Pfizer (NYSE: PFE) acquisition of Seagen (NASDAQ: SGEN), announced in March, is expected to complement the pharmaceutical giant’s current portfolio of oncology therapies.
Seagen focuses on antibody-drug conjugates (ADCs), a technology the company says can “harness the targeting power of antibodies for delivering small molecule drugs to the tumor.”
Biotechnology has three marketed ADCs: Adcetris (brentuximab vedotin), Padcev (enfortumab vedotin) and Tivdak (tisotumab vedotin). They are approved for various types of cancer.
In addition, it markets the non-ADC Tukysa (tucatinib), which is approved for breast and colorectal cancer.
On March 13, Pfizer ( PFE ) said it would buy Seagen for $43 billion. If the deal goes through, it would be the largest in the pharmaceutical sector since AbbVie ( ABBV ) paid $63 billion in 2019 for Allergan.
Despite the high price for Pfizer ( PFE ), the payoff is expected to be huge. In a recent report, data and analytics firm GlobalData said Pfizer’s ( PFE ) total cumulative revenue from Seagen’s ( SGEN ) products is projected to reach $36 billion by 2028.
The acquisition comes at a critical time for Pfizer ( PFE ) as it faces declining revenue from its COVID-19 vaccine and antiviral drug Paxlovid, two products that have significantly padded its top line in recent years.
In its Q4 and full-year 2022 earnings report in January, Pfizer ( PFE ) said Paxlovid generated ~$19 billion in sales for the year. However, he warned that in 2023, that figure will drop by 58% to $8 billion.
The good news for Pfizer ( PFE ) is that GlobalData sees the acquisition of Seagen ( SGEN ) as a good thing. “What’s most impressive … is Seagen’s ( SGEN ) ability to develop a broad range of monoclonal antibodies that target a variety of cancers,” said GlobalData oncology and hematology analyst Israel Stern. “This capacity will now be enhanced by leveraging Pfizer’s ( PFE ) protein engineering capabilities.”
Stern noted that all four of Seagen’s ( SGEN ) currently marketed therapies are expected to generate $1 billion in revenue over the next five years. Adcetris, the biotech’s best-selling drug, is approved for several types of lymphoma. GlobalData predicts it will become a billion-dollar drug in 2024.
Padcev, which was developed with Astellas Pharma ( OTCPK:ALPMF )( OTCPK:ALPMY ) urothelial carcinoma, is projected to overtake Adcetris as the best-selling drug by 2024, Stern added.
Padcev may see additional use as it is currently under priority review by the US FDA in combination with Keytruda (pembrolizumab) for urothelial cancer.
Seagen’s ( SGEN ) pipeline also shows promise. In addition to seeking additional indications for its marketed products, it has two ADCs in Phase 2, disitamab vedotin and ladiratuzumab vedotin. The first is under investigation for urothelial cancer expressing HER2, while the second is for triple-negative breast cancer and solid tumors.