Why Metsera's Share Price Is Plummeting This Week

Innovative biopharmaceutical company Metsera (NASDAQ: MTSR) has been climbing all year. It went public on Feb. 3 of this year, priced at $18 per share, and immediately climbed above $27. It had been rising higher all year and closed above $83 on Friday, Nov. 7, a high for the stock.

But on Monday of this week, it plummeted below $71, a 15% drop in a day. What's going on?

A popular acquisition target

The big news for Metsera in recent weeks was a bidding war for the company between drug giants Novo Nordisk (NYSE: NVO) and Pfizer (NYSE: PFE). One of the biggest and most rapidly growing markets for pharmaceutical companies today is the GLP-1 market, with drugs that effectively treat type 2 diabetes and obesity.

Both companies are trying to catch GLP-1 market leader Eli Lilly, which now makes the world's best-selling drug. It's called tirzepatide, and Lilly sells it as Mounjaro for treating type 2 diabetes and Zepbound for weight loss. Tirzepatide became the world's best-selling drug in the third quarter. With year-to-date sales of $24.8 billion, it surpassed Keytruda, a blockbuster cancer immunotherapy drug made by pharmaceutical giant Merck.

The GLP-1 market is expected to get a whole lot bigger. The global market was valued at about $52 billion in 2024. That's expected to balloon to $187 billion by 2032, a compound annual growth rate of almost 17%. And that's a conservative estimate -- some projections of the market's growth are considerably higher.

Image source: Getty Images.

In the U.S. alone, the number of patients starting GLP-1 treatments for nondiabetic purposes has increased by 700% since 2019. And GLP-1 drugs have other potential uses, ranging from Parkinson's disease and Alzheimer's disease to arthritis and addiction.

A new GLP-1 candidate

That's where Metsera comes in. It is a next-generation, clinical-stage biopharmaceutical company that's developing several obesity treatments.

One of Metsera's drug candidates, MET-233i, can be taken less frequently than the Novo Nordisk and Lilly drugs, and has proven highly effective -- it helped patients in one study to lose 8.4% of their body weight in 36 days.

Pfizer announced plans to acquire Metsera -- and its promising new GLP-1 drug candidates with it -- back in September. Novo Nordisk countered the offer several weeks ago, and last week the bidding war was heating up. In fact, Novo Nordisk's CEO was in the White House, striking a deal on tariffs with President Donald Trump when he challenged Pfizer to bid more for the company, leading the market to believe the final acquisition price could go much higher.

Federal opposition

Yet late on Friday, Metsera ended the war, accepting Pfizer's latest bid for the company at a price of $86.25 per share. Metsera's board of directors may have been concerned that an acquisition by Novo Nordisk, a Danish company, could face opposition by the Federal Trade Commission.

That said, Metsera shareholders should be relatively happy, especially those who got in early after the initial public offering (IPO) this year and saw their shares triple in value.

Matthew Benjamin has positions in Novo Nordisk. The Motley Fool has positions in and recommends Merck and Pfizer. The Motley Fool recommends Novo Nordisk. The Motley Fool has a disclosure policy.