Pfizer-Seagen: Acquisition in the works

As announced earlier this week, Pfizer Inc. plans to purchase Seagen for US$43bn. The Boards of Directors of both companies approved the transaction of US$229 per share. The completion of the transaction is expected in late 2023 or early 2024, after the fulfilment of customary closing conditions. Seagen will as such join Pfizer’s oncology portfolio, which focuses mainly on treatment research and clinical development for breast cancer, genitourinary cancer, haematology, and precision medicine, and which in 2022 generated US$12.1bn revenues with their already approved cancer medicines.

Seagen Inc. has developed a leadership position in Antibody-drug conjugates (ADCs) technologies, with four out of the 12 FDA-approved ADCs using its technology. As targeting medicines that aim to deliver the chemotherapy agents solely to the cancer cells, ADCs are designed to limit the toxicity of the treatments to non-cancerous cells and are thus emerging as a possibly very powerful tool against a wide array of cancers. Seagen’s pipeline includes eleven new such molecular entities, all with global commercial rights and several while clinical treatment development programs are ongoing for new tumour types or expanded indications in earlier lines of therapy, with catalysts expected annually through 2027.

“Pfizer is deploying its financial resources to advance the battle against cancer, a leading cause of death worldwide with a significant impact on public health,” says Dr. Albert Bourla, Pfizer Chairman and Chief Executive Officer. “Together, Pfizer and Seagen seek to accelerate the next generation of cancer breakthroughs and bring new solutions to patients by combining the power of Seagen’s antibody-drug conjugate (ADC) technology with the scale and strength of Pfizer’s capabilities and expertise”.

Seagen had last year been discussed as a potential acquisition for the US Merck Inc. According to reports, this agreement fell apart over price at around US$40bn.Then, Pfizer stepped in with a first bet of US$30bn and landed beyond the stop signs for Merck.

Now with COVID in the rear-view mirror Pfizer heads towards an emerging billion-dollar market and strong growth trajectories of Seagen’s pipeline, estimating more than US$10bn in risk-adjusted revenues in 2030. They also estimated Seagen to generate around US$2.2bn of revenue this year, which would represent a 12% growth compared to last year. Since oncology continues to be the largest growth driver in global medicine Pfizer’s acquisition of Seagen marks a key step in the cancer treatment landscape.