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Pfizer (PFE) to Buy Seagen for $43B, Boost Cancer Portfolio
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Pfizer(PFE - Free Report) has offered to buy cancer drugmaker, Seagen for $229 per share in cash, which adds up to a total enterprise value of approximately $43 billion.
Pfizer stock was up 1.2% on Monday after trading lower once the deal was announced. Investors believe Pfizer has paid quite a hefty premium for this “large” deal. Pfizer’s offer price of $229 is a 33% premium over Seagen’s Friday's closing price. Seagen was up 14.5% in response to the merger announcement.
In the past year, Pfizer’s stock has declined 23.7% against an increase of 1.6% for the industry.
Image Source: Zacks Investment Research
Seagen’s acquisition is expected to strengthen Pfizer’s portfolio of cancer drugs by adding a class of antibody-drug conjugates (ADCs). Seagen enjoys a leadership position in ADC technology, which is a relatively better way of targeting cancer cells without causing significant damage to the surrounding healthy tissues. The addition of Seagen should strengthen Pfizer’s already leading oncology portfolio of 24 approved innovative cancer medicines
Seagen currently markets four cancer drugs — Adcetris, Padcev, Tukysa and Tivdak. All these drugs have witnessed strong uptake so far, with Adcetris being the majority contributor to Seagen’s top line. The drug has been approved by the FDA for six cancer indications.
In 2022, Seagen recorded total revenues of approximately $2 billion, reflecting an almost 25% increase from 2021 results. In 2023, Seagen expects to generate approximately $2.2 billion of revenues.
Several studies on Adcetris, Padcev, Tukysa and Tivdak are currently underway for expanded indications in earlier lines of therapy,
The latest deal could help Pfizer recover some of the $17 billion in sales, which the company expects to lose due to the expiration of some of its patents in the 2025-2030 period. Pfizer is also seeing a significant decline in sales of its COVID-19 vaccine and treatment. Pfizer expects Seagen to contribute more than $10 billion in risk-adjusted revenues in 2030. The acquisition aligns with Pfizer’s strategic goal of adding $25 billion in revenues by the end of 2030 by developing its business.
There have been rumors about the buyout of Seagen by large drugmakers for some time now. Last month, a Wall Street Journal (WSJ) article mentioned that Pfizer might acquire Seagen and both companies have just initiated their rounds of negotiations. Last year, there were rumors that pharma giant Merck (MRK - Free Report) was in discussion with Seagen to buy the latter. Back then, a WSJ article mentioned that talks between Seagen and Merck have been underway for some time.
Seagen is collaborating with Merck, wherein the latter is co-funding the Tukysa global development plan.
Seagen and Merck are jointly developing ladiratuzumab vedotin, which is currently being evaluated in early-to-mid-stage studies both as monotherapy and in combination with other agents for treating metastatic breast cancer and other LIV-1-expressing solid tumors.
The Pfizer/Seagen transaction is expected to close in late 2023 or early 2024, pending approval by Seagen shareholders and regulatory authorities. Some analysts believe the Seagen–Pfizer merger should not face significant scrutiny by the Federal Trade Commission as there is no major overlap between their drugs. The boards of both the companies have already approved the transaction.
Zacks Rank
Pfizer currently has a Zacks Rank #5 (Strong Sell), while Seagen has a Zacks Rank of 3 (Hold).
Image: Bigstock
Pfizer (PFE) to Buy Seagen for $43B, Boost Cancer Portfolio
Pfizer (PFE - Free Report) has offered to buy cancer drugmaker, Seagen for $229 per share in cash, which adds up to a total enterprise value of approximately $43 billion.
Pfizer stock was up 1.2% on Monday after trading lower once the deal was announced. Investors believe Pfizer has paid quite a hefty premium for this “large” deal. Pfizer’s offer price of $229 is a 33% premium over Seagen’s Friday's closing price. Seagen was up 14.5% in response to the merger announcement.
In the past year, Pfizer’s stock has declined 23.7% against an increase of 1.6% for the industry.
Image Source: Zacks Investment Research
Seagen’s acquisition is expected to strengthen Pfizer’s portfolio of cancer drugs by adding a class of antibody-drug conjugates (ADCs). Seagen enjoys a leadership position in ADC technology, which is a relatively better way of targeting cancer cells without causing significant damage to the surrounding healthy tissues. The addition of Seagen should strengthen Pfizer’s already leading oncology portfolio of 24 approved innovative cancer medicines
Seagen currently markets four cancer drugs — Adcetris, Padcev, Tukysa and Tivdak. All these drugs have witnessed strong uptake so far, with Adcetris being the majority contributor to Seagen’s top line. The drug has been approved by the FDA for six cancer indications.
In 2022, Seagen recorded total revenues of approximately $2 billion, reflecting an almost 25% increase from 2021 results. In 2023, Seagen expects to generate approximately $2.2 billion of revenues.
Several studies on Adcetris, Padcev, Tukysa and Tivdak are currently underway for expanded indications in earlier lines of therapy,
The latest deal could help Pfizer recover some of the $17 billion in sales, which the company expects to lose due to the expiration of some of its patents in the 2025-2030 period. Pfizer is also seeing a significant decline in sales of its COVID-19 vaccine and treatment. Pfizer expects Seagen to contribute more than $10 billion in risk-adjusted revenues in 2030. The acquisition aligns with Pfizer’s strategic goal of adding $25 billion in revenues by the end of 2030 by developing its business.
There have been rumors about the buyout of Seagen by large drugmakers for some time now. Last month, a Wall Street Journal (WSJ) article mentioned that Pfizer might acquire Seagen and both companies have just initiated their rounds of negotiations. Last year, there were rumors that pharma giant Merck (MRK - Free Report) was in discussion with Seagen to buy the latter. Back then, a WSJ article mentioned that talks between Seagen and Merck have been underway for some time.
Seagen is collaborating with Merck, wherein the latter is co-funding the Tukysa global development plan.
Seagen and Merck are jointly developing ladiratuzumab vedotin, which is currently being evaluated in early-to-mid-stage studies both as monotherapy and in combination with other agents for treating metastatic breast cancer and other LIV-1-expressing solid tumors.
The Pfizer/Seagen transaction is expected to close in late 2023 or early 2024, pending approval by Seagen shareholders and regulatory authorities. Some analysts believe the Seagen–Pfizer merger should not face significant scrutiny by the Federal Trade Commission as there is no major overlap between their drugs. The boards of both the companies have already approved the transaction.
Zacks Rank
Pfizer currently has a Zacks Rank #5 (Strong Sell), while Seagen has a Zacks Rank of 3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.