Important patents are expiring at the US pharmaceutical company.
(Photo: Bloomberg)
Frankfurt Another major takeover may be in the offing in the pharmaceutical industry. According to a report by the Wall Street Journal (WSJ) on Monday, the US company Pfizer is in talks about acquiring the biotech company Seagen.
According to the WSJ, the negotiations are still at an early stage. If successful, however, they could lead to a deal with a volume well in excess of the $30 billion at which Seagen was last valued on the stock exchange. The shares of the US company, which focuses primarily on the development of cancer drugs, have already risen by around 16 percent in response to the pre-market report.
A takeover of this magnitude would be the second pharmaceutical deal in the tens of billions within a few months and thus another signal that mergers and acquisitions (M&A) activities in the pharmaceutical industry are intensifying again.
PwC experts expect deals of up to 409 billion dollars
Industry observers have been assuming this for a long time. In their latest M&A report on the pharmaceutical industry, experts from PwC, for example, estimate that the deal volume will return to the previous level of 225 to 275 billion dollars in 2023 after last year’s decline.
According to PwC, medium-sized transactions should be in the foreground. But there could also be several deals in the range of up to 40 billion dollars. In mid-December, the US company Amgen agreed to take over Ireland’s Horizon Pharmaceuticals for $29 billion.
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Seagen has long been considered one of the main takeover candidates in the US biotech industry. The American pharmaceutical giant Merck & Co. was also interested in the company last year, but was apparently unable to reach an agreement in the price negotiations at the time.
Pfizer, Merck and a number of other pharmaceutical companies are facing relatively large patent expirations in the coming years and are therefore under pressure to supplement their product ranges with new innovative drugs. At the same time, after various spin-offs or sales in recent years and thanks to high income from the Corona business, they have very solid financial strength.
Pfizer, for example, has generated combined sales of more than $90 billion in the past two years with the Covid vaccine Comirnaty, which it developed jointly with Biontech, and the drug Paxlovid, thereby consolidating its position as the world’s leading pharmaceutical manufacturer.
However, Covider revenues will fall sharply in the coming years, and several important patents will expire. Pfizer has therefore set itself the goal of creating additional sales potential of 25 billion dollars through acquisitions by 2030.
According to its own estimates, the group has already secured around 10.5 billion dollars through the acquisition of the biotech companies Arena, Biohaven, Global Blood Therapeutics and Reviral in the past two years.
Seagen acquisition would strengthen Pfizer in cancer drugs
Seagen would take him a step further and, above all, strengthen the position in the field of cancer medicine. Founded in 1998, the Seattle-based biotech company has a workforce of around 3,000 and is considered a pioneer in the field of antibody-drug conjugates, a new class of cancer drugs that is currently causing a sensation in the market. Antibodies are coupled with a cytotoxin, which is then transported to the tumor cells in a targeted manner.
A good dozen such antibody conjugates have been approved so far, and another 100 are in clinical trials. German biotech companies such as Heidelberg Pharma and the Munich start-up Tubulis are also working in the field. The cancer drug Enhertu, developed by Daiichi Sankyo and Astra-Zeneca, is currently regarded as a particular success for the class of active ingredients, which showed very good effects in certain forms of breast cancer.
Seagen itself has so far brought four such active ingredients through approval and achieved sales of almost two billion dollars with these products and license income in 2022. A good 40 percent of this went to the main product Adcetris, a drug against various forms of lymph node cancer.
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