Pfizer is set to acquire Seagen for $43 billion and create a new oncology division

In a significant move, Pfizer has announced its anticipation of concluding the $43 billion deal to acquire cancer drug maker Seagen by 16 December 2023. The pharmaceutical giant revealed plans to establish a dedicated oncology division, incorporating the newly acquired assets, in early 2024.

The company shared that Chief Commercial Officer Angela Hwang is set to step down. Simultaneously, Pfizer will bifurcate its commercial business, excluding oncology, into two distinct divisions. One division will focus on the United States, while the other will oversee operations in the rest of the world.

Pfizer, responding to challenges, recently adjusted its full-year revenue forecast by 13%, coupled with a $3.5 billion cost-cutting initiative attributed to lower-than-expected sales of its COVID-19 vaccine and treatment.

Chris Bodhoff, currently overseeing cancer research and development, will spearhead the newly established oncology division, reporting directly to CEO Albert Bourla. The U.S. commercial unit will be led by Chief Business Innovation Officer Aamir Malik, while Alexander de Germay will assume the role of Commercial Chief of the international unit.

The anticipated closure of the Seagen deal, announced in March 2023, is slated for Thursday, 14 December 2023, following the expiration of the antitrust waiting period and securing all necessary regulatory approvals.

To address concerns raised by U.S. antitrust regulators, Pfizer has committed to donate the rights to royalties from the sales of the cancer drug Bavencio to the American Association for Cancer Research. In March 2023, Pfizer relinquished development and commercial rights for Bavencio to its partner, Merck KGaA, retaining a 15% royalty on net sales.

Bavencio contributed $271 million to Pfizer’s sales in 2022. The acquisition of Seagen was initially revealed in March 2023, as Pfizer strategized for the decline in sales of its COVID-related products.

The U.S. Federal Trade Commission (FTC) had sought additional information on the Seagen deal in July 2023, though it refrained from commenting on Pfizer’s recent announcement.

Market reactions were notable, with Seagen shares experiencing a 3.3% increase to $228.84, closely approaching the offer price of $229. Pfizer shares saw a marginal dip, falling by less than 1% to $28.53. Pfizer is scheduled to unveil its 2024 forecast and discuss the new corporate structure in a conference call on Wednesday, 13 December 2023.