Pfizer spent $43 billion Monday to acquire Washington-based biotech company Seagen.
This is the biggest transaction related to the biopharmaceutical industry in three years, according to Geek Wire.
Pfizer CEO Albert Bourla said Seagen’s operations would continue to be based in the Seattle area.
“We are not buying the golden eggs,” Bourla said in a call to investors via Geek Wire. “We are acquiring a goose, but he’s laying the golden eggs for us.”
Seagen, formerly known as Seattle Genetics, started out in 1988 and played a huge part in the development of antibody-drug conjugates, which deliver toxins to cells using antibodies.
The move meshes well with Pfizer, which also has marketed antibody-drug conjugates.
Some layoffs are expected as Seagen is absorbed into Pfizer. There are more than 1,800 employees in the Seattle area alone and 3,200 in total across the United States and Europe.
Experts in the biotech industry expect the Seattle-area talent to be a huge benefit to the company.
There will be some regulatory questions as the two companies merge, though David Miller, a consultant for Seattle biotech companies, doesn’t think anything will ultimately come of it.
“There is no reason why the merger shouldn’t go through from a competitive standpoint,” David Miller told GeekWire, explaining that Pfizer is not supposed to receive any new pricing power from the merger.
An analysis from Quartz opined that the Seagen acquisition is part of a Pfizer long-term strategy that hopes to account for several expiring patents.
Pfizer was part of developing and distributing the COVID-19 vaccines, which brought the company more than $70 billion in 2021 and 2022. But this revenue stream from the pandemic is not expected to continue, which is one of the reasons analysts say the company will increase the price, Quartz reported.
In 2021, Pfizer acquired Arena Pharmaceutical for $6.7 billion, according to Quartz, which is another biotech company. It also acquired Trillium Therapeutics, an immunotherapy drug developer, for $2.3 billion.