Pfizer favors Merck in Seagen acquisition: SVB Analyst

Pfizer’s (PFE) interest in Seagen (SGEN) marks the second time in a year that cancer-focused biotechnology has been an acquisition target by a major cancer pharmaceutical player.

Seagen was in talks with Merck (MRK) mid-to-late last year, but talks reportedly fell apart over price disagreements.

The Wall Street Journal reported Sunday that Pfizer was interested in a potential deal worth $30 billion or more. This is different from Merck’s $40 billion, which was the company’s market capitalization at the time.

One potential conflict for the Pfizer deal is Merck’s partnership with Seagen on Padcev therapy in conjunction with Merck’s blockbuster Keytruda.

SVB Securities analyst Andrew Behrens said Pfizer may divest bladder cancer company Padcev to avoid antitrust scrutiny. That’s because Pfizer is also partnering with Seagen to share the rights to Bavencio, a therapy for bladder cancer. This, Behrens notes, could be a source of antitrust concerns.

Both Pfizer and Merck are facing patent cliffs — Pfizer with $17 billion in losses due to patent expiration by 2030, including cancer. Meanwhile, Merck’s biggest hurdle is retaining the $20 billion blockbuster Keytruda patent. Merck is pursuing this goal by changing the formulation and delivery method.

Pfizer logo at the Pfizer office in Puurs, Belgium, December 2, 2022. REUTERS/Johanna Geron

Pfizer logo at the Pfizer office in Puurs, Belgium, December 2, 2022. REUTERS/Johanna Geron

In June 2022, when the Seagen-Merck deal was first discussed, investor opinion was divided. SVB analysts wrote at the time that the anti-cancer portfolio made sense, but Seagen’s assets would not help solve Merck’s Keytruda problem.

Instead, SVB sees the Seagen deal as a good option for Pfizer, as the biotech company could generate nearly $11 billion in revenue by 2030 based on its current pipeline.

“We believe the potential deal is less complex than the Merck deal and is unlikely to be adversely affected by the same uncertainties,” the analysts wrote.

If it does, the acquisition will be Pfizer’s fourth and largest of the year as the company continues to leverage revenue from its COVID-19 vaccine and treatment. Pfizer’s cash pile of more than $20 billion has been boosted by sales to governments and organizations around the world during the pandemic.

In 2022, Pfizer acquired ReViral in June for $525 million and in October completed its $11.6 billion acquisition of Biohaven Pharma and $5.4 billion of Global Blood Therapeutics.

Subscribe to Anjalee at Twitter @AnjKhem

Click here to view the latest Yahoo Finance platform stock quotes.

Click here for the latest stock market news and in-depth analysis, including stock events.

Read the latest financial and business news from Yahoo Finance

Download the Yahoo Finance app for Apple or android

Follow Yahoo Finance at Twitter, facebook, Instagram, flipboard, LinkedInAnd YouTube

Content Source

News Press Ohio – Latest News:
Columbus Local News || Cleveland Local News || Ohio State News || National News || Money and Economy News || Entertainment News || Tech News || Environment News

Related Articles

Back to top button