Pfizer is buying Seattle-area biotech giant Seagen in a massive $43 billion deal announced Monday.
The deal is the largest biopharma transaction in three years, and comes after reports emerged about a potential acquisition late last month.
Seagen is the largest biotech company in the Seattle area and an anchor for the biopharma industry in the Pacific Northwest. The 3,300-person company announced plans last year to build a 270,000 square foot manufacturing facility north of Seattle.
Seagen was previously known as Seattle Genetics when it launched back in 1998. It went public in 2001, pricing its IPO at $7 per share.
The new deal values the company at approximately $229 per share, a 33% premium over its closing price Friday.
In an investor call, Bourla said Pfizer will maintain the Seattle area and San Francisco Seagen locations, and “will try if possible to enhance their resources rather than taking them away.”
“We are not buying the golden eggs. We are acquiring a goose that is laying the golden eggs,” said Bourla. Seagen has several offices globally and employs about 1,800 in the Seattle area.
The deal is expected to close in late 2023 or early 2024.
Merck last year was reportedly in talks to acquire Seagen, but that deal never materialized.
Pfizer’s oncology arm has 24 approved cancer medicines that generated $12.1 billion in revenues in 2022. The proposed combination with Seagen would double Pfizer’s early-stage oncology clinical pipeline.
Pfizer says Seagen could contribute more than $10 billion in risk-adjusted revenues in 2030, with potential significant growth beyond 2030.
“Together, Pfizer and Seagen seek to accelerate the next generation of cancer breakthroughs and bring new solutions to patients by combining the power of Seagen’s antibody-drug conjugate (ADC) technology with the scale and strength of Pfizer’s capabilities and expertise,” said Bourla in a statement.
Bothell, Wash.-based Seagen pioneered the development of antibody-drug conjugates, a class of drugs that zeros in on cells using an antibody and delivers a toxin or other small molecule to them. The company has four oncology drugs on the market and is testing them in clinical programs for potential new tumor types or earlier lines of therapy. It also has a pipeline of other candidates that includes 11 potentially novel drugs.
Seagen pulled in $2 billion in revenue in 2022, with a net increase of product sales of 23% to $1.7 billion. The company expects approximately $2.2 billion in revenue in 2023.
“The proposed combination with Pfizer is the right next step for Seagen to further its strategy, and this compelling transaction will deliver significant and immediate value to our stockholders and provide new opportunities for our colleagues as part of a larger science-driven, patient-centric, global company,” said Seagen CEO David Epstein in the statement.
The deal is one of the biggest acquisitions in the Seattle area and the largest biopharma transaction in the region since Celgene bought Juno Therapeutics in 2018 for more than $9 billion. It is also the largest global biopharma transaction since 2019, when Bristol Myers Squibb bought Celgene for $74 billion and Abbvie announced it was purchasing Allergan for $63 billion.
Bourla has previously said his eye is on deal-making to grow Pfizer, which pulled in $100 billion in revenue last year from its COVID-19 vaccine and other products, and is expecting revenue to drop to between $67 and $71 billion in 2023.
Last year Pfizer acquired sickle-cell drug company Global Blood Therapeutics for more than $5 billion and completed a deal to acquire migraine drug maker Biohaven Pharmaceuticals.
Seagen launched its first clinical trial for its lymphoma drug Adcetris in 2006 and received accelerated approval for it in the U.S. in 2011. Adcetris now available in more than 60 countries.
The company bought Cascadian Therapeutics in 2018 for $614 million, acquiring a drug candidate that would later be approved as the breast cancer drug Tukysa. In 2020 the company changed its name to Seagen to reflect its growing global presence, with a European headquarters in Zug, Switzerland.
Seagens’ urothelial cancer drug Padcev was approved by the U.S. Food and Drug Administration in 2019, Tukysa in 2020, and the cervical cancer drug Tivdak in 2021.
Seagen was founded by Clay Siegall and H. Perry Fell, who served as CEO until Siegall took over four years later in 2002. Siegall resigned from the company in May following domestic violence allegations and an arrest at his house after an incident involving his wife. He ultimately did not face charges.
Epstein, a former Novartis executive, was appointed CEO in November.