Pfizer looks past COVID with $43 bln deal for cancer drug maker Seagen

March 13 (Reuters) – Pfizer (PFE.N) said Monday to buy Siegen (SGEN.O) and its targeted cancer drugs as it prepares for a plunge in COVID-19 sales and generic competition. signed a $43 billion deal to Some hot selling drugs.

Seagen is Pfizer’s largest acquisition in a string of recent acquisitions that capitalized on once-in-a-lifetime cash windfalls from COVID-19 vaccines and treatments. With the addition of his four approved cancer drugs, they will reach nearly $2 billion in combined sales by 2022.

Washington-based Seagen is a pioneer of antibody-drug conjugates that act like “guided missiles” designed to destroy cancer while sparing healthy cells.

Seagen’s shares rose more than 16% to $200.93 on Monday, well below Pfizer’s asking price of $229, signaling investor concerns over possible lengthy antitrust reviews. Pfizer’s stock price he rose nearly 3%.

Pfizer’s bid represents a 32.7% premium to Seagen’s closing price on Friday.

“Federal Trade Commission (FTC) approval is kind of an open question at this point,” said Needham & Co analyst Ami Fadia, adding that bladder cancer is an area the FTC could investigate. We noted overlap in treatment.

However, Fadia said the chances of the FTC challenging the deal in court are less than 50%.

Pfizer acknowledged in a conference call to discuss the planned acquisition that antitrust regulators are likely to scrutinize the deal due to its size, although the two companies will likely release in late 2023 or early 2024. It said it expects to be able to complete the transaction by

Competitive Protection, Regulators

Chief Executive Albert Bourra said on a conference call that the Siegen acquisition would help Pfizer move into an area that is “more protected from regulatory and patent perspectives and market dynamics.”

Seagen will benefit from out-of-pocket medical cost caps for older Americans under President Joe Biden’s Inflation Reduction Act (IRA), Bourla said. That means more patients will get access to the company’s expensive treatments.

A focus on complex biotech drugs will give them longer market exclusivity than pills before they are subject to government price restrictions under the IRA, he said. The U.S. Medicare program will be allowed to negotiate drug prices for the first time, with new prices for his first 10 drugs selected from 2026.

Also, Seagen’s drug complexity may make it more difficult for competitors to develop cheaper biosimilar versions, prolonging profitability.

The latest deal comes as Pfizer seeks to cushion a hit to its expected $17 billion in revenue by 2030 from patent expiring on top drugs and declining demand for its COVID products.

Pfizer’s COVID vaccine and oral antiviral Paxlovid, which it shares with BioNTech (22UAy.DE), will bring in more than $90 billion in sales by 2022.

The New York-based pharmaceutical company said the Seagen deal and other recent acquisitions could bring total sales to over $20 billion in 2030.

Pfizer’s recent deals include the $5.4 billion acquisition of Global Blood Therapeutics, the $11.6 billion acquisition of migraine drug maker Biohaven Pharmaceutical Holdings, and the $6.7 billion acquisition of pharmaceutical company Arena Pharmaceuticals. will be

Pfizer’s oncology portfolio already has 24 approved therapies. The Siegen acquisition adds lymphoma drug ADCETRIS, bladder cancer drug Padocef, cervical cancer drug Tivdak, and breast cancer drug Tuxa.

Pfizer rivals Merck (MRK.N) and Siegen were in talks last year before bankruptcy, according to multiple reports.

Reporting by Manas Mishra, Bhanvi Satija, Bangalore, and Michael Erman, New York. Edited by Saumyadeb Chakrabarty, Sriraj Kalluvila and Bill Berkrot

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