Pfizer favored over Merck for Seagen acquisition: SVB analyst

Pfizer’s (PFE) curiosity in Seagen (SGEN) marks the second time in a 12 months the most cancers-centered biotech has been an acquisition goal by a critical pharmaceutical participant inside the most cancers dwelling.

Seagen was in discussions mid to late final 12 months with Merck (MRK), nonetheless the talks fell aside over a disagreement on pricing, in line with stories.

The Wall road Journal reported Sunday Pfizer’s curiosity inside the likely $30 billion or extra deal. That differs from Merck’s $forty billion, which was the market capitalization of the agency on the time.

One potential battle for the Pfizer deal is Merck’s partnership with Seagen on a remedy, Padcev, collectively with Merck’s blockbuster Keytruda.

SVB Securities analyst Andrew Berens mentioned Pfizer may divest the bladder most cancers remedy Padcev, to maintain away from anti-notion scrutiny. that is as a outcome of Pfizer additionally has a partnership with Seagen, splitting the rights to Bavencio, a remedy to handle bladder most cancers. This, Berens notes, may probably be a supply of anti-notion factors.

each Pfizer and Merck are dealing with patent cliffs — Pfizer with a scarcity of $17 billion from patent expirations by 2030, collectively with some from the most cancers dwelling. Meanwhlie Merck’s largest impediment is retaining its $20 billion blockbuster Keytruda on patent. Merck is pursuing this by altering the formulation and supply methodology.

Pfizer company logo is seen at a Pfizer office in Puurs, Belgium, December 2, 2022. REUTERS/Johanna Geron

Pfizer agency emblem is seen at a Pfizer office in Puurs, Belgium, December 2, 2022. REUTERS/Johanna Geron

In June 2022, when the Seagen and Merck deal was first being talked about, buyers had blended opinions. whereas the most cancers portfolio made sense, Seagen’s belongings wouldn’t assist remedy Merck’s Keytruda draw again, SVB analysts wrote then.

as a substitute, SVB sees the Seagen deal as an excellent possibility for Pfizer, as a outcome of the biotech may see income of almost $eleven billion by 2030 base on its current pipeline.

“we predict a doable deal is much less superior than the Merck deal dialogue, and is unlikely to be adversely impacted by the identical uncertainties,” the analysts wrote.

If it goes by way of, the acquisition can be Pfizer’s fourth, and largest, in a 12 months, as a outcome of it continues to leverage it is COVID-19 vaccine and remedy income. Pfizer’s money pile of larger than $20 billion was boosted by gross sales to governments and entities globally in the course of the pandemic.

In 2022, Pfizer acquired ReViral in June for $525 million, and in October it accomplished its acquisitions of Biohaven Pharma for $eleven.6 billion and world Blood Therapeutics for $5.4 billion.

adjust to Anjalee on Twitter @AnjKhem

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