Time to Buy Pfizer (PFE) or Metsera (MTSR) Stock?

Core Viewpoint - Pfizer plans to acquire Metsera for $4.9 billion, with potential total value reaching $7.3 billion including milestone payments, aiming to strengthen its position in the obesity drug market projected to be worth $100 billion by 2030 [1][3]. Group 1: Acquisition Details - The acquisition price is set at $47.50 per share, with milestone payments potentially increasing the total to $70 per share [1]. - Metsera's stock surged by 60% to over $50 following the acquisition announcement, while Pfizer's stock remained stable around $24 [2]. - Pfizer will finance the acquisition through cash and debt, while maintaining its dividend and capital priorities [2]. Group 2: Market Context - The obesity drug market is currently dominated by Eli Lilly and Novo Nordisk, with Eli Lilly's Zepbound controlling over 50% of the market and achieving an average weight reduction of 20.2%, compared to Novo Nordisk's Wegovy at 13.5% [4]. - Pfizer previously discontinued its own obesity drug, danuglipron, due to safety concerns [4]. Group 3: Financial Implications - The acquisition could help Pfizer mitigate the impact of upcoming patent expirations for key drugs like Eliquis and Ibrance [5]. - Metsera has raised $316.2 million through its IPO but is not expected to generate significant revenue in the near future [6]. - Pfizer's total sales are projected to slightly increase to $63.81 billion in the current year, with a slight decline expected in FY26 [12]. Group 4: Drug Pipeline - Metsera's MET-097i weight loss drug is in phase two trials, targeting hormones for weight loss and type 2 diabetes treatment [7]. - Metsera's MET-233i drug has shown promising results with an average weight loss of 8.4% in the first five weeks of phase 1 trials [7]. Group 5: Earnings Projections - Pfizer's EPS for FY25 is projected to increase to $3.14, while FY26 EPS is expected to decline to $3.08 [12]. - Metsera's FY25 EPS estimates have improved to a projected loss of -$2.79 per share, but FY26 estimates have worsened to -$3.64 [16].