Pfizer Buys Cancer Drugmaker Seagen for $43B – Largest Biopharma Deal in nearly Four Years

US pharmaceutical giant Pfizer has reached a deal to buy Seagen, a maker of innovative cancer treatments, for $43 billion as it looks for new sources of revenue due to declining sales of Covid-19 treatments.

Pfizer will pay $229 per share, a 33% premium on Seagen’s share price at close on Friday. Financing for the deal will be through $31 billion of new long-term debt and a combination of short-term financing and existing cash.

It is the largest acquisition in biopharma since June of 2019, when AbbVie acquired Allergan for $63 billion. Five months earlier, Bristol Myers Squibb pulled off the biggest transaction in industry history with its $74 billion purchase of Celgene.

Washington-based Seagen brings four commercial medicines and a deep pipeline full of antibody-drug conjugate (ADC) candidates. The company hit $2 billion in revenue last year, a 25% increase from 2021. Pfizer said it expects Seagen’s products to bring $10 billion in annual revenues by 2030.

Given its deep pockets of cash after scoring a record $100.3 billion in revenue in 2022, fueled by sales of its COVID-19 products Comirnaty and Paxlovid, Pfizer was primed to make a major deal.

Pfizer’s most recent purchase comes after much speculation last year about a potential buyout of Seagen by Merck, said to be in the $40-billion range. But the parties could not agree on a price, Bloomberg reported in August.

Seagen, which changed its name from Seattle Genetics in 2020, reduced its losses to $610 million last year, down from $674 million in 2021. Total revenue grew about 25% last year to nearly $2 billion.

The company named former Novartis executive David Epstein CEO in November. Long-time CEO and co-founder Clay Siegall resigned last spring.