AP
- Pfizer is betting big on cancer treatments.
- On Monday, the company said that it was acquiring Seagen in a $43 billion deal.
- Seagen sells four cancer drugs and is expected to bring in $2.2 billion in revenue this year.
Pfizer is betting big on cancer treatments.
The pharmaceutical giant announced on Monday that it would acquire cancer drug developer Seagen, which specializes in a new kind of drug technology that can home in on tumors.
Pfizer is offering $229 per share for Seagen, and the deal has a total value of $43 billion. Seagen's stock jumped 15% to $198.21 in Monday morning trading.
Seagen already has four cancer treatments on the market. Its focus has been in ADC technology, or antibody-drug conjugate technology, a treatment that uses antibodies to deliver treatments directly to tumors. Seagen is expected to bring in $2.2 billion in revenue this year, and Pfizer said that figure could reach $10 billion in 2030.
After the potential for a deal was first reported by the Wall Street Journal last month, SVB analysts said the deal would help Pfizer offset declining revenues from sales of coronavirus vaccines and treatments and help the company add fresh products to its oncology portfolio, which includes treatments that are expected to lose patent protection in the coming years.
"Seagen would bring substantial revenue and future growth to Pfizer's oncology franchise," the SVB analysts wrote.
They said that in 2030, Seagen could bring in $11 billion in sales. That could help to boost Pfizer's cancer portfolio, which is expected to bring in $12.5 billion in 2024 or around 17% of the company's total sales, according to SVB.
Pfizer said that the deal would double the number of early-stage cancer treatments that the company is testing.
"The addition of Seagen's world-leading ADC technology will position us at the forefront of innovative cancer care, and strongly complements our existing portfolio across both solid tumors and hematologic malignancies," Chris Boshoff, Pfizer's chief development officer for oncology and rare disease, said in a statement.
The deal is expected to close in late 2023 or early 2024, according to the companies.