To expand its cancer treatment capabilities, Pfizer will invest $43 billion to acquire Seagen.
Earlier this week, the pharmaceutical behemoth announced it would buy each Seagen share for $229 in cash.
Located in Bothell, Washington, Seagen Inc. is a biotech, pharmaceutical company focusing on antibody-drug conjugate, or ADC, technology.
Its main products employ lab-made proteins called monoclonal antibodies to deliver a cancer-curing medicine to cancer cells while sparing surrounding healthy tissue.
In a statement, Pfizer CEO Albert Bourla said that the purchase announced on Monday would combine Seagen’s technology with Pfizer’s size and strength.
Pfizer’s oncology division, which already offers Ibrance for breast cancer and therapies for prostate cancer, generated $12 billion in revenue last year.
The entire income of Seagen, which changed its name from Seattle Genetics in 2020, increased by around 25% to close to $2 billion last year.
Last year, the business reduced its loss to $610 million. This is less than the $674 million in 2021.
Adcetris, Seagen’s best-selling drug, addresses lymph system malignancies. Last year, it made $839 million in sales, a 19% rise from the year before.
With Adcetris, Seagen has a contract with Pfizer’s Array BioPharma to develop, produce, and market the colorectal and breast cancer medication Tukysa. Sales totaled $353 million for it in the previous year.
Sales of Padcev, a drug that treats various urinary tract diseases, including bladder cancer, increased by 33% to $451 million at Seagen last year.
Along with Astellas Pharma Inc., the drugmaker creates and markets that medication.
Seagen expects to bring in about $2.2 billion in sales this year. That would be a 12% increase.
Because of the success of its COVID-19 vaccine and treatment, Comirnaty and Paxlovid, Pfizer generated an estimated $100 billion in total revenue last year and has plenty of cash on hand.
Earlier this year, Bourla stated that the business intended to use its “exceptional firepower” to purchase goods that will generate $25 billion in additional income by 2030.
Pfizer Inc., based in New York, has previously invested $11.6 billion in Biohaven Pharmaceutical, a company that develops migraine medications.
Moreover, it invested $5.4 billion in Global Blood Therapeutics, a manufacturer of medications for sickle cell disease, and another $6.7 billion in Arena Pharmaceuticals.
Pfizer intends to introduce 19 new medications or new indications for 19 currently available products during the next 15 months, according to Bourla’s January statement.
The need for other revenue sources stems partly from the fact that in the upcoming years, the patents defending treatments like Ibrance from the less expensive competition will expire.
Pfizer announced on Monday that it would primarily finance the transaction with $31 billion in new, long-term debt.
Boards from both firms have unanimously endorsed the agreement. Regulators must still review it, though, and Seagen shareholders must consent.
The deal is anticipated to be finished by the companies in late 2023 or early 2024.
Before Monday’s market opening, Pfizer shares decreased by around 2% to $38.55, while Seagen’s stock increased by about 20% to $206.40.
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