Pfizer (PFE) officially nabbed Seagen (SGEN) for $43 billion, the companies announced Monday, sending SGEN stock higher. Meanwhile, PRVB stock skyrocketed after Sanofi (SNY) said it would buy Provention Bio (PRVB) for $2.9 billion.
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The Pfizer-Seagen deal caps off a lengthy saga in which, initially, Merck (MRK) was rumored to be in discussions to buy the cancer specialist. Now, Pfizer will pay $229 per share of Seagen stock in a transaction expected to close late this year or early next.
RBC Capital Markets analyst Gregory Renza says the Pfizer takeover validates Seagen’s platform, research and development prowess and commercial engine. Seagen uses antibody drug conjugates, or ADCs, to fight tumors. ADCs are torpedo-like payloads of toxic chemicals directed toward cancer to limit damage to surrounding healthy tissue.
Pfizer expects Seagen to add at least $10 billion to its top line in 2030. That timing is crucial with Pfizer expected to lose several billion dollars in revenue as patents on key products begin to expire over the next decade. This year, Seagen calls for its sales to grow 12% to $2.2 billion.
In morning trading on the stock market today, SGEN stock soared 15.3% near 199. Pfizer stock rose 1.8% near 40.10. PRVB stock catapulted 247.2% near 23.30 as Sanofi stock inched up 0.7% near 47.60.
33% Premium On SGEN Stock
The price tag for Seagen also came in well above expectations, RBC’s Renza said. Initial rumors suggested Merck would pay $200 per share of SGEN stock. The deal values Seagen at a 33% premium over Friday’s closing price, he said in a report to clients. This reflects “the commercial and R&D potential,” he said.
Seagen sells four products. The biggest is Adcetris, a treatment for Hodgkin lymphoma. In 2022, Adcetris sales grew 19% to $839 million.
The addition of Seagen “will position us at the forefront of innovative cancer and strongly complements our existing portfolio across both solid tumors and hematologic malignancies,” Pfizer’s Chief Development Officer Chris Boshoff said in a written statement.
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