Pfizer Will Buy Biotech Seagen For $43 Billion
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Seagen attracted the attention of Pfizer and other drugmakers because of the potential of ADCs. Merck & Co. discussed buying Seagen last year, but the companies could not agree on a price. However, it was Pfizer that turned out to be the winner.
The deal
Pfizer Inc has agreed to pay $43 billion for Seagen Inc biotech. and its pioneering class of targeted cancer drugs.
Under the terms, Pfizer will pay $229 a share in cash, the drugmaker said Monday. The companies expect the deal, which includes the debt, to be finalized by the end of this year or early next year.
The deal is an early sign that despite the threat of tighter antitrust controls and higher interest rates, big pharmaceutical companies are ready for some heavy deals this year.
Seagen, which is based outside Seattle, pioneered a class of drugs known as antibody-drug conjugates, or ADCs, that can target tumors with a toxic agent.
Drugs could become one of the next big segments of the $375 billion global cancer drug market, accounting for $31 billion in sales in 2028, drug research firm Evaluate estimates.
New York-based Pfizer has been looking for acquisitions to help it offset an expected loss of $17 billion in sales by 2030.
Pfizer executives said they expect federal antitrust authorities to sign the deal because the company and Seagen provide complementary opportunities.
The Seagen acquisition will help Pfizer meet its goal of generating additional revenue of $25 billion by 2030.
Seagen, which expects revenue of $2.2 billion this year, could bring Pfizer more than $10 billion in revenue by 2030 if biotech manages to expand the use of its drugs to more types of cancer, Pfizer executives said.
Pfizer's revenue targets exceed many analysts' estimates, but Bourla called them reasonable. He said Pfizer could help Seagen expand its commercial capabilities and use its global drug development network to help Seagen accelerate its work.
Cancer treatment is central to Pfizer
The sale of Pfizer's Covid-19 vaccine and drug has boosted the company's performance in recent years. Executives said they could not count on the same level of sales in the future as the pandemic enters an endemic phase, prompting the company to use tens of billions of dollars in Covid-19 revenue to close deals.
Cancer treatment is a key Pfizer franchise, bringing in more than $12 billion of the company's $100 billion in sales last year.
Pfizer is looking to increase its influence on anti-cancer drugs. Analysts said Seagen's therapies will expand Pfizer's breast and bladder cancer drug portfolio while complementing its efforts to build a foothold in other cancers with large patient populations, such as myeloma.
Pfizer was eager to add cancer drugs to its portfolio, Bourla said. Seagen was particularly attractive because it already has four approved products.
Pfizer share price
Pfizer's share price since mid-December after reaching a peak of 54.48 began to fall. Stock prices have fallen to 39.39, a level last seen in the first half of 2021.
Pfizer shares were up 2.7% on the New York Stock Exchange Monday morning, while Seagen shares were up more than 16%. Thus, Pfizer shares reached the level of 39.86, and Seagen - $ 197.65.
Source: wsj.com, finance.yahoo.com
