US pharmaceutical majors, Pfizer and Seagen, have recently announced that the companies have entered into a merger agreement under which Pfizer will acquire Seagen, engaged in developing cancer medicines, for $43 billion. The Boards of Directors of both companies have unanimously approved the transaction.

Announcing the merger agreement, Chairman and Chief Executive Officer of Pfizer Dr Albert Bourla said,  “Pfizer is deploying its financial resources to advance the battle against cancer, a leading cause of death worldwide with a significant impact on public health.

“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,” he added.

Pointing out that oncology continues to be the largest growth driver in global medicine, the Pfizer CEO said, “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.”

According to a statement, Seagen expects to generate approximately $2.2 billion of revenue in 2023, representing 12% year-over-year growth, from its four in-line medicines, royalties and collaboration and license agreements.

Explaining its rationale behind the acquisition, Pfizer said that when combining the expected strong growth trajectories for these medicines with candidates that could emerge from the pipeline of Seagen, subject to clinical trial and regulatory success, Pfizer believes Seagen could contribute over 10 billion US dollars in risk-adjusted revenues in 2030, with potential significant growth beyond 2030.

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Commenting on the merger agreement, Chief Executive Officer of Seagen, David Epstein, said, “Pfizer shares our steadfast commitment to patients, and this combination is a testament to the passion, dedication and talent of the Seagen team to achieve our mission to discover, develop, and commercialise transformative cancer medicines that make a meaningful difference in people’s lives.”

“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,” he added

Pfizer’s Oncology portfolio consists of 24 approved innovative cancer medicines that generated $12.1 billion in 2022 revenues, including the best-selling therapies for metastatic breast cancer and prostate cancer. Pfizer’s in-line portfolio is focused on four broad, key areas: breast cancer, genitourinary cancer, haematology and precision medicine, and has 33 programs in clinical development in its pipeline.

“Over the past decade, we have taken bold new approaches to translate scientific research into effective medicines for people living with cancer, and we have pioneered several breakthroughs in breast cancer, genitourinary cancer, haematological malignancies and precision medicine,” the Chief Development Officer of Oncology and Rare Disease at Pfizer, Chris Boshoff said.

“The addition of Seagen’s world-leading ADC technology will position us at the forefront of innovative cancer care and strongly complements our existing portfolio across both solid tumours and hematologic malignancies,” he added.

Pfizer said that it expects to finance the transaction substantially through 31 billion US dollars of new, long-term debt and the balance from a combination of short-term financing and existing cash. The companies expect to complete the transaction in late 2023 or early 2024, subject to the fulfilment of customary closing conditions, including approval by the shareholders of Seagen and receipt of required regulatory approvals.