- Washington-based Seagen Inc. (NASDAQ: SGEN) stock rose 16.76% on Friday.
- Merck & Company, Inc. (MRK) is considering buying the biotech firm.
- However, their talks are not yet conclusive.
Washington-based Seagen Inc. (NASDAQ: SGEN) stock rose 16.76% to US$171.385 at 12:14 pm ET on Friday after WSJ reported that Merck & Company, Inc. (MRK) is considering buying the cancer-focused biotechnology firm.
According to the report, a possible deal could be still far away, although talks are going on; and they may also settle for a marketing collaboration. Seagen currently has a market capitalization of US$31.50 billion, while Merck’s market value is around US$212 billion.
After the news, the MRK stock plunged 1.50% to US$83.62 at 12:32 pm ET. If the deal gets finalized, Merck will boast an impressive lineup of cancer drugs.
Both the companies have already been collaborating on breast-cancer treatment. They plan to test Merck’s top-selling product Keytruda in combination with another drug in an experiment.
Merck has reportedly offered Seagen US$600 million up-front out of its total five million shares worth US$1 billion for the takeover.
The healthcare sector saw fewer deals this year amid a topsy-turvy market condition. The industry typically sees a lot of deal-making each year. The fewer deals in 2022 compared to last year were due to the high valuations and increased risks of antitrust scrutiny.
Seagen, formerly Seattle Genetics, develops therapies to treat cancers. Its treatments use the monoclonal antibodies’ targeting ability to produce cancer cell-killing agents.
Seagen’s lead product Adcetris has received six “indications approval” for treating Hodgkin lymphoma and T-cell lymphoma. It also licenses its antibody-drug conjugate technology to other leading pharmaceutical companies.
Seagen brought its IPO in 2001. In the quarter ended March 31, 2022, it generated a revenue of US$426.4 million compared to US$331.98 million in the same quarter a year ago. The net loss was US$136.5 million versus a net loss of US$121.4 million in the previous year.
Seagen had US$261 million in cash and cash equivalents as of March 31, 2022.
Its stock traded in the range of US$192.79 to US$105.43 in the last 52 weeks.
According to analysts, Merck needs more pipeline products to bolster its portfolio. Merck CEO Robert Davis, they say, is looking for more do more deals. The S&P 500’s biotechnology Index fell around 7% YTD; RGEN stock dropped 5.7% YTD at the closing price of June 16.