Pfizer has struck a $43bn deal for cancer therapy specialist Seagen as the company prepares to contend with a steep drop in COVID-19 product sales and fierce competition for some of its top sellers. Seagen is a pioneer of antibody-drug conjugates, which operate like a “guided missile” designed for a targeted destructive effect and spares healthy cells. The deal will add four approved cancer therapies with combined sales of nearly $2bn in 2022. Washington-based Seagen will benefit from out-of-pocket healthcare spending caps for seniors under President Joe Biden’s Inflation Reduction Act. The deal will help Pfizer move into an area “that it is more protected from regulators, patent perspectives and market dynamics,” according to CEO Albert Bourla.
Pfizer expects to mitigate an anticipated $17bn revenue hit by 2030 from patent expirations for the company’s top drugs and the decline in demand for its COVID-19 treatments. The drug manufacturer forecasts turnover of more than $10bn from Seagen’s products in 2030, and a further $15bn from other recent acquisitions. Pfizer will pay $229 in cash per Seagen share, reflecting a 32.7% premium on Friday’s closing price. Seagen’s shares rose to $200 in early trading.
Pfizer’s portfolio of oncology therapies features 24 approved drugs. Seagen’s approved treatments include Adcetris for lymphoma, Padcev for bladder cancer, Tivdak for cervical cancer and breast cancer treatment Tukysa. The companies hope to complete the deal in late 2023 or early 2024. Pfizer has already acquired Global Blood Therapeutics for $5.4bn, migraine drug maker Biohaven Pharmaceutical Holding for $11.6bn and drug developer Arena Pharmaceuticals for $6.7bn.
The Pfizer-Seagen deal comes after Seagen’s talks with Pfizer competitor Merck & Co reportedly fell apart last year over antitrust concerns. Pfizer warned the size of the deal could trigger a close antitrust review by regulators, but expects it to be approved.