US HEALTHCARE: Pfizer: Metsera Acquisition in Jeopardy
Oct-30 18:14
(PFE; A2/A/NR)
#MNI #Healthcare
PFE likely to fight Novo's Unsolicited Offer for Metsera. Credit Neutral
- Pfizer agreed to acquire Metsera on Sept. 22nd and Novo Nordisk recently submitted a higher offer to acquire the Company. PFE's original deal was for $47.50/share and an initial EV of $4.9bn with a CVR of up to $22.50/share ($7.3bn potential total value).
- Novo submitted an offer on Oct. 30th which includes an initial $56.50/share with a CVR of up to $21.25/share for a total potential value of $9bn. Metsera's Board announced that Novo's bid was considered "Superior" under the Pfizer agreement terms (which Pfizer obviously disputes).
- Metsera is developing several new obesity drugs including a shot that could be taken less often than current leaders from LLY and Novo.
- The initial cash payment from Pfizer of $4.9bn would likely be funded with available cash on hand ($13bn at 2Q25) and the future CVR payment could be addressed with future free cash flows.
- We expect PFE to fight the unsolicited bid from Novo but it appears Pfizer will likely have to pay a higher price if it wants to secure Metsera's Board's recommendation.
- We don't believe a higher purchase price from Pfizer would materially change the Company's leverage profile as it ended 2Q25 with gross leverage of 2.6x and $13bn of cash on hand. A $7bn initial cash payment would not materially increase leverage so we wouldn't expect any change to PFE's ratings. Pfizer has been in de-leveraging mode since the $41bn acquisition of Seagen in 2023 and we think PFE will keep leverage in the 2.5x range going forward.
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US TSY FUTURES: BLOCK: Massive Dec'25 10Y Sale
Sep-30 18:03
- -30,000 TYZ5 112-17.5, sell through 112-18.5 post time bid at 1344:24ET, DV01 $2.032M
- The 10Y contract has since bounced off 112-17 post cross low to 112-18.5 last (+2)
EURGBP TECHS: Bull Trigger Remains Exposed
Sep-30 18:00
- RES 4: 0.8835 High May 3 2023
- RES 3: 0.8800 Round number resistance
- RES 2: 0.8769 High Jul 28 and the bull trigger
- RES 1: 0.8751 High Sep 25
- PRICE: 0.8724 @ 16:33 BST Sep 30
- SUP 1: 0.8665/8597 50-day EMA / Low Aug 14 and the bear trigger
- SUP 2: 0.8562 50.0% retracement May 29 - Jul 28 upleg
- SUP 3: 0.8540 Low Jun 30
- SUP 4: 0.8514 61.8% retracement May 29 - Jul 28 upleg
EURGBP is in consolidation mode but continues to trade closer to its recent highs, and a bullish theme remains intact. The latest recovery paves the way for an extension towards the bull trigger at 0.8769, the Jul 28 high. Clearance of this level would strengthen the bull theme. Support to watch lies at 0.8597, the Aug 14 low. A breach of this level would instead reinstate a recent bearish threat. First support is 0.8665, the 50-day EMA.
US DATA: Conf Board 1Y Inflation Expectations Dip But Remain Slightly Elevated
Sep-30 17:59
Near-term inflation expectations dipped in September's Conference Board consumer survey, but remain slightly elevated.
- The 1Y ahead average fell to 5.8% from 6.1% prior, with the median down to 4.7% from 5.0%.
- That mirrors the sequential dip in the UMichigan survey 1Y reading (4.7% vs 4.8%) in September, though the Conference Board is much closer to its own historical norms than the unusually elevated UMichigan.
- For perspective, the Conf Board 1Y average ended 2024 at 5.10%, with the median at 4.00%; Michigan's was just 2.8%. The Conf Board avg peaked at 7.00% / median 5.9% in April.
- Per the Conference Board report, “Consumers’ write-in responses showed that references to prices and inflation rose in September, regaining its top position as the main topic influencing consumers’ views of the economy. References to tariffs declined this month, but remained elevated and continued to be associated with concerns about higher prices."
