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Pfizer is spending about $43 billion to delve into new cancer treatments that target tumor cells while sparing healthy tissues.
The pharmaceutical giant said Monday it will pay $229 in cash for each share of Seagen Inc. Pfizer then plans to let the biotech drugmaker “continue to innovate,” except with more resources than it would have alone, Pfizer Chairman and CEO Albert Bourla told analysts. .
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“We don’t buy golden eggs,” he said. “We’re getting the goose that laid the golden eggs.”
Bothell, Washington-based Seagen Inc. specializes in working with antibody-drug conjugate, or ADC, technology. Its key products use lab-made proteins called monoclonal antibodies that target cancer cells to help deliver cancer-fighting drugs while sparing surrounding tissue.
Cancer treatments are important for Pfizer. They brought in $12 billion in revenue for drug dealers last year. But Pfizer has marketed a couple of first-in-class ADC treatments, a spokeswoman said.
Seagen has four treatments on the market. It also has a pipeline under development that includes potential treatments for a form of lung cancer and advanced breast cancer.
“We think this really changes Pfizer’s oncology discovery, making it one of a kind,” Bourla said.
Seagen’s top seller, Adcetris, treats systemic cancers. It brought in $839 million in sales last year, a 19 percent increase over the previous year.
Seagen also has an agreement with Pfizer’s Array BioPharma to develop, manufacture and sell the breast and colorectal cancer treatment Tukysa. It brought in $353 million in sales for Seagen last year.
The company, which changed its name from Seattle Genetics in 2020, saw total revenue grow about 25 percent last year to nearly $2 billion. Seagen also widened its loss to $610 million from $674 million in 2021.
The drugmaker predicts about $2.2 billion in sales for this year.
Pfizer posted about $100 billion in total revenue last year and is flush with cash thanks to sales of its COVID-19 vaccine and treatment, Comirnaty and Paxlovid.
Bourla said earlier this year that the company plans to use “enormous firepower” to buy products that will generate $25 billion in additional revenue by 2030.
The deal announced Monday and some previous acquisitions will help Pfizer account for much of that. But Bourla insisted on Monday that the company expects Seagen’s contributions to extend beyond the end of the decade.
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New York-based Pfizer Inc has already spent $11.6 billion on migraine treatment maker Biohaven Pharmaceutical. It also spent $5.4 billion on stem cell treatment maker Global Cancer Treatments and bought Arena Pharmaceuticals for another $6.7 billion.
The drugmaker needs more revenue sources in part because it faces the expiration of patents for drugs like its breast cancer treatment Ibrance from cheaper competition in the coming years.
Pfizer said Monday that it will pay for Seagen mostly through $31 billion in long-term debt.
Both company boards have unanimously approved the deal. But regulators still need to look, and Seagen’s shareholders will have to approve it.
The companies expect to complete the transaction in late 2023 or early 2024.
Shares of Pfizer rose two percent to $40.26 after markets opened on Monday, while Seagen’s stock grew more than 15 percent to nearly $200. The broad index has a slightly upturned edge.
© 2023 The Canadian Press
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