Pfizer signs US$43 billion Seagen deal in cancer drug push
PFIZER on Monday (Mar 13) struck a roughly US$43 billion deal for Seagen to bulk up its cancer treatments portfolio, as the drugmaker braces for a steep fall in Covid-19 product sales and loss of exclusivity for some top sellers.
The deal, Pfizer’s biggest in a string of acquisitions after a once-in-a-lifetime cash windfall from its Covid-19 vaccine and pill, will add four approved cancer therapies with combined sales of nearly US$2 billion in 2022.
Pfizer will pay US$229 in cash per Seagen share, a 32.7 per cent premium to Friday’s closing price. The offer is also a nearly 42 per cent premium to the stock’s close on Feb 24, a day before the Wall Street Journal first reported on a possible deal.
Seagen’s shares rose to US$207 before the bell on Monday.
Pfizer has hit the deals route in its quest to mitigate the impact from an anticipated US$17 billion drop in revenue by 2030 due to patent expirations for top drugs and decline in demand for its Covid products.
“While Pfizer still has more firepower to do deals, we think integrating such a large company could make (Pfizer) take a pause on M&A front,” Wells Fargo analyst Mohit Bansal said in a research note.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
The drugmaker expects more than US$10 billion in “risk-adjusted” sales from Seagen in 2030.
Washington-based Seagen is a pioneer of antibody-drug conjugates (ADCs), which work like “guided missiles” designed for a targeted destructive effect and spare healthy cells.
Pfizer’s portfolio of oncology therapies includes 24 approved drugs, including breast cancer treatment Ibrance.
The companies expect to complete the deal in late 2023 or early 2024.
The deal is unlikely to face major antitrust challenges as the companies do not have major overlapping products, Bansal said, but could still face some scrutiny due to its size.
Pfizer rival Merck & Co and Seagen were in advanced deal talks last year, but that reportedly collapsed over fears of tough antitrust scrutiny. REUTERS
Share with us your feedback on BT's products and services
