Pfizer snaps up Seagen in $43B deal, sees $10B revenue contribution in 2030

By Vlad Schepkov

Pfizer (NYSE:PFE) today announced it has entered a definitive merger agreement to acquire Seagen (NASDAQ:SGEN), a cancer medicines maker, as the company aims to mitigate the declining sales of its COVID-19 vaccines.

The $43B, or $229 per share deal is set to become Pfizer's biggest acquisition since 2009 when the pharmaceutical giant paid $67 billion for Wyeth.

Seagen guided revenues of $2.2B for 2023, a 12% growth YoY, across its line of four ADC cancer products, royalties, and collaboration and license agreements. Pfizer sees the company contributing as much as $10B in risk-adjusted revenues in 2030, with potential for significant growth post 2030.

"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," said Seagen CEO David Epstein.

Pfizer will use $31B of new long-term debt, and the balance from a combination of short-term financing and existing cash, and sees deal to be neutral to slightly accretive to adjusted diluted earnings per share post-closing. It also sees nearly $1B in cost efficiencies in the third full year after the completion of the transaction.

The companies expect to complete the transaction in late 2023 or early 2024, subject to customary closing conditions.

Shares of Pfizer are trading around $38.30 post the announcement, down over 2.7%.