Pfizer plays hardball in weight-loss drug fight

0:28Good morning from the Financial Times. U.S. dollar, and the White House is pushing back. I'm Mark Filippino, and here's the news you need to start your day.

0:44The good times keep on rolling for Palantir. The data intelligence company boosted its sales guidance for 2025 yesterday. The projection went from a little more than$4 billion to$4.4 billion, which is more than what Wall Street was expecting. Palantir is another company riding the artificial intelligence wave. It sells AI software to businesses and governments around the world to process data. And it's a quiet stock market darling. Palantir's share price is up more than 170 % this year. Its market cap is close to$500 billion.

1:24There's a legal showdown brewing over a pharmaceutical merger in the U.S. Pfizer has filed two lawsuits to stop its Danish rival Novo Nordisk from buying the American biotech company Metzera. Metzera is developing next-generation weight loss treatments. Pfizer is alleging the merger would violate anti-competition laws. Here to tell us more is Oliver Barnes, who's the FTZUS deals and activism correspondent. Hi, Oliver. Hey, Mark. So Oliver, before we get into the lawsuits themselves, tell me about the deals here that revolve around Metzera. So what we've seen is something extremely rare in the biotech sector, which is a kind of acrimonious public bidding war over a biotech.

2:08In September, Pfizer beat out a number of other parties to agree a deal to buy Metzera for up to$7.3 billion. And out of the blue, Novo then came and gazumped Pfizer's offer with a better offer of up to$9 billion, which the board of Metzera deemed to be superior. And it's that which has led to these series of lawsuits. Because instead of responding with its own sweetened bid, Pfizer have taken a different path to bring litigation, effectively arguing that the deal that Novo did was illegitimate. Yeah, tell me a little bit more about these lawsuits. What exactly is Pfizer alleging? Well, one of which is aimed at trying to bring a temporary restraining order on the deal getting done.

2:56And the other of which is alleging that it's in contravention of U.S. antitrust laws. Really at the center of Pfizer's case is the strange structure of this deal. So instead of paying upon closure, which is the way that most deals work, Novo agrees to pay MetSera almost immediately after signing, pays them$6.5 billion up front, which is then dividended to MetSera shareholders, and Novo takes a 50 % non-controlling stake in the company, which then converts to a controlling stake when it closes. What Pfizer argues about that deal is that it's aimed squarely at trying to find wiggle room and ways around antitrust laws and effectively avoid regulators ever looking at this.

3:48And both Novo Nordisk and Metzera have shot down Pfizer's arguments in court. Metzera called them nonsense. Novo Nordisk said they were fundamentally wrong. I think it's important to give a little context around these companies because both Novo and Pfizer are struggling, right? Well, yeah, underlying this is two companies that are not in an ideal situation at all. On the one hand, you have Novo, which at one point seemed like it was the victor from the obesity drug race. But in fact, it's fallen behind Eli Lilly. On the other hand, you have Pfizer, which has faced activist pressure in the last few years.

4:26And behind all of this is basically that in farmer land right now, investors really only care about one thing, which is do you have a weight loss drug or do you have a next generation weight loss drug? At the moment, these drugs are largely weekly injectables. And what MetSera has in its pipeline is four different treatments, one of which is a monthly injectable, the other of which is a pill, and the other two use a different chemical mechanism. and the idea behind Pfizer getting their hands on this or Nova getting their hands on this is this is probably going to be one of the leading treatments.

5:05So it gives them an avenue to compete in two, three, four years' time. Okay, so I get why Metzera is important, but why is Pfizer filing these lawsuits instead of just upping its bid? I don't think the two are necessarily mutually exclusive. This could all be a prelude to Pfizer coming back with a sweetened offer in the next 24, 48 hours. But also what Pfizer's trying to kind of do is activate some of the politics around this deal. Think of it in broad brushstrokes. This is a foreign drug maker buying an American biotech that was about to be taken over by an American pharmaceutical company. And, you know, in a time of America first, they're kind of pressing the Trump button.

5:47Oliver Barnes is the FT's U.S. Deals and Activism correspondent. Thanks, Oliver. Thanks, Mark.

5:58OpenAI has signed another massive deal for computing power. This time it's with Amazon Web Services for$38 billion. It'll allow the startup to use AWS infrastructure to run its products, and that includes chips from NVIDIA. This latest deal in OpenAI's spree brings the company's recent commitments to nearly$1.5 trillion. Now, there are two things I want to point out about this agreement in particular. One, it ties OpenAI more closely to Amazon, which has committed to invest$8 billion in the rival AI group Anthropic. And two, it reduces OpenAI's dependence on its biggest investor, Microsoft. Amazon's share price ended the day up 4%.

6:48China is trying to chip away at the U.S. dollar's global dominance. Beijing wants emerging markets to use the greenback less in cross-border transactions. And the Trump administration is considering how to push back. The FT's U.S. economics editor, Claire Jones, joins me now to talk about that. Hey, Claire. Hi there. So what exactly is the administration's plan for so-called dollarization, the idea of getting other countries to adopt the dollar as their currency? So the reason why it's potentially pursuing it is that they're spooked by what they're seeing happen in some emerging markets, which is that people are using the dollar less for transactions and using other currencies, particularly China's renminbi.

7:32And that gives a sense that the dollar may lose some of its power. Washington may lose some of its power at Beijing's expense. And the administration's made very clear that that isn't what it wants to see. Now, dollarization would be one potential strand of this. We've also seen the administration push dollar-backed stablecoins, which should also increase the usage of dollars potentially in emerging markets. What I would caution here is that these are really preliminary discussions. There isn't a sense in which this is about to become government policy tomorrow. Yeah, how preliminary is preliminary?

8:13How far along are these talks? This is definitely something that's a possibility rather than a certainty. What we know so far is that the administration has invited in one of the leading global experts on dollarization, Steve Hankey, a professor at Johns Hopkins University, to speak to senior officials. When we talked to Hanke, the sense he got was that the meetings that he's had so far went on for several hours. The debate suggested to him that there were people around the table who were very interested in this idea, that it was a policy they were taking very seriously. However, both he and the White House made clear that no decisions have been made yet to formally adopt this as something that the US will pursue.

9:02Okay, but if it is something that is pursued, what countries have been floated as candidates for the policy? Well, when I talked to Hanky, you know, he said Argentina was one of the most obvious ones. You know, some of the other ones that he mentioned were Lebanon, Pakistan, Turkey, Venezuela, Zimbabwe. I think, you know, what unites a lot of these countries is that they've got currencies which are not particularly stable. And the idea would be that if there was more usage of the dollar, it would provide some comfort to their citizens who for a long time have really suffered from volatility and very high inflation.

9:45Has there been any pushback to this idea, Claire? Absolutely. Well, we've already heard from senior ministers in Argentina that this isn't something that they think could happen in the short term. But there is a sense in which with Argentina, we do have these perennial crises and the sense in which something does need to be done to really call time on that and, you know, create some stability for people in Argentina. And the idea that people have is that, you know, a lot of these crises come down to the peso and there being a lack of trust in the peso. And the way around that would be to adopt the dollar.

10:25But just to emphasize, you know, there's no sense from either the U.S. Treasury or from the Argentine authorities that this is something they're looking to do imminently. That's the FT's U.S. economics editor, Claire Jones. Thanks for your time. Thank you. you can read more on all these stories for free when you click the links in our show notes this has been your daily ft news briefing check back tomorrow for the latest business news