The pharmaceutical giant said Monday that it will pay $229 in cash for each Seagen share.
Bothell, Washington-based Seagen Inc. is a biotech drug developer that specializes in antibody-drug conjugate, or ADC, technology. Its key products use lab-made proteins called monoclonal antibodies that seek out cancer cells to help deliver a cancer-killing drug while sparing surrounding healthy tissue.
The deal announced Monday will combine Seagen’s technology with Pfizer’s scale and strength, Pfizer CEO Albert Bourla said in a statement.
Pfizer’s oncology division brought in $12 billion in revenue last year and already includes treatments for prostate cancer and the breast cancer treatment Ibrance.
Seagen, which changed its name from Seattle Genetics in 2020, saw total revenue grow about 25% last year to nearly $2 billion. The company shaved its loss to $610 million last year. That’s down from $674 million in 2021.
Seagen’s top seller, Adcetris, treats lymph system cancers. It brought in $839 million in sales last year, a 19% 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% 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. That would represent 12% growth.
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.
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.
Pfizer said Monday it will pay for the deal mostly through $31 billion in new, long-term debt.
Both companies’ boards have unanimously approved the deal. But regulators still need to look at it, and Seagen shareholders will have to approve it.
The companies expect to complete the transaction in late 2023 or early 2024.
Shares of Pfizer slipped about 2% to $38.55 before markets opened Monday while Seagen’s stock jumped nearly 20% to $206.40.