Pfizer buys Seagen for $43 billion, expanding access to cancer drugs

Pfizer will spend $43 billion to buy Seagen and expand its cancer treatment business.

The pharmaceutical giant said Monday it would pay $229 in cash for each Seagen share.

Seagen Inc., based in Bothell, Wash., is a biotech drug developer specializing in antibody-drug conjugate, or ADC, technology. Its key products use lab-made proteins called monoclonal antibodies that seek out cancer cells to help deliver drugs to kill the cancer while sparing the surrounding healthy tissue.

The deal announced Monday will combine Seagen’s technology with Pfizer’s scale and strength, Pfizer CEO Albert Burla said in a statement.

Pfizer’s oncology unit generated $12 billion in revenue last year and already includes prostate cancer treatment and breast cancer treatment Ibrance.

Seagen, which changed its name from Seattle Genetics in 2020, grew total revenue by about 25% to nearly $2 billion last year. Last year, the company cut its losses to $610 million. That’s down from $674 million in 2021.

Seagen’s best-selling product, Adcetris, treats cancers of the lymphatic system. Last year, sales totaled $839 million, a 19% year-over-year increase.

In addition to Adcetris, Seagen also has a deal with Pfizer’s Array BioPharma to develop, manufacture and sell Tukysa for the treatment of breast cancer and colorectal cancer. It brought in $353 million in sales last year.

Seagen also reported a 33% increase in sales to $451 million last year for Padcev, which treats certain types of urinary tract cancer, including bladder. The drug manufacturer develops and markets this treatment together with Astellas Pharma Inc.

Seagen expects to generate about $2.2 billion in revenue this year. This would mean an increase of 12%.

Pfizer generated about $100 billion in total revenue last year and was flush with cash thanks to sales of its COVID-19 vaccine and treatments Comirnaty and Paxlovid.

Burla said earlier this year that the company plans to use its “extraordinary firepower” to buy products that will generate $25 billion in additional revenue by 2030.

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 anemia maker Global Blood Therapeutics and bought Arena Pharmaceuticals for another $6.7 billion.

Burla said in January that Pfizer plans to launch 19 new products or new indications for existing products over the next year and a half.

The drugmaker needs additional sources of revenue in part because patents protecting drugs like Ibrance from cheaper competition are set to expire in the coming years.

Pfizer said Monday it will pay for the deal mostly with $31 billion in new long-term debt.

The boards of both companies unanimously approved the deal. But regulators still have to review it, and Seagen shareholders will have to approve it.

The companies expect to close the deal in late 2023 or early 2024.

Shares of Pfizer fell about 2% to $38.55 before markets opened on Monday, while shares of Seagen jumped nearly 20% to $206.40.