Seagen (SGEN) Set to be Acquired by Pfizer for $43 B, Stock Up

Seagen SGEN announced that it has entered into a definitive agreement to be acquired by pharma bigwig Pfizer PFE for $229 per share, marking a 33% premium over Seagen’s Friday’s closing price in cash bringing the valuation of the company to $43 billion. The shares of Seagen were up about 14.5% on Monday, following the news.

Seagen has projected to generate approximately $2.2 billion of revenues in 2023, representing 12% year-over-year growth from its four in-line medicines, royalties and collaboration and license agreements. Taking into consideration the growth trajectory of Seagen’s marketed products along with its pipeline candidates, subject to the successful completion of studies and regulatory approval process, Pfizer believes that Seagen has the potential to contribute more than $10 billion in risk-adjusted revenues in 2030 and even higher beyond 2030.

In the past year, the shares of Seagen have increased 43.7% against the industry’s decline of 10.1%.

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Image Source: Zacks Investment Research

The acquisition, if followed through, will add Seagen’s portfolio of antibody-drug conjugates (ADCs) and technology to Pfizer’s already robust portfolio of oncology drugs. Seagen will gain access to Pfizer’s resources to continue the development of its ADC technology. Pfizer should be able to bring new innovative cancer treatment options to patients by combining Seagen’s prowess in ADCs with Pfizer’s existing portfolio across both solid tumors and hematologic malignancies, bolstering its position in the market and driving growth.

ADCs are proving to be increasingly powerful in the treatment of a broad range of cancers designed to preferentially kill cancer cells and limit off-target toxicities. Currently, Seagen’s portfolio consists of four drugs in its indications across solid tumors and hematologic malignancies, including three ADCs – Adcetris (brentuximab vedotin), Padcev (enfortumab vedotin) and Tivdak (tisotumab vedotin). The company also markets Tuksya (tucatinib). Studies on each of these medicines are currently ongoing to potentially treat new tumor types or expand its existing label in earlier lines of therapy.

The company also plans to submit several Investigational New Drug Applications (INDs) in the foreseeable future. These INDs are expected to include Seagen’s next-generation linker/payload technologies for ADCs and other innovative antibody platforms that directly engage the immune system to destroy tumors, such as bi-specific antibodies.

If the acquisition deal goes through, Pfizer’s resources and expertise will help Seagen develop eleven new molecular entities, many with the potential to treat large patient populations. Seagen, with the help of Pfizer’s protein engineering and medicinal chemistry capabilities, will also be able to slingshot its ADC technology to unlock potential novel target combinations and next-generation biologics.

The companies are expected to complete the acquisition transaction in late 2023 or by early 2024, subject to the fulfillment of certain terms and conditions concerning the closing.

Seagen Inc. Price and Consensus

Seagen Inc. Price and Consensus

Seagen Inc. price-consensus-chart | Seagen Inc. Quote

Zacks Rank and Other Stocks to Consider

Seagen currently has a Zacks Rank #3 (Hold).

A couple of better-ranked stocks in the same industry are Aptinyx APTX and Annovis Bio ANVS, both carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

In the past 90 days, the estimate for Aptinyx’s 2023 loss per share has narrowed from 76 cents to 59 cents. In the past year, the shares of Aptinyx have fallen 94.9%.

APTX’s earnings witnessed an average earnings surprise of 9.53%, beating all four estimates in the trailing four reported quarters.

In the past 90 days, the consensus estimate for Annovis’ 2023 loss per share has widened from $2.94 to $3.87. In the past year, the shares of Annovis have increased by 21.1%.

ANVS’ earnings beat estimates in the last reported quarter, delivering an earnings surprise of 20.51%.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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