& Co. is in advanced talks to acquire
and is aiming to agree on a purchase of the cancer biotech in the next few weeks, according to people familiar with the matter, in a deal that could be worth roughly $40 billion or more.
The companies are discussing a price for Seagen above $200 a share and are seeking to seal a deal on or before the announcement of Merck’s quarterly earnings, set for July 28, the people said. Seagen’s stock closed at $175.13 on Wednesday.
There is still no guarantee the companies will reach agreement on a takeover deal.
New Jersey-based Merck has a market value of around $235 billion. Acquiring Seagen would help broaden its lineup of cancer drugs, currently led by the blockbuster immunotherapy Keytruda, the company’s top-selling product with $17.2 billion in sales last year.
It could also help offset the sales blow expected when Keytruda loses patent protection, which analysts expect at the end of this decade. Keytruda could approach 40% of Merck’s sales in 2027, Cowen & Co. analysts estimate.
Any proposed deal is expected to draw a close look from antitrust officials, with Cowen analysts recently predicting “a high likelihood” of litigation from the Justice Department or the Federal Trade Commission.
Shareholders of both companies have nevertheless reacted positively to the possibility of a tie-up, with both stocks up sharply since The Wall Street Journal first reported on the talks in June.
Seagen helped pioneer a class of cancer therapy that works like a guided missile, attacking tumors with toxins. By directing the strike, the therapies, called antibody drug conjugates, can maximize the treatment’s benefits while minimizing side effects by not going off target.
Among Seagen’s products is Adcetris, which had $1.4 billion in sales last year. Sales have been rising for Padcev, a drug for urothelial cancers of the bladder and certain other organs first approved in 2019. Seagen sells Padcev with
Astellas Pharma Inc.
The promise of antibody drug conjugates treating various cancers has drawn the interest of big pharmaceutical companies.
Gilead Sciences Inc.
paid $21 billion for Immunomedics and its antibody drug conjugate Trodelvy for breast cancer. Merck was among the companies interested in Immunomedics, the Journal has reported.
Also attractive to drugmakers is the perceived limited risk that rivals could develop and sell lower-cost generic versions of ADCs.
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Appeared in the July 7, 2022, print edition as ‘Merck Nears $40 Billion Deal For Cancer Biotech Seagen.’