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    Home»Bio Technology»Pfizer is buying cancer biotech in one of the biggest pharma deals in history
    Bio Technology

    Pfizer is buying cancer biotech in one of the biggest pharma deals in history

    yourbiotechBy yourbiotechMarch 16, 2023Updated:March 16, 2023No Comments2 Mins Read
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    Pharmaceutical giant Pfizer is buying Seagen, a biotech company making a novel type of cancer treatment. Pfizer has agreed to pay $43 billion in cash, or $229 per share, making the transaction one of the largest pharma deals in history.

    The price includes debt, as the biotech company was not turning a profit. In 2022, the total losses for Seagen were $610 million, despite revenue of $2 billion.

    Pfizer, however, expects Seagen’s products to make significant revenue soon. Seagate makes antibody-drug conjugates, or ADC, a targeted cancer treatment that attacks cancer cells with toxins. This year, Seagen’s revenue is expected to grow to about $2.2 billion—a growth of 12% since last year—and Pfizer plans to make $10 billion from ADCs by 2030.

    “We are not buying the golden eggs. We are acquiring the goose that is laying the golden eggs,” said Pfizer CEO in a call with investors today (Mar. 13).

    Pfizer has a lot of covid money to spend
    The merger is the largest pharma deal since before the pandemic when Bristol-Myers Squibb acquired Celgene for $74 billion. Merck tried to acquire Seagen last year, but the two companies could not reach an agreement on the price.

    The acquisition is part of a long-term strategy for Pfizer, which is expecting to lose market from some of its best-performing drugs that are scheduled to see their patents expire in the coming years.

    But the company has resources to invest, fresh off the windfall of covid-19 vaccines, the drugs with the biggest annual sales in history. The drugmaker made more than $70 billion in revenue from covid-19 vaccines in 2021 and 2022 and had overall revenue above $100 billion in 2022. Revenue from the vaccine is expected to drop sharply, though Pfizer is trying to maximize profit by increasing the price to $130 in the US—a markup of 10,000%.

    ADCs are expected to become an important part of cancer treatments, making up nearly 10% of the global cancer drug market (an estimated $375 billion) in 2028. Pfizer currently has a revenue of $12 billion from its cancer products, including the renal cancer drug Inlyta ($1 billion in revenue).

    This is the third big oncology acquisition for Pfizer since the onset of covid. In 2021, it paid $6.7 billion to purchase biotech company Arena Pharmaceutical, and $2.3 for Trillium Therapeutics, an immunotherapy drug developer.

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