Just posting to bring attention to one of the many ways of...

Just posting to bring attention to one of the many ways of mergers and acquisitions.

I am not suggesting this will or might happen here, but curious and I found the highlighted quote interesting.

Updated: Pfizer to buy Seagen for $43B, ending long-running M&A saga for biotech.

“We are not buying the golden eggs,” Bourla said. “We are buying the goose that is laying the golden eggs.”

https://endpts.com/pfizer-buys-seagen-for-43b-ending-long-running-ma-saga-for-biotech/

Pfizer will buy cancer drugmaker Seagen for $43 billion in one of the industry’s biggest deals in years.

The deal, for $229 a share, ends a long-running drama. Pfizer appears to have won by being willing to pay up: In July, Merck was reported to be in talks for a deal at or over $40 billion that fell apart over price. In February, Pfizer was reportedly in talks with Seagen for more than $30 billion.

Pfizer CEO Albert Bourla said the deal is a “major, major move” in an analyst call Monday morning. It’s the largest biopharma M&A since Bristol Myers Squibb’s $74 billion Celgene buyout and AbbVie’s $63 billion play for Allergan, both in 2019. It eclipses the $28 billion December price tag for Amgen’s Horizon Therapeutics merger.

Seagen CEO David Epstein called the companies a “really strong strategic fit, beyond the financials” in an analyst call, responding to a question about valuation, citing “synergies” on go-to market between Pfizer and Seagen. Asked about Merck at multiple points in the call, Epstein repeatedly said the Pfizer deal was done at the “right time” and Bourla declined to comment whether Pfizer was at the table during Merck’s reported talks last summer.

“We are not buying the golden eggs,” Bourla said. “We are buying the goose that is laying the golden eggs.” The Pfizer leader called Seagen’s employees — 3,256 at the end of 2022 — its “greatest asset.”

Seagen’s appeal to large drugmakers has been its antibody-drug conjugates, which use antibodies linked to powerful cancer-killing molecules to better target tumors without as many side effects. Seagen fills a hole for Pfizer, as the New York drugmaker’s ADC platform went into the hands of Pyxis Oncology in 2021. In the press release announcing the deal, Pfizer said that four of the 12 ADCs currently on the market use Seagen’s technology, including three of its own — Adcetris, Padcev and Tivdak — and Roche’s Polivy. Seagen also markets breast cancer drug Tukysa.

Shares of Seagen $SGEN soared 15% to $198 at the open in New York. That’s about $30 below Pfizer’s price, suggesting there are still some doubts about a deal closing. Pfizer would have to pay Seagen more than $2.2 billion if the deal fails on antitrust grounds. Seagen, meanwhile, would have to pay about $1.7 billion if it walks away for a better bid.

Since reaping tens of billions of dollars in revenue from its Covid product, the industry and Wall Street have been closely watching how Pfizer would deploy that giant war chest to fund the next phase of its business. The company in 2020 completed the divestiture of its older drugs business, part of a bet to focus on newer research and development.

The buy extends Pfizer’s dealmaking activity in 2022, which saw an $11.6 billion consummation of migraine drugmaker Biohaven and $5.4 billion acquisition of sickle cell therapy maker Global Blood Therapeutics.

“If we are going to do more deals, we have the capability,” Bourla said. The CEO said Pfizer wants deals with “very good value.”

TD Cowen analysts said they “don’t anticipate any competing bids” considering the size of the deal. In a note shortly after the M&A announcement, the analysts, Boris Peaker and Nicholas Lorusso, also said they “anticipate the deal will close.”

Pfizer’s oncology portfolio had 2022 sales of $12.1 billion, the New York drugmaker said. Seagen expects to bring in $2.2 billion in sales this year. The deal is expected to close later this year or early next, the companies said, and will generate about $1 billion in cost savings after three years.