BY Richard Summerfield
In a transaction that will boost its cancer treatments portfolio, Pfizer Inc has agreed to acquire biotech firm Seagen Inc in a $43bn deal.
Under the terms of the deal, Pfizer will pay $229 in cash per share to buy Seagen, funding the transaction through $31bn of new long-term debt, as well as short-term financing and cash. The company is paying a premium of about 35 percent to Seagen’s closing price on Friday, the last day of trading before the deal was announced. The deal is expected to complete in late 2023 or early 2024.
The move for Seagen comes as Pfizer looks to refill its drugs pipeline and pivot away from its coronavirus (COVID-19) products, which have experienced a sharp fall in sales of late. Pfizer already has 24 approved cancer medicines, and 33 programmes in clinical development, and the acquisition of Seagen will see it add an additional four approved cancer therapies which had combined sales of nearly $2bn in 2022.
“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,” said Albert Bourla, chairman and chief executive of Pfizer. “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. Oncology continues to be the largest growth driver in global medicine, and this acquisition will enhance Pfizer’s position in this important space and contribute meaningfully to the achievement of Pfizer’s near- and long-term financial goals.”
“Pfizer shares our steadfast commitment to patients, and this combination is a testament to the passion, dedication and talent of the Seagen team to achieve our mission to discover, develop, and commercialize transformative cancer medicines that make a meaningful difference in people’s lives,” said David Epstein, chief executive of Seagen. “The proposed combination with Pfizer is the right next step for Seagen to further its strategy, and this compelling transaction will deliver significant and immediate value to our stockholders and provide new opportunities for our colleagues as part of a larger science-driven, patient-centric, global company.”
Many of the world’s largest pharmaceutical companies, including Pfizer, are sitting on significant cash piles and need to invigorate their pipelines of medicines, as key drugs go off patent before the end of the decade. Pfizer has been under pressure to do a big deal, after the company forecast that revenues would slump by a third to between $67bn to $71bn in 2023 owing to steep falls in sales of COVID-19 vaccines and treatments. In 2023, Seagen expects revenue of about $2.2bn, a 12 percent rise year on year. Pfizer believes that in 2030 Seagen could contribute more than $10bn in risk-adjusted revenues.