US pharmaceutical giant Pfizer has announced a deal to buy biotech firm Seagen, which specialises in innovative cancer treatment, for $US43 billion ($A64.6 billion).
Pfizer is offering $US229 ($344) per share in cash, and the companies expect to complete the transaction later this year or in early 2024, they said in a statement.
“Pfizer is deploying its financial resources to advance the battle against cancer,” Pfizer chief executive Albert Bourla said.
“Oncology continues to be the largest growth driver in global medicine, and this acquisition will enhance Pfizer’s position in this important space.”
Seagen, a leader in the research, development and commercialisation of cancer treatments, is growing, with a 12 per cent increase in revenue forecast this year to $US2.2 billion ($A3.3 billion).
The company, headquartered in Washington state, came to major drugmakers’ attention with its work on antibody-drug conjugates (ADCs) that are “designed to preferentially kill cancer cells”.
Speaking to CNBC, Dr Bourla said cancer was “one of the biggest therapeutic areas”.
“Right now, one in three people in the world are going to have cancer in their lifetime,” he said.
He described Seagen’s ADCs as “one of the greatest technologies to battle cancer”.
“These are turbocharged, guided missiles but they are attacking the cancer cells and can make a huge difference,” he said.
“I would say this is something like the mRNA for vaccines; this is for cancer. We think we can make a very big difference with this technology in our hands and provide relief to the world at a scale that has not been seen before from this devastating disease.”
The agreement has been approved by the boards of both firms, and will be subject to regulatory and shareholder approvals.
A deal would have to pass heightened scrutiny from antitrust regulators. The US Biden administration has also been seeking to keep down drug prices.
Pfizer expects to finance the deal through $US31 billion ($A46.6 billion) of new long-term debt and a “combination of short-term financing and existing cash”.
For now, Pfizer Oncology has a portfolio of 24 approved innovative cancer medicines that generated $US12.1 billion ($A18.2 billion) in 2022, it said.
The deal with Seagen would double Pfizer’s early-stage oncology clinical pipeline, the pharmaceutical firm added.
“The addition of Seagen’s world-leading ADC technology will position us at the forefront of innovative cancer care,” Pfizer’s chief development officer of oncology and rare disease Chris Boshoff said.
Seagen CEO David Epstein added that “the proposed combination with Pfizer is the right next step for Seagen to further its strategy”.
According to reports, Pfizer competitor Merck was also in talks with Seagen previously but these did not go through.
Pfizer expects that Seagen may contribute more than $US10 billion ($A15 billion) in risk-adjusted revenues in 2030, “with potential significant growth beyond 2030”, the company said.
Seagen’s portfolio includes three products with ADCs, including Padcev, which is used for the treatment of urothelial cancer.
The US Food and Drug Administration is looking into combining Padcev with Merck’s Keytruda in treating patients with advanced bladder cancer who are not eligible for chemotherapy.