted by the agency. Tidmarsh told The New York Times that his dismissal may have been linked to concerns he raised regarding the legality of proposed changes to the FDA’s regulatory process.
Deal Highlight of the Week
Kimberly-Clark has reached an agreement to acquire Kenvue, the company behind Tylenol and other consumer health brands, for over $40 billion in a combination of cash and stock. This acquisition, one of the largest this year, will establish a consumer health powerhouse featuring Kimberly-Clark’s Huggies and Kleenex alongside Kenvue’s Band-Aid and Tylenol. Despite the legal challenges surrounding two of Kenvue’s brands, the deal has come to fruition.
Kenvue has faced scrutiny from President Trump due to unproven claims linking acetaminophen, the active ingredient in Tylenol, to increased autism risk during pregnancy. Texas filed a lawsuit against Kenvue in October, alleging that the company misled mothers about autism risks. Kenvue has refuted the allegations, citing “the perpetuation of misinformation” about acetaminophen’s safety. Additionally, the company is facing a lawsuit in the U.K. over allegations of talc in Johnson’s Baby Powder causing cancer. Kenvue has denied these claims and now uses cornstarch instead of talc in their powder.
The handling of litigation risks in the deal by Kimberly-Clark remains unclear. Kenvue’s shares have dropped by around 35% since its separation from Johnson & Johnson in May 2023. Kenvue
