Pfizer Acquires Carmot Therapeutics for $10 Billion, Wins Obesity Drug Acquisition Battle

Pfizer, a United States pharmaceutical company, has successfully acquired the obesity drug startup Carmot Therapeutics. It is interpreted as a victory in the acquisition battle against the Danish pharmaceutical company Novo Nordisk that lasted for two months.

Pfizer, a US pharmaceutical company Yonhap News

According to Bloomberg and The Wall Street Journal (WSJ) on November 8 (local time), Pfizer announced that it had agreed to acquire Carmot Therapeutics by investing more than 10 billion dollars (approximately 14.579 trillion won). Carmot Therapeutics is a startup developing both oral and injectable treatments for obesity and diabetes. However, it does not yet have any products available on the market.

Pfizer will finalize the deal if the acquisition proposal is approved at the Carmot Therapeutics shareholders' meeting on November 13. Under this acquisition agreement, Pfizer will pay 86.25 dollars per share to Carmot Therapeutics. This consists of a cash payment of 65.60 dollars and a contingent value right (CVR) of 20.65 dollars. A CVR is a right to receive an additional payment if certain predetermined milestones are achieved. In a statement, Pfizer said, "We will leverage our clinical, manufacturing, and commercial infrastructure to accelerate Carmot Therapeutics' drug development."

Pfizer and Novo Nordisk had been competing to acquire Carmot Therapeutics. In September, Pfizer initially proposed an acquisition deal worth 4.9 billion dollars to Carmot Therapeutics. However, as Pfizer and Novo Nordisk alternately raised their bids, the investment amount more than doubled. Novo Nordisk even increased its cash offer per Carmot Therapeutics share from 56.50 dollars to 62.20 dollars.

However, antitrust concerns from the United States Federal Trade Commission (FTC) regarding Novo Nordisk tilted the acquisition battle in Pfizer's favor. Pfizer had already received FTC approval for the Carmot Therapeutics acquisition.

Nevertheless, Novo Nordisk is expected to continue pursuing acquisitions to secure dominance in the obesity drug market. After the acquisition battle, Novo Nordisk stated, "Considering our financial soundness and shareholder value, we will not make further acquisition offers," but added, "We will continue to review business development and acquisition opportunities."