Pfizer’s $43B Seagen acquisition doubles early-stage oncology clinical pipeline

Testing cancer Pfizer

Pfizer Inc. is set to acquire Seagen Inc. for $229 in cash per Seagen share for a total enterprise value of $43 billion.

Seagen is a global biotechnology company that discovers, develops and commercializes cancer medicines. The boards of directors of both companies have unanimously approved the transaction.

“Pfizer is deploying its financial resources to advance the battle against cancer, a leading cause of death worldwide with a significant impact on public health,” said Albert Bourla, Pfizer chairman and chief executive officer. 

“Together, Pfizer and Seagen seek to accelerate the next generation of cancer breakthroughs and bring new solutions to patients by combining the power of Seagen’s antibody-drug conjugate (ADC) technology with the scale and strength of Pfizer’s capabilities and expertise. Oncology continues to be the largest growth driver in global medicine, and this acquisition will enhance Pfizer’s position in this important space and contribute meaningfully to the achievement of Pfizer’s near and long-term financial goals.”

Pfizer eyes Seagen growth

Seagen expects to generate approximately $2.2 billion of revenue in 2023, representing 12% year-over-year growth, from its four in-line medicines, royalties and collaboration and license agreements. When combining the expected strong growth trajectories for these medicines with candidates that could emerge from Seagen’s pipeline, subject to clinical trial and regulatory success, Pfizer believes following the acquisition, Seagen could contribute more than $10 billion in risk-adjusted revenues in 2030, with potential significant growth beyond 2030.

Four of the 12 total FDA-approved and marketed ADCs use Seagen’s technology. ADCs are emerging as a powerful tool across a broad range of cancers designed to preferentially kill cancer cells and limit off-target toxicities. 

Seagen’s portfolio includes four approved medicines that are first- or best-in-class in their respective indications across solid tumors and hematologic malignancies, including three ADCs: ADCETRIS (brentuximab vedotin), PADCEV (enfortumab vedotin), and TIVDAK (tisotumab vedotin). The company also commercializes TUKYSA (tucatinib). Clinical development programs are ongoing for each of these medicines for potential new tumor types or expanded indications in earlier lines of therapy, with catalysts expected annually through 2027.

Seagen is also poised to expand the impact of its therapeutic approach with its broad and deep pipeline that includes 11 new molecular entities, many with the potential to treat large patient populations and all with global commercial rights. 

Seagen is also advancing innovative technologies capable of potentially generating multiple investigational new drug applications (INDs)​, including next-generation linker/payload technologies for ADCs and other antibody platforms that directly engage the immune system to destroy tumors, such as bi-specific antibodies.

“Pfizer shares our steadfast commitment to patients, and this combination is a testament to the passion, dedication and talent of the Seagen team to achieve our mission to discover, develop, and commercialize transformative cancer medicines that make a meaningful difference in people’s lives,” said David Epstein, Seagen chief executive officer. 

“The proposed combination with Pfizer is the right next step for Seagen to further its strategy, and this compelling transaction will deliver significant and immediate value to our stockholders and provide new opportunities for our colleagues as part of a larger science-driven, patient-centric, global company.”

Pfizer has 24 approved cancer medicines

Today, Pfizer Oncology has a portfolio of 24 approved cancer medicines that generated $12.1 billion in 2022 revenues, including the best-selling therapies for metastatic breast cancer and prostate cancer. Pfizer’s in-line portfolio is focused on four broad, key areas: breast cancer, genitourinary cancer, hematology and precision medicine, complemented by a pipeline of 33 programs in clinical development. The proposed combination with Seagen would double Pfizer’s early-stage oncology clinical pipeline.

“Over the past decade we’ve taken bold new approaches to translating scientific research into effective medicines for people living with cancer, and we have pioneered several breakthroughs in breast cancer, genitourinary cancer, hematological malignancies and precision medicine,” said Chris Boshoff, chief development officer Oncology and Rare Disease, Pfizer. 

“The addition of Seagen’s world-leading ADC technology will position us at the forefront of innovative cancer care, and strongly complements our existing portfolio across both solid tumors and hematologic malignancies. We believe the combination of our teams, and respective areas of strength and global footprints will allow us to realize Seagen’s potential and advance even more potential breakthroughs to patients with cancer.”

Pfizer expects to finance the transaction substantially through $31 billion of new, long-term debt, and the balance from a combination of short-term financing and existing cash. The transaction is expected to be neutral to slightly accretive to adjusted diluted earnings per share (EPS) in the third to fourth full year post close. Pfizer expects to achieve nearly $1 billion in cost efficiencies in the third full year after the completion of the transaction.

Pfizer told Labiotech that the company is committed to retaining and potentially growing the Seagen presence in Seattle and San Francisco.

“Retention of key talent is critical to the success of this transaction,” a company statement said.

The companies expect to complete the transaction in late 2023 or early 2024, subject to fulfillment of customary closing conditions, including approval of Seagen’s stockholders and receipt of required regulatory approvals.

Pfizer deal comments

Ross Youngs, CEO and founder of U.S. biotech company Biosortia Microbiomics, said of the deal: “Pfizer’s purchase of Seagen continues the pathway large pharma companies have taken for years: to pay high for innovation that delivers results. This should provide a great deal of incentive and security to early and new technology discovery stage companies and their funding sources that the risk-reward ratio justifies an aggressive search for breakthrough technologies.”

According to Deborah Minor, who has led Drug Discovery Alliances, which provides sourcing, procurement, and services, since 2001, “Consolidation will continue in the biotech sector in 2023. Consolidation is driven by larger pharma companies snapping up smaller players to access new therapies recently approved by the FDA or in clinical development. The good news is the acquiring company will be able to provide additional funding to move the asset from clinical development to commercialization. But be aware! In some cases, new ownership could mean a change in the current supply chain to include the new owner’s preferred manufacturers. Keeping this in mind, always do your research to avoid costly delays and unplanned expenses.”

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