Pfizer will spend $43 billion to buy Seagen and deepen its reach into treating cancer.
The pharmaceutical giant said Monday that it will pay $229 per Seagen share.
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," Pfizer Chairman and CEO Dr Albert Bourla said in a statement.
Bothell, Washington-based Seagen Inc. is a biotech drug developer. Its key products use monoclonal antibodies that bind to the surface of a tumour cell to deliver a cancer-killing agent while sparing surrounding healthy tissue.
Monoclonal antibodies are lab-made proteins delivered mostly by IV at an infusion center, according to the Cleveland Clinic.
Seagen's top seller, Adcetris, treats lymph system cancers. It brought in $839 million in sales last year, a 19 per cent increase over the previous year.
Aside from Adcetris, 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 last year.
Seagen also saw sales grow 33 per cent to $451 million last year for Padcev, which treats some cancers of the urinary tract, including the bladder. The drugmaker is developing and selling that treatment with Astellas Pharma Inc.
Seagen anticipates generating approximately $2.2 billion of revenue this year, representing 12 per cent year-over-year growth, from its four in-line medicines, royalties and collaboration and license agreements.
Pfizer believes Seagen could contribute more than $10 billion in risk-adjusted revenues in 2030, with potential significant growth beyond 2030.
Seagen, which changed its name from Seattle Genetics in 2020, shaved its loss to $610 million last year. That's down from $674 million in 2021. Total revenue grew about 25 per cent last year to nearly $2 billion.
The company named former Novartis executive David Epstein CEO in November. Long-time CEO and co-founder Clay Siegall resigned last spring.
Cancer treatments are one of Pfizer's main businesses. That portfolio of drugs includes the breast cancer treatment Ibrance, which brought in nearly $1.3 billion in sales last year.
Pfizer recorded 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.
CEO Albert 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.
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.
Bourla 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 more revenue sources in part because it faces the expiration of patents protecting drugs like Ibrance from cheaper competition in the coming years.
Both companies' boards have unanimously approved the deal. The companies expect to complete the transaction in late 2023 or early 2024. It still needs approval from Seagen's stockholders.
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