Pfizer-Seagen: Next-gen medicine

Pfizer made an estimated $35 billion in profits on covid-related products in 2021 and 2022, and last March opened its pandemic-era war chest to fund the blockbuster acquisition of Seagen.   

Founded in 1997 as Seattle Genetics, Seagen is the leading producer of antibody-drug conjugates or ADCs, a class of biopharmaceutical drugs designed as a targeted therapy for treating cancer which, in contrast to chemotherapy, has the ability to eliminate tumor cells while sparing healthy cells.

In a statement coinciding with the announcement of the deal last March, Dr. Albert Bourla, Pfizer chair and CEO, remarked, “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.”

Although some financial analysts have raised eyebrows at the hefty price tag – it’s the largest pharma transaction since AbbVie paid $63 billion for Allergan in 2019 – there is no doubting the financial potential of the deal for Pfizer, given Seagen’s impressive revenue growth over the past decade, from $211 million in 2012 to $1.96 billion a decade later. Seagen expected to generate approximately $2.2 billion in revenue in 2023, and by 2028 annual turnover is forecasted to rise to over $7 billion.

Seagen’s annual turnover went from $211 million in 2012 to $1.96 billion in 2022

“Oncology continues to be the largest growth driver in global medicine, and this acquisition will enhance Pfizer’s position in this important space and contribute meaningfully to the achievement of Pfizer’s near- and long-term financial goals,” continued Dr. Bourla.

Smart drugs
And then there is the medical potential. Seagen is a pioneer in ADC technology. Its cancer treatments include four approved drugs, Adcetris, Padcev, Tivdak and Tukysa. In total, it accounts for a third of all FDA-approved ADCs available on the market.

Unlike “indiscriminate” cancer treatments, such as chemotherapy, the advantage of ADCs in oncology resides in their ability to selectively target cancerous cells, leaving healthy ones intact, the science behind which is improving all the time and has the potential to revolutionize the way cancer is treated.

The reason why Seagen was valued so highly is as much due to its future potential as its current status. The company has a large range of cancer treatments currently in development, including 38 at the clinical trial stage.   

The Washington State headquartered company was the subject of takeover speculation in 2022, with Merck the interested party, but discussions collapsed after the two sides were unable to agree on a price.

And in a move designed to head-off any potential objections to the takeover from the Federal Trade Commission on monopoly grounds, Pfizer gave the full rights to bladder-cancer drug Bavencio back to its original owner, Merck, since Seagen’s Padcev had been a direct competitor to Pfizer’s Bavencio. 

In October a significant hurdle was cleared when the European Commission gave the prospective tie-up its blessing, finding that “the merger would not significantly reduce competition [or] have a negative impact on prices,” for cancer treatments in the European Economic Area.