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Tribune News Service
Tribune News Service
Business
Naomi Kresge

Pfizer to buy cancer drugmaker Seagen in $43 billion deal

Pfizer Inc. agreed to purchase cancer-drug maker Seagen Inc. for an enterprise value of $43 billion, gaining the company’s antibody drugs that fight tumors.

Pfizer will pay $229 a share in cash for Seagen, according a statement Monday, about a third more than the drugmaker’s closing share price Friday.

Seagen is a leader in developing a type of medicine called antibody-drug conjugates, or ADCs. These precision medicines deliver cancer-killing drugs so potent they might otherwise be too toxic to use. The new delivery mechanism uses antibodies to deposit a strong concentration of drug directly at a tumor site, which may increase efficacy with fewer side effects.

Pfizer has been under pressure to show it can capitalize on its Covid-19 windfall, after vaccine revenue almost doubled its sales in a single year. While the Seagen deal is smaller than some of Pfizer’s megadeals of the past, it’s a bid for an expanded platform in a field, oncology, that will be the industry’s biggest growth market, Chief Executive Officer Albert Bourla said Monday.

The acquisition caps months of takeover speculation for Seagen after Merck & Co. targeted the company last year. Talks with Merck stalled over price, according to people familiar with the matter. Suitors saw the potential for a takeover after the resignation of Seagen’s co-founder and former CEO, Clay Siegall, who had opposed a sale, people familiar with the matter said.

Deal premium

“This development adds a potentially closing chapter to the events over the last year,” Gregory Renza, a New York-based analyst with RBC Capital Markets LLC, wrote in a note to investors. The premium Pfizer is paying validates Seagen’s ADC platform, Renza said.

Pfizer expects to finance the purchase substantially through $31 billion of new, long-term debt, and the balance from a combination of short-term financing and existing cash, according to the statement. Seagen is expected to contribute more than $10 billion in risk-adjusted revenue by 2030.

The deal will double Pfizer’s pipeline of early-stage experimental cancer therapies, the company said.

Seagen shares rose 18% in premarket trading Monday morning, while Pfizer was 2% lower.

Through Friday’s close, Seagen had gained 34% since the year began, giving the company a market value of about $32.2 billion.

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