The UK breakthrough fuelling a $10bn bidding war

One scoop to start: Charles Schwab is expected to announce a deal to acquire Forge Global, the private share marketplace, with an offer valued as high as $600mn as it seeks to broaden investor access to closely held Silicon Valley unicorns.

In today’s newsletter:

• The Imperial College drug behind a $10bn mega-deal

• Wall Street comes to grips with its socialist mayor

• In Hong Kong, US finance executives proclaim China bullishness

The British biotech behind the biggest hostile deal in a decade

London isn’t exactly known for minting biotech unicorns, unless you count the occasional Oxford spinout or the odd gene-therapy darling.

But an Imperial College professor may have accidentally sparked the most thrilling hostile pharma battle in years.

Back in 2023, US biotech Metsera quietly picked up a British obesity drug start-up spun out of Imperial, paying up to $114mn for the professor’s life’s work. Tidy exit, British science wins, and everyone goes home for tea.

Fast-forward two years and those Imperial antibodies have turned into the belle of Big Pharma’s ball and the world’s most coveted weight-loss drug since Novo Nordisk’s Ozempic and Eli Lilly’s Zepbound remade the industry and investor waistlines alike.

Today, Novo Nordisk and Pfizer are locked in a $10bn fight for Metsera. This is after Pfizer already sealed a deal, prompting Novo to crash the party with an unsolicited offer and prompting a legal challenge that’s now playing out in Delaware courtrooms and White House corridors.

On Wednesday evening, Pfizer matched Novo’s offer in an effort to remain in the game. Meanwhile, scrutiny from the US Federal Trade Commission over Novo’s bid has added another twist.

But what is the fuss actually over? Metsera claims it has next-gen weight-loss tech, including longer-lasting injections and drugs using satiety hormone amylin.

Behind Metsera sit biotech powerhouses Arch Venture Partners and Population Health Partners, which find themselves presiding over the weight-loss equivalent of a Sotheby’s bidding war.

As one fund manager put it: Big Pharma needs new hits before their current blockbusters go generic. Cue boardroom bruising, court filings, political arm-twisting and CEO text message diplomacy.

The ultimate lesson here? While Europe is best at coming up with the most innovative weight-loss drugs, it’s American investors and dealmakers who are the kings of converting that science into multibillion-dollar windfalls. 

Wall Street comes to terms with Mamdani

Wall Street is nothing if not pragmatic. That’s even the case when the financial capital of the world elects a democratic socialist for mayor.

Zohran Mamdani’s win on Tuesday night was all but certain, with virtually every poll showing that not only would he be the next mayor, but he would win by a wide margin.

But within hours of his victory, Wall Street changed its tone. Even hedge fund billionaire Bill Ackman — notoriously one of Mamdani’s biggest critics — congratulated him on X. 

Mamdani’s campaign was laser-focused on affordability, a plan that includes raising taxes. Yet they comforted themselves knowing he would need governor Kathy Hochul’s backing to do any serious damage, such as the much-feared implementation of a 2 per cent tax on incomes over $1mn.

Of course, some donors on Wall Street of Mamdani’s rival, Andrew Cuomo, were counting voter turnouts in certain neighbourhoods earlier in the day as if the former New York governor could pull off an eleventh-hour coup.

“The early voting numbers are off the charts. That makes every poll that you’ve seen just wrong,” one hedge fund investor told DD late in the afternoon on Tuesday, a prediction that didn’t age well. 

But the majority of Wall Street had accepted Mamdani would be the city’s next leader, with many calculating that donating to Cuomo’s campaign was much like throwing more money at a company in a downward spiral. And as the mantra goes, never throw good money after bad.

Some Wall Street veterans have embraced the mayor-elect. Ralph Schlosstein, chair emeritus of investment bank Evercore, told the FT he voted for Mamdani. “He offered hope and opportunity,” he said.

At least one doesn’t seem to mind the taxes so much. The veteran financier Antonio Weiss said a “small tax increase paired with a real effort to make government more efficient” is a hard thing to argue against.

But how did they feel when they found out Lina Khan, former head of the Federal Trade Commission, has taken a role in the transition team? We’ll soon see how much they can stomach.

Masters of the Universe descend on Hong Kong

America’s titans of high finance landed in the former British territory this week to pay their tributes to their investor and regulator, the Hong Kong Monetary Authority.

They came to the HKMA’s Global Financial Leaders’ Investment Summit bearing one key message: China is back on global finance’s agenda.

The subtext being China and Asia will benefit from increased caution around US exposure from global allocators.

“What you’ve seen over the course of the last year was, after a shift away, a little bit of a shift back [to China] from global capital allocators and my guess is that will continue,” said Goldman Sachs chief executive David Solomon, who later flew to Beijing to meet with vice-premier He Lifeng.

“Hong Kong and China is where it begins and ends,” added Ted Pick of Morgan Stanley. “If you believe in a market where investors will reward great companies, where dispersion matters. AI, robotics, [electric vehicle] biotech — where you have not just national champions but global winners . . . you start here.”

They also came promising a revival in Chinese dealmaking. Jeffrey Perlman, chief executive of Warburg Pincus, said as investors “rethink” their US exposure and look to bring it down by “5 to 7 per cent . . . China is an interesting opportunity”.

Jean Eric Salata, the incoming chair of EQT, was more circumspect in his optimism. “The buyout market is relatively immature,” he cautioned, although he said the venture capital and growth industries were performing well and the role of Hong Kong as an exit venue and for liquidity was key.

“A lot of clients that we talk to, particularly non-US clients, feel like they’re over-allocated dollar assets. They’re looking at diversification . . . and one of the big beneficiaries of that, I think, is going to be Asia. And it’s going to be Hong Kong and China,” he said.

Job moves

• António Horta-Osório has joined France’s Crédit Commercial de France as deputy chair, his most prominent frontline banking role since resigning from Credit Suisse for breaching Covid-19 quarantine rules almost four years ago.

• BNP has tapped John Bigham to be head of investment banking for UK corporates. Simon Gates will take over UK corporate coverage and transaction banking.

Smart reads

A checkered history A little-known Italian businessman, who also happens to be one of the UK’s top-paid oil executives, could soon own a vital UK energy asset, Bloomberg reports. But allegations of forgery during previous dealmaking are following him closely.

Some kings Arizona insurance entrepreneur and conservative media figure Chris Buskirk led a coalition of donors who helped re-elect Donald Trump, the Washington Post writes. Now his organisation, Rockbridge, believes an “aristocracy” is needed for the country to progress.

Missing millions Moshe Silber, 32, owned two Gulfstream jets, three multimillion-dollar homes, luxury cars and jewellery. Now, after being sentenced in a mortgage fraud scheme, bondholders have been left searching for their missing $200mn, The Real Deal reports.

News round-up

Citadel Securities and Fortress take stakes in Ripple at $40bn valuation (FT)

Reform UK treasurer Nick Candy wins fraud claim against tech boss (FT)

Olivier Amar sentenced to more than five years for defrauding JPMorgan (FT)

Unilever says Ben & Jerry’s chair no longer suitable for board role (FT)

BDO nears merger of UK and Irish firms (FT)

Apple nears deal to pay Google roughly $1bn a year for Siri AI model (Bloomberg)

OpenAI isn’t yet working toward an IPO, CFO says (WSJ)