File photo: A man walks by Pfizer headquarters, Friday, Feb. 5, 2021, in New York. Pfizer will spend about $43 billion to buy Seagen and broaden its reach into cancer treatments, the pharmaceutical giant said Monday, March 13, 2023. AP
The pharmaceutical giant said Monday it will pay $229 in cash for each share of Seagen Inc. Pfizer then plans to let the biotech drug developer “continue innovating,” except with more resources than it would have alone, Pfizer Chairman and CEO Albert Bourla told analysts.
“We are not buying the golden eggs,” he said. “We are acquiring the goose that is laying 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 seek out cancer cells to help deliver a cancer-killing drug while sparing surrounding tissue.
Cancer treatments are a priority for Pfizer. They brought in $12 billion in revenue for the drugmaker last year. But Pfizer has only marketed a couple first-generation ADC treatments, a spokeswoman said.
Seagen has four treatments on the market. It also has a pipeline of drugs under development that includes potential treatments for a form of lung cancer and advanced breast cancer.
“We think this really changes dramatically the oncology presence of Pfizer, makes it one of a kind," Bourla said.
Seagen’s top seller, Adcetris, treats lymph system cancers. It brought in $839 million in sales last year, a 19 percent increase over the previous year.
Seagen also has a deal with Pfizer’s Array BioPharma to develop, make 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 shaved its loss to $610 million from $674 million in 2021.
The drug developer predicts about $2.2 billion in sales for this year.
Pfizer booked about $100 billion in total revenue last year and has been flush with cash thanks to sales of its COVID-19 vaccine and treatment, Comirnaty and Paxlovid.
Bourla said earlier this year that the company planned to use its “extraordinary firepower” to buy products that will deliver $25 billion in incremental revenue by 2030.
The deal announced Monday and some previous acquisitions will help Pfizer account for most of that. But Bourla emphasized on Monday that the company expects Seagen's contributions to extend beyond the end of the decade.
New York-based Pfizer Inc. has already spent $11.6 billion on migraine treatment developer Biohaven Pharmaceutical. It also spent $5.4 billion on sickle cell disease treatment maker Global Blood Therapeutics and bought Arena Pharmaceuticals for another $6.7 billion.
The drugmaker needs more revenue sources in part because it faces the expiration of patents protecting drugs like its breast cancer treatment Ibrance from cheaper competition in the coming years.
Pfizer said Monday it will pay for Seagen mostly through $31 billion in new, long-term debt.
Both companies' boards have unanimously approved the deal. But regulators still need to look at it, and Seagen shareholders will have to approve it.
The companies expect to complete the transaction in late 2023 or early 2024.
Shares of Pfizer rose 2 percent to $40.26 after markets opened Monday, while Seagen's stock soared more than 15 percent to nearly $200. Broader indexes edged up slightly.