Adds details from the Bloomberg report in paragraph 6, background in paragraphs 7-8

Nov 7 (Reuters) - Pfizer PFE.N has submitted a sweetened bid for Metsera MTSR.O, an obesity drug developer, as its fight against rival Novo Nordisk NOVOb.CO escalates, Bloomberg News reported on Friday.

The new offer improves upon Pfizer's earlier $86.20 a share proposal including milestone payments, the Bloomberg report said, citing people familiar with the matter.

Reuters could not immediately verify the Bloomberg report.

Pfizer, Novo Nordisk and Metsera did not immediately respond to Reuters requests for comment.

Novo raised its offer for the U.S. biotech company on Thursday, just hours after New York-based Pfizer matched the Danish drugmaker's previous $10 billion proposal late on Wednesday.

Under the terms of its merger agreement, Pfizer would win even if the companies offered the same amount, and the bidding war could continue with Novo increasing its offer, the Bloomberg report added.

The acquisition fight has escalated into a legal and strategic standoff with Novo seeking to wrest Metsera’s obesity drug assets from Pfizer's grip through a complicated deal structure that has drawn scrutiny from regulators.

The bidding war started privately in January and became public last week, when Novo made an unsolicited offer for Metsera in a challenge to Pfizer’s $7.3 billion agreement, which was unveiled in September.

(Reporting by Rishabh Jaiswal in Bengaluru; Editing by Leslie Adler and Thomas Derpinghaus)

((rishabh.jaiswal@thomsonreuters.com;))