USA – A report in The Wall Street Journal has said Merck & Co. is considering a buyout of Seagen, a pioneer in the use of antibody-drug conjugates (ADCs) to treat cancer.
One potential hurdle is the possibility of increased antitrust enforcement from the Department of Justice (DOJ) and Federal Trade Commission (FTC) focused on the pharmaceutical sector.
To sidestep such risks, the two companies could enter a joint marketing arrangement instead, according to the Wall Street Journal article, which cited anonymous sources. The two companies have already had strategic collaborations in oncology.
The company, previously known as Seattle Genetics, already has an existing partnership with Merck. In 2020, Merck agreed to pay US$600 million upfront for rights to the experimental ADC ladiratuzumab vedotin.
Seagen is eligible for additional milestone payouts of up to US$2.6 billion as part of that deal, and Merck also made a US$1-billion equity investment in the company.
In addition, Merck paid US$125 million upfront in a separate deal for an exclusive license to market Tukysa to treat HER2-positive cancers in Asia, the Middle East, Latin America and other regions outside of the US, Canada and Europe.
The drug is in Phase II testing together with Keytruda for front-line patients with metastatic breast and gastrointestinal cancers.
Keytruda is also in a Phase I/II trial for urothelial carcinoma in combination with Padcev, a drug Seagen co-develops with Astellas.
Seagen generated a total of US$1.4 billion in sales last year, with its CD30-directed ADC lymphoma treatment Adcetris (brentuximab vedotin) accounting for about US$706 million of that.
Heightened regulatory scrutiny
Global antitrust watchdogs, including the US Federal Trade Commission, have signaled they would take an “aggressive approach” to prevent “anticompetitive” mergers in the pharmaceutical sector.
Some of the sources mentioned in the WSJ report indicated that Merck and Seagen could end up striking a marketing agreement instead, the report added.
However, if there is a deal ultimately reached, the WSJ report said it would likely be “significant” given Seagen’s roughly US$27-billion market capitalization.
Meanwhile, some of the people hinted that other unnamed suitors are also looking to Seagen as a potential acquisition target.
Seagen generated a total of US$1.4 billion in sales last year, with its CD30-directed ADC lymphoma treatment Adcetris (brentuximab vedotin) accounting for about US$706 million of that.
Other products in its portfolio include Padcev (enfortumab vedotin), Tukysa (tucatinib) and Tivdak (tisotumab vedotin).
Meanwhile, Seagen’s CEO Clay Siegall resigned in May following domestic abuse allegations, which he has denied, and chief medical officer Roger Dansey has been acting as interim CEO as the company seeks a replacement.
Merck’s reported interest in Seagen follows its US$11.5-billion deal last year to buy Acceleron Pharma, as well as the spinoff of its women’s health, biosimilars and established brands divisions into a new standalone company called Organon.
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