Pfizer buys Seaagen for $43 billion, increasing access to cancer drugs

Pfizer is spending about $43 billion to go deeper into new cancer treatments that target tumor cells while sparing the surrounding healthy tissue.

The pharmaceutical giant said Monday it would pay $229 cash for every share of Seagen Inc. Pfizer then plans to let biotech drug developers “keep innovating,” except with more resources than they would otherwise have on their own, Pfizer Chairman and CEO Albert Bourla told analysts.

“We don't buy golden eggs,” he said. “We got the goose that lays the golden eggs.”

Bothell, Seagen Inc. the Washington-based company specializes in working with drug-antibody conjugation technology, or ADC. Its main product uses laboratory-made proteins called monoclonal antibodies that seek out cancer cells to help deliver cancer-killing drugs while saving surrounding tissue.

Cancer treatment is a priority for Pfizer. They generated $12 billion in revenue for the drug maker last year. But Pfizer is only marketing some of its first-generation ADC treatments, a spokesperson said.

Seaagen has four treatments on the market. It also has a drug pipeline under development that includes potential treatments for advanced forms of lung cancer and breast cancer.

“We think this really changes Pfizer's oncology presence dramatically, making it one of a kind,” said Bourla.

Seagen's top seller, Adcetris, treats cancer of the lymph system. It generated $839 million in sales last year, a 19% increase from the previous year.

Seagen also has an agreement with Pfizer's Array BioPharma to develop, manufacture and sell Tukysa breast and colorectal cancer treatment. That generated $353 million in sales for Seaagen last year.

The company, which changed its name from Seattle Genetics in 2020, saw total revenue grow about 25% last year to nearly $2 billion. Seaagen also cut its losses to $610 million from $674 million in 2021.

Drug developers are predicting sales of around $2.2 billion for this year.

Pfizer generated about $100 billion in total revenue last year and has been flush with cash thanks to sales of its COVID-19 vaccines and treatments, Comirnaty and Paxlovid.

Bourla said earlier this year that the company plans to use “tremendous firepower” to buy products that will generate an additional $25 billion in revenue by 2030.

The deal was announced Monday and some of the previous acquisitions will help Pfizer's account for most of that. But Bourla emphasized Monday that the company expects Seagen's contribution beyond the end of the decade.

Pfizer Inc. New York-based has 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.

The drugmaker needs more sources of revenue partly as it faces expiring patents protecting drugs like the breast cancer treatment Ibrance from cheaper competition in the years to come.

Pfizer said Monday it will pay Seaagen most of it through $31 billion of new long-term debt.

The boards of the two companies have unanimously approved the deal. But regulators still need to see it, and Seagen shareholders need to approve it.

The company hopes to complete the transaction in late 2023 or early 2024.

Pfizer shares were up 2% to $40.26 after the market opened Monday, while Seaagen shares jumped more than 15% to nearly $200. The broader index rose slightly.

Image credit: AP/Mark Lennihan