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Cancer drug maker Seagen (NASDAQ: SGEN) had reportedly attracted the interest of two pharmaceutical giants in less than a year, signaling a bidding war not seen since Horizon Therapeutics (HZNP) sparked a takeover fight that Amgen (AMGN)) won at the end of 2022.
Pfizer (PFE) is the latest to sniff a deal to acquire the biotech, formerly known as Seattle Genetics, The Wall Street Journal reported last week, citing people familiar with the matter.
The news came weeks after M&A talks tied to Seagen (SGEN) died down last year when the company added a new chief executive amid reports that price disputes ended with Merck’s (MRK) bid. ) to acquire it for up to $40 billion.
Similarly, Horizon Therapeutics (HZNP) was at the top of M&A news in 2022 as several drugmakers were eyeing the rare disease-focused drug developer before Amgen (AMGN) struck a deal. of ~$28 billion to acquire it in the first half of 2023.
With annual revenues of nearly $2 billion and an expanding portfolio of antibody-drug conjugates (ADCs), Seagen (SGEN) has the makings of a prime takeover candidate, especially for companies like Pfizer (PFE) and Merck ( MRK) looking to offset their upcoming patent cliffs.
Of the four approved cancer therapies in Seagen’s (SGEN) pipeline, two, Padcev and Tukysa, are among the top ten cancer drugs with blockbuster potential based on projected annual growth, Assess Pharmaceutical reported last week, citing the sell-side consensus.
The company, with partners Merck (MRK) and Astellas (OTCPK:ALPMF) (OTCPK:ALPMY), is awaiting label expansion for Padcev with Keytruda as a first-line option for certain patients with metastatic urothelial cancer. In late 2022, the FDA accepted its marketing application granting priority review with a target action date of April 21.
Despite buying interest, Seagen (SGEN) finished 2022 down 17%, trailing other cancer drugmakers like Genmab (GMAB) and Incyte Corporation (INCY) who added ~7% and ~9 %, respectively.
However, Wall Street has remained bullish on Seagen (SGEN) through 2022, even as analyst ratings on Genmab (GMAB) and Incyte (INCY) have slipped.
Meanwhile, Seeking Alpha contributors had mixed opinions on Seagen (SGEN). Author William Meyers issued a hold rating for the shares in January citing valuation concerns. In contrast, Dan Victor issued a buy rating in December, arguing that the stock “hasn’t been this ‘cheap’ at any time in the last decade.”