Pfizer and Seagen announced today that they entered into an agreement under which Pfizer acquires Seagen for $43 billion.
The price of the acquisition comes to $229 in cash per Seagen share, totaling $43 billion. Both companies’ boards unanimously approved the transaction.
Seagen develops antibody-drug conjugate (ADC) technology. Four of the 12 total FDA-approved and marketed ADCs use its technology industry-wide, according to a news release.
“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 Dr. Albert Bourla, Pfizer chair and CEO. “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.”
Seagen’s portfolio includes Adcetris, Padcev and Tivdak, all approved medicines for indications across solid tumors and hematologic malignancies. It also commercializes Tukysa. The company has ongoing clinical development programs for each of these medicines for potential new tumor types or expanded indications in earlier lines of therapy.
Bothell, Washington-based Seagen expects revenues totaling approximately $2.2 billion in 2023. That marks 12% year-over-year growth. Pfizer believes Seagen could contribute more than $10 billion in risk-adjusted revenues in 2030. It also anticipates potential significant growth beyond 2030.
“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,” said Seagen CEO David Epstein.
How Pfizer plans to pay
Pfizer expects to finance the deal through $31 billion in new, long-term debt, plus the balance from a combination of short-term financing and existing cash. The company expects a neutral to slightly accretive impact to adjusted EPS in the third to fourth full year post-close. Pfizer said it projects nearly $1 billion in cost efficiencies in the third full year after the completion of the transaction.
Both companies expect to complete the transaction in late 2023 or early 2024. It remains subject to the fulfillment of customary closing conditions. That includes approval of Seagen’s stockholders, plus receipt of required regulatory approvals.
Pfizer’s financial advisor for the transaction is Guggenheim Securities, LLC, with Wachtell, Lipton, Rosen & Katz acting as Pfizer’s legal advisor. Centerview Partners LLC is serving as Seagen’s financial advisor and provided a fairness opinion to Seagen’s Board of Directors with Sullivan & Cromwell LLP serving as its legal advisor. MTS Health Partners also provided financial advice to Seagen.
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