Pfizer has begun talks to acquire biotech company Seagen in a deal that could be valued at over $40 billion.
The pharmaceutical giant is in early-stage talks with Seagen, a public company that produces targeted cancer therapies, according to The Wall Street Journal.
While there are many challenges facing the deal, including antitrust issues, Seagen is currently valued at over $33 billion, and The Wall Street Journal reported that Seagen would likely command a premium over its current valuation.
Analysts at Berenberg also said the deal could surpass $40 billion. They noted that the deal could make “strategic sense for both parties and the antitrust hurdle appears surmountable,” according to Fierce Pharma.
Merck & Co. previously held talks to acquire Seagen in a deal worth $40 billion, but the talks fell flat, Fierce Pharma reported.
Seagen develops and sells targeted monoclonal antibody-based immunotherapy cancer drugs that have been shown to be effective in treating several of the most common tumors when surgery is no longer an option, according to the Cleveland Clinic.
The company reported $2 billion in sales in 2022, up from $1.6 billion in 2021, according to its 10-K filing. Seagen’s stock jumped over 10% on Monday amid talk of the reported deal, dropping back down by 0.35% on Tuesday.
The deal could help Pfizer compensate for the $17 billion in sales it expects to lose from patent expirations by 2030. Targeted immunotherapies are some of the most expensive drugs on the market, with some treatments costing over $100,000 per patient, according to Vox.
Pfizer, which is sitting on nearly $23 billion in cash after sales of its COVID-19 vaccines, has been looking to make acquisitions to bolster its portfolio, according to Market Watch.
In October 2022, Pfizer bought sickle-cell drug manufacturer Global Blood Therapeutics Inc. for $5 billion and Biohaven Pharmaceutical Holding Company Ltd. for more than $10 billion.
Seagens’ immunotherapies have been approved to treat Hodgkin’s and other lymphomas, as well as other tumors, including a form of breast cancer, The Wall Street Journal reported.
