Pfizer Agrees to Buy Cancer Drug Maker Seagen for $43 Billion

Deal will depend on U.S. antitrust review


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Pfizer Inc.  agreed to acquire cancer treatment company Seagen Inc. for $43 billion as it looks to incorporate cancer treatments into its products, creating a company with a combined market value of more than $260 billion.

Key Takeaways

  • Pfizer agreed to acquire cancer drug maker Seagen for $43 billion.
  • Merck & Co. had previously tried to buy Seagen, which is worth more than $30 billion, but the deal fell through.
  • Pfizer is looking to expand its product offerings to offset losses after some of its patents expire in 2030.

The biggest obstacle to completing the deal may be winning approval from U.S. antitrust regulators, according to the Wall Street Journal.

If allowed to proceed, the deal would be among the largest in months, combining Seagen, with a market value of more than $30 billion, with Pfizer, worth $229 billion. Pfizer's sales grew to more than $100 billion in 2022, boosted by the pandemic demand for its Covid vaccine and other drugs. Pfizer will pay $229 in cash per Seagen share, a 32.7% premium to Friday’s closing price, according to CNBC.

The Biden administration has shown that it will pay close attention to proposed health care mergers and has said it would block mergers that may suppress competition and lead to higher costs for drugs. Lowering insulin prices, for example, has been a priority of the Biden administration since President Joe Biden took office.

Merck was in talks to acquire Seagen in 2022, but the deal, which would have been worth more than $40 billion, fell through after the two companies failed to reach an agreement. At the same time, Pfizer was looking to buy Seagen, according to the Wall Street Journal. 

The deal would be the latest in a string of acquisitions for Pfizer, which is preparing to offset a potential $17 billion in lost sales after some of its patents expire by 2030. Pfizer made at least $22.7 billion from sales of coronavirus vaccines and other drugs, and is looking to use that profit to expand its reach. Four new cancer drugs would be incorporated into Pfizer's, with combined sales of the drugs topping $2 billion in 2022.

Pfizer acquired Global Blood Therapeutics Inc., a sickle-cell drug maker, for more than $5 billion, and a portion of Biohaven Pharmaceutical Holdings Co. for more than $10 billion. 

Seagen has worked on developing a therapy called antibody drug conjugates that uses anticancer agents to attack tumor cells. It has been approved for use in cases of lymphomas, and has been shown to work successfully in tandem with immunotherapies for treating other forms of cancer, including breast cancer. 

The deal has the potential to boost Pfizer's earnings breast cancer treatments. The company already has a drug called Ibrance treating the condition, and the potential for Seagen’s treatment to work in tandem with others could give Pfizer full ownership over a string of breast cancer treatments. 

Article Sources
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  1. Wall Street Journal, "Pfizer in Talks to Acquire Seagen in Deal Likely Valued at More Than $30 Billion."
  2. CNBC, "The Covid pandemic drives Pfizer’s 2022 revenue to a record $100 billion."
  3. CNBC, "Pfizer looks beyond Covid sales with $43 billion deal for cancer drugmaker Seagen."

  4. The White House, "FACT SHEET: Executive Order on Promoting Competition in the American Economy."
  5. FiercePharma, "Merck and Seagen can't agree on a price for their rumored merger: Bloomberg."
  6. CNBC, "Pfizer looks beyond Covid sales with $43 billion deal for cancer drugmaker Seagen."
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